Partnering to Create an Ethical Business Culture Across the Globe

Partnering to Create an Ethical Business Culture Across the Globe

Published: Nov 29, 2013

As stated by the Business Ethics Alliance, “Ethics is the foundation of behavior.  Ethical behavior is morals and values in action.  Good actions are the result of good ethics.  Likewise, good business ethics produce successful businesses.”

While it may be relatively easy to create a company code of conduct that sets the guidelines within a single country, how do you address the many variances that occur with multi-national companies doing business across the globe? 

This was the framework for the panel discussion at the NEI Global Partner Alliance among three executives whose companies do business around the globe.  Moderating the discussion was Bev Kracher, Ph.D., CEO/Executive Director of the Business Ethics Alliance.

Panelists included Chris Kircher, Vice President of Corporate Affairs and President of ConAgra Foods Foundation; Charles Dalluge, Executive Vice President of Leo A Daly Company; and Kate Dodge, President of NEI Global Relocation.

Introducing the Topic

Kate Dodge, President of NEI, took a few minutes to introduce the session.

“Why did we decide to devote an hour to ethics and integrity among business partners?” she asked.  “Because we believe it is so important for you, our partners, to know more about NEI’s commitment to our core values.  We work together in a global economy where the value of integrity and how we approach cultures with different values and practices rises to the top.  It is a topic that we believe we have to be on the same page as our partners - worldwide.

The ethical culture of a company comes from the top but research shows that good ethics are only sustained when the leaders reinforce it and managers live it.  So how do we promote an ethical culture where we can be confident that all parties will do the right thing?”

Every Culture Has Its Unique Set of Ethical Values

Each culture has its own set of values, customs and traditions that have evolved into a unique set of ethical values and principles.

Charles Dalluge, Executive Vice President of Leo A Daly Company—a multinational architectural and engineering firm, provided an example of how to work through ethical decisions.

He described the Foreign Corrupt Practices Act of 1977 (FCPA) which holds all U.S. companies doing business abroad to the standards of the US government.  He stated that among other things, this law addresses bribery of foreign officials.  We have to ask…what is a bribe?  In some countries, payments to accelerate a process happen as a normal course of business.  So if it is a standard practice to pay more to process something quicker in that country, is it a bribe?

Many would define a bribe as giving something to someone that would entice them to do something they usually would not do.  The key is to know how things are interpreted in each culture; in America, contracts form the basis of a business relationship and we live by each and every word.  Internationally, relationships form the basis of an agreement.

No International Ethical Code of Conduct

You simply cannot generalize the world—everyone handles things differently.  There is no international ethical code of conduct that is followed by all countries, so it becomes impossible to create a global standard of rigid rules that outline conduct.

Chris Kircher, Vice President of Corporate Affairs and President of ConAgra Food Foundation added that it is not easy to develop a rigorous code of conduct with language around bribery and corruption.  How does one write language that captures the different markets and cultural differences?  If you are supporting a charity of a customer, could it be considered a bribe in that culture?

If you look at it through one lens, the policy will not be useful. Ethics is a collaborative process.  You have to embrace open dialogue, understand how things are done in each culture and talk through what would be the right approach for your company.

The audience participated in the discussion with one person commenting that some cultures can be extremely rigid with immediate consequences for doing something that in another culture would not be unusual or thought to be unethical.  She spoke of an incident in which a Chinese executive was fired because he was supplied with an iPad by a business partner.

Businesses need to understand each culture and its business practices as they decide which countries they will expand in as they go global and then decide how they will apply their ethical values and code of conduct in that environment – by listening and talking through alternatives.

Ethics in Action

Global companies have found they need to be creative in solving business ethical issues by looking at the desired end and striving to create win-win situations – both for them and their host county.

One company that was expected to give bribes in India to accomplish some business goals was able to gain the political and local support they needed by initiating a community service campaign to plant fruit trees.  They remained as a successful business in India without compromising their ethical principles.

Best Practices

It is hard to outline global ethical values, but those who are frequently faced with this challenge have the following suggestions:

  • Define your core values
  • Look through the end user’s eyes
  • First listen, then, have an open dialogue
  • Strive to understand the cultural aspect of how things are done
  • Respect the opinion of those closest to the situation
  • Take time to truly understand
  • Hire and trust people to live your principles
  • Have confidence in the ability of your leadership and organization to talk it through
  • Collaborate to achieve a workable consensus

In closing, Charles Dalluge shared that in our culture we frequently try to cut to the chase quickly when making business decisions and expect that to be true across the globe.  But he has learned that in other cultures the process is extended so that a relationship can be established.  He says, “Anything worth doing takes three cups of tea.”