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Ethics and Globalization in Business


A business will only manage to keep up its reputation if it fully recognizes the established business ethics in its environment. As such, each and every firm that aspires to grow to great heights must be prepared to follow to the letter the codes of conduct that govern its day to day operations. According to Ishikawa (2003), “A code of conduct is a set of rules adopted by transnational corporations (TNCs) to regulate working conditions and the management of contract factories.” Business ethics are an aspect that goes hand in hand with successful business management. Ethics is the moral principle which people inject in their process of decision making and which helps to temper the very last outcome in order to conform to the rules of their society. This is why these ethics have attracted international attention. This research paper will discuss the significance of a global approach to business ethics.

Business decisions and the surrounding environment

Increased scope of globalization has made it necessary for every firm to not only look at the relationship between it and the immediate environment, but to also consider the entire business fraternity in the whole world as well. Consequently, the interdependence of countries that differ politically, socially and legally has called for the moderation of some of the business ethics of companies to enhance peaceful co-relation and mutual understanding among international firms. An understanding of a country’s cultural norms is crucial for a meaningful business transaction with the said country. For instance, Japan as a nation is the outcome of the interrelation between Buddhism, Shintoism, Confucianism and modern Science and Technology. Therefore, anyone who deals with firms from Japan must understand its work ethic, economic culture and their views on of business thinking. This has been one cause of the development of international concern on business ethics. The outcome has been increased volume of trade among firms situated in different countries.

Business and ethics

New trends that arise daily are another factor that makes it necessary for a firm to practice proper business ethical behavior. These trends on the other hand may serve as important burdens to business companies that do not practice proper business ethics. Therefore, proper ethical behavior in business is the only possible way to keep up with these upcoming trends and keep away from possible lawsuits. One factor that will lead us into determining whether a firm is ethically moral or not is the way it treats its employees. This is an exact representation of how the same firm will treat the customers in the market (Lockheed & Terris 2005). It can be seen from this argument that the significance of ethics to the entire business world is global and superlative.

Ethics and globalization

Operation of business companies in foreign markets has left them with no other options other to conform to the established business ethics of the host country (Svara 2006). The fall of trade barriers has increased the level of international trade leading to the need for development and observance of harmonized business ethics. Global corporations have realized the need to formulate uniform codes of conduct and business ethics to avoid unpredictable behavior of different stakeholders in this field (Nish 2005). These codes have so far proved to be the only viable means of protecting a country’s citizens, their interests as a nation and the global environment as a whole.

Ethics and quality of production

International business ethics have not only guided managers but also employees. Furthermore, they have let them practice codes of conduct that have created and maintained public confidence and trust in their services and products. This trust is what keeps the firms in the market and enables it to maintain high sales throughout (Josephson 2002). Therefore, without practicing proper business ethics, a firm will stand lose all its customers and in the end close down no matter how large it may be. We therefore realize of what crucial significance the codes of conduct and proper business ethics are to the welfare and survival of a business company in the market.

Solving of cultural differences

A global approach to business ethics is what has turned the business world into a disciplined field with little or no cases of strained differences or disagreements. The formation of standard business ethics has promoted uniform business operations in each and every part of the world (Aguiler 1994). This has enhanced general growth of the economy of the world. The overall outcome has been the rise in the living standards of most large-scale businessmen and women across the globe. Without the codes of conduct and the well established business ethics, this would have been an extremely hard achievement to come by.

The benefits that have accrued to the whole world as a result of the harmonization of the hitherto diverse ethics in business are unlimited. Another such benefit is the global understanding among countries that once existed as independent and ever conflicting. This has given birth to international peace and stability among countries that carry out their trade together (Arrow 1989). Realization of the need to trade together was the main step that saw this through. It is obvious that no country can exist independently on its own without the help and support of the others. This is the exact reason why countries find it a good decision to remove all trade barriers and instead allow free trade among them.

Reduced conflicts

Most of the significant changes in the business world are as a result of the adherence to business ethics by the various actors in this sector. Currently speaking, cases of black marketing and hoarding are rare to come by, signifying meaningful change in the global business ethics (Caroseli 2003). The whole business market has been made more favorable to any kind of trader unlike the case with a few years ago when these codes of conduct and business ethics were only spoken of and nothing done in their practice. For instance, nearly a century ago, black patients in America were seen as unprofitable and were often denied medical services (Anders 1996). But a more keen observation of ethics has done a way with this.

Lastly, a global approach to ethics in business has led to a fair market share of each firm. Because of the business ethics, each business organization has equal access to the market as all the other firms (Ackerman 1973). As such, no firm stands to have undue advantage over the other. This has led to the growth and development of infant industries in that they are not subjected to unfair trade practices by unscrupulous traders.


In conclusion, a global approach to ethics in the business world has done more good than bad. Major developments in the world of business today are either directly or indirectly linked to the practice of good business ethics by most business organizations across the globe. All the other firms which do not practice good business ethics are called upon to adhere to the international codes of conduct and business ethics for more success in business.

List of References

Ackerman, R.W., 1973. How Companies Respond to Social Demands. Harvard Business Review, 51(4), pp. 88-98.

Aguilar, F. J., 1994. Managing corporate ethics. London: Oxford University Press.

Anders, G., 1996. Health against wealth. Boston: Houghton Mifflin Company.

Arrow, K., 1989. Ethics for practicing managers in modern corporations. Boston: Harvard Business School.

Caroseli, M., 2003. The business ethics activity book: 50 exercises for promoting integrity at work. New York: AMACOM.

Ishikawa, K., 2003. The rise of the code of conduct in Japan: Legal analysis and prospect. Tokyo: Bepress Legal Services.

Josephson, S., 2002. Making ethical decisions. Marina del Rey, CA: Josephson Institute of Ethics.

Lockheed M., Terris, F., 2005. Ethics at work: Creating virtue in an American corporation. Waltham, MA: Brandeis University Press.

Nish, S., 2005. Good ideas for creating a more ethical and effective workplace. Los Angeles: Josephson Institute of ethics.

Svara, J.H., 2006. The ethics primer for public administrators in government and non- profit organizations. Sudbury, M.A: Jones and Bartlett.


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