Ethical Issues in International Business - Iloka Benneth Chiemelie, Ehumadu Chika

0.1 ETHICAL ISSUES IN INTERNATIONAL BUSINESS

Getz (1990) described international business code of conduct in four entities: (1) the Organisation for Economic Corporation and Development (OECD), which is primary focus of industrialized nations, (2) the International Chamber of Commerce (ICC), responsible for fair treatment among multinational corporations, (3) the International Labour Organisation (ILO), concerned with direct investment in developing countries, and finally (4) the Centre for Transactional Corporation (CTC), with the main objective of maximizing the contributions of transactional corporations towards economic development and growth.

These codes were developed with the primary focus of establishing order among multinational corporations; though some companies across the globe have refused to abide by this code, mainly due to lack of sanction from the federal government.  In a survey of 300 international corporations, 80 percent concurred with seven items that are ethical issues for business: (1) conflict of interest amongst employees, (2) inappropriate gifts for corporate personnel, (3) workplace bullying, (4) unauthorized payments, (5) affirmative action (6) employee privacy; and (7) environmental issues (Brooks, 1989; Berenheim, 1987, 1989; 117-129). Five of these issues will be analysed below in a more detailed approach.

1.0 WORKPLACE BULLYING

Workplace bullying can generally be referred to as repeated physical, sexual abuse, harassment, or hostilities in a workplace and consists of offensive and unwanted behaviours in an organisation (De Cuyper et al., 2009; MacIntosh, 2005; Saunders et al., 2007). Research shows that over 70 percent of bullying in workplaces occurs between superiors bullying their subordinates (WBI, 2007, 2009). In another international survey, Canadian women reported a high rate of workplace bullying (Leck, 2000), and bullying was associated with high level of stress (Bond et al., 2004).

Bullying involves abuse of power and authority (Lewis, 2006), and is highly influenced by societal power and gender (Salin, 2009). According to WBI (2009), women are slightly bullied more than men, probably because of imbalances in workplace power structures (Einarsen, 1999) and because women have less control over workplace activities than men. Gender differences in relationship to power may influences women to perceive certain behaviours as bullying and thus result in many health issues.

Workplace bullying have been studied using different measurements (Nelsen et al., 2009), but no matter the measurement bullying has been proven to have a long range of physical, emotional, economic, social and life threating consequences (Agervold and Mikkelsen, 2004). These are mainly the reasons behind workplace bullying being highlighted as an issue in international business; because many immigrant workers suffer different abuse in their workplaces. These abuses mainly come from their superiors and they tend to succumb because of fear of losing their jobs.

From the above arguments, it can be seen that workforce bullying can have detrimental effects both physically and psychologically on employees if these issues are not properly handled. To limit the issues of workforce bullying, companies can develop strict rules to punish offenders, as well as creating open environment that allows free well and communication in the workplace. Another measure can be limiting the gap between superiors and their sub-ordinates, so that all staffs in the organisation appear equal before the company. This was employees will be judged by their achievements rather than status occupied. This will keep employees motivated and more comfortable in the workplace knowing that they are all equal irrespective of their position in the organisation.

2.0 EMPLOYEE PRIVACY

Widespread use of computers as a communication and work medium has resulted in organisations regulating the use of electronic mail (E-mail) and other computer resources as a means of protecting company assets. A study by human resource professionals (Society for Human Resource Management (SHRM), 1997), found that with respect to e-mail use by employees, 86 percent of companies provide their employees access to e-mail.

E-mail regulations are of primary concern to organisations because of the east and flexibility an e-mail can be used to exchange information between individuals inside and outside the organisational territories. The main reasons why employers regulate employees e-mail can be to prevent crime, protect private company information, guide against legal liabilities those results from cases such as discrimination, harassment and negligence, maintain information security and minimize lapse in productivity time.

The way employees perceive privacy and fairness lay a role in their broad individual attitudes and behaviour in an organisation (Greenberg, 1994; Stone-Romero, 2005; Stone et al., 2006). This is because; employees tend to visualize access to their privacy and unfair activities in the organisation as unethical. Thus, this can influence their attitude in the organisation, either by hiding certain information that could help the organisation because they don't want to access their email in the company's computer, and limiting their commitment towards organisational productivity as they tend to be working under their wish with supervision.

On an international bases, business abroad have many reasons to limit employees access to vital organisational information, and ensure that they don't duplicate any of the information they have access to. This is because organisational practices can easily be copied from one country and adapted in another county, and this could limit the company's competitive advantage if they happen to expand in the adapted country.

Nevertheless, there is no argument that will justify access to employee's privacy as the employees have to protect their personal privacy just like the organisations too. In regards to this issue, email policies in most international companies are developed to help protect employee's privacy by disclosing the company's regulatory practices, and eliminating unwarranted expectations of confidentiality of e-mail sent using company systems (Stone and Stone-Romero, 1998).  This is a good measure to combat issues related with employee's privacy, as employees in the organisation have access to see what the company knows about their privacy. Another aspect, will be to regulate the IT department; to ensure that they are not un-ethical in their day to day activities in relationship to employees privacy, and access to their confidential information such as salary, relationship, family etc.

3.0 CONFLICT OF INTERESTS AMONGST EMPLOYEES

Conflict has been described by Wall and Callister (1995), as the process in which a party believes that his interest is being opposed or negatively affected by another party. Another definition offered byRahim (1992) defined conflict as a process manifested in compatibility, disparity, or dissonance within or between two different social entities. From the following definitions, it can be argued that conflicts occurs when people think that they decisions or ideas are not accepted or are being opposed by other people, firm or group in the society (Shi and Susanto, 2010).

On a global base, there is no doubt that this is a serious business issues. As companies globally seek new innovative ways to stay ahead of their competitors in the market, employees are being divided into teams and given the task of ensuring that these goals are either achieved or achievable. This can easily lead to conflict of interest in an organisation if an employee oppose or disagrees with the idea of another employee (Janssen, 2003). This happens when new ideas send negative signals to other employees, for instance when an idea by an employee makes other employees fell unsecured or uncertain about their role in the team or organisation (Janssen, 2003; Jones, 2001).

On an international level, conflicts of interest amongst employees are usually associated with stereotyping and workplace discrimination. This means that companies who have employees from different races tend to have some of their employees, grouping their fellow staff based on their country or place or origin. They can either be associated with their religion, culture for ways of life. Let us take an example of an advertising team that is made of Christian advertisers from U.S and Muslim advertisers from Saudi Arabia. The advertisers might experience a conflict of interest if the Christian advertiser from the United States proposes an advert with a female celebrity (E.g. Rihana) to wear sexy dress, which is considered immoral in the Islamic world especially in Saudi Arabia.

In other to resolve issues such as this in an organisation, strategic measure will be deployed to ensure proper documentation of employee's information and activities in the workplace. Set rules and regulations that will be made compulsory and applicable to all employees is also another way to combat this issue. This way, the company can be bettered positioned to handle conflict of interest based on their documentations on each employee and evaluation of employee's conduct in reference to the organisation code of conduct.

4.0 UNAUTHORIZED PAYMENT

Unauthorized payment is one of the financial issues that have plagued international business. In many of the countries across the globe, this is considered a crime, illegal and punishable by law either in fine or by jail sentence. Financial crime has often been defined as a crime against property, which involves unlawful conversion property belonging to another person into personal use and/or benefit. Pickett and Pickett (2002) went on to support this argument by defining financial crime as the use of deception for illegal gain, normally involving breach of trust, and concealment of some or all parts of the activity.

On a business level, unauthorized payment involves any transaction made for or within an organisation for which appropriate approval was not received. Normally, employees engage in this kind of activity for their own personal benefits. This can be both a complicated and serious issue in international business, because employees from other countries can easily run away with the company's money either back to their country or other part of the world without possible trace. Considering the gravity of risk associated with this issue in cases where companies loss hundreds of thousands if not millions, it can easily be seen why this is a big issue in international business.

Among all issues discussed, this seems to be more easily avoidable. It can be argued that companies that have strong financial departments should be able to handle the issue of unauthorized payment. Companies that develop a system, that ensures that all payments going out and coming into the organisation passes through the finance department. A single entity should be employed to sign all signatures required any for the company's financial transactions. This will better position the company to battle any offense such as forgery, fraud and unauthorized payment because only one individual have the power to handle authorize all payments within the organisation.

5.0 ENVIRONMENTAL ISSUES

Environmental issues in workplace are amongst the most debated issues in international business and it is to broad understanding it has been difficult as well. Environmental issues such as cleanliness, culture and organisational structures with no doubt do pose both physical and emotional challenges when things go wrong. In international business, some companies from developing or under-developed nations don't take employee's health serious when it comes to workplace environment. Such cases have been discussed in the media and highlighting scenarios where employees are subjected to work in unsafe environments that affect their health both in present and future.

This can be applied to Ashworth's (1965) presentation, where he considered absence from work due to sickness and found out that there is a considerable connection between workplace environment and employee's illness at work; which results in negative effects for employees, employers and the society at large. Consequently, poor workplace environment constitutes public health problems with economic burden on the society (Alexanderson and Nordlund, 2004).

Environmental issues related to workplace does not only affect employee. On the unethical background, its effect can also relate to those that have hazardous impacts on the society such as high carbon emission and pollutions. Companies constantly cool their plants from waters in ocean near them, thereby destroying the aqua life on these oceans. Some of these effects can also be as a cause of nature such as the recent Japanese Nuclear problem; but the fact is that environmental issues affects business across the globe, and most of these issues are as a result of unethical behaviour from international companies. 

The government has the biggest role to play here, as they have much power than the employees in handling issues such as this. Proper regulated rules and regulations should be set by the government to monitor workplaces; as ways of ensuring that workplaces within the country are very comfortable and most importantly unhazardous to employees health or the environment in general. 

In conclusion, the above arguments have revealed that they are many ethical issues face by business today, nevertheless as a result of the project requirement only five of these issues where discussed in details. The conclusion drawn from the discussion is easy to understand and points out the clear importance of controlling unethical issues in international business. Some of these issues can include but not limited to lose in company shares, high employee turnover, high stress and absenteeism, and negative company image. The five issues discussed above where selected to ensure that all the critical points in ethical issues in international business are highlighted. The above analyses also reveals high investigation to support all the claims.  

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