Ethical issues in global business

Ethical issues in global business

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Introduction

As stated by Martens (2004), regardless of the similarities in the approaches of various countries’ companies to business ethics, basic dissimilarities are evident in every aspect of each country’s ethic programs. This has resulted to various similar programs initiated by different countries. This report seeks to explain various business ethical issues in Europe (Spain). The report elaborates on the areas where each country may have, and strength and their weakness to deal with ethical issues.

Case study of ethical issues in Europe (Spain)

As stated by Martens (2004), it is not possible to say that there exists a unified business ethics concept in Europe since there is a diversity of various practices among nationwide cultures. Nonetheless, in a summary of the significant approaches in European business ethics, a general distinction holds between academic business, ethics, and the corporate social responsibility movement in various European countries for instance Spain (Martens, 2004).

As mentioned by Webley (2004), in Europe and Spain especially, business ethics is connected to general society standards. The business community in Spain promotes the best principles of practice. Kelleher (2004) emphasizes that the business ethics is becoming more powerful as corporations, citizens, and even government are starting to understand the significant of moral business practices in the society. According to Kelleher (2004), in Spain bribery occurrences and money laundering indicates significant concerns and the government has enforced various strict laws and adopted ethics programs. In summary, Webley (2004) notes that local and international companies presently have an enhanced interest in dealing with ethics in business and especially dealing with corruption.

Apart from the country’s strength in dealing with ethical matters, Webley (2004), there are various weaknesses. First, as stated by Toffler (2004), many business leaders do not recognize the importance of having ethics policies in their companies. Secondly, Toffler (2004) adds that lack of attention given to the moral code related matters of medium-sized and smaller companies is another area of worry. There is a hypothesis that all private-sectors act similarly of experience similar problems. As a matter of fact, nearly 95% of the companies in Spain is composed of fewer than 50 employees they give the majority of the jobs (Webley, 2004). It is surprising that the differences between the small and influential companies have not been broadly acknowledged regarding ethical behaviors. Finally, as stated by Webley (2004), a weak point is seen in the value basis of various commercial ethics programs. Research has indicated that given value terms like fairness and trust happen again in the mission statements or prefaces to organization codes (Martens, 2004).

In his recommendations, Kelleher (2004) states that even though various companies in Spain have been able to deal with business ethics, the government ought to have improved educational opportunities to enhanced public knowledge. Kelleher (2004) further emphases that the workforce needs to be familiarized with business dilemmas and the way they ought to conduct themselves in the workplace and outside.

Kelleher (2004) states that former social mores have been entrenched in Europe for quite a time, though the Western business ethics concept is still an emerging discipline in the whole Europe. The interest in business ethics and business practices trainings has been increasing in various European countries and specifically referring to Spain for the last ten years (Kelleher, 2004). According to Webley (2004), the weight is gradually moving from academia, where intellectuals have been learning business ethics theory, into the normal business setting. The new sense of significance can be contributed by various factors.

In 1997, European economic meltdown resulted to governmental reforms founded on anticorruption actions (Webley, 2004). The reliance on overseas direct investment required companies to enhance transparency and make better their commercial governance systems. As well, a rise in the quantity of business done globally has resulted to rise in consumer activism, making complicated consumers who are dissecting business practices more (Webley, 2004). Various European governments and especially Spain is enacting accounting improvements to minimize devastating consequences of the past corporate scandals. Even though, the future impacts of the improvements are not clear, the reforms are noteworthy in Spain. In some European countries, Spain inclusive, enactment of anticorruption laws is not consistent and politicians do circumvent or ignore regulation of the government (Toffler, 2004).

As stated by Kelleher (2004), majority of Spain business training programs give general information on business ethics and include explanations of the topic relevance. Furthermore, as stated by Toffler (2004), various organizations are starting to give issue-related training designed for given departments or functions. To achieve the full understanding of business ethics importance, organization in Spain have frequent communications regarding the topic and change the medium through which the information is passed (Kelleher, 2004). For instance, companies can include references to various businesses conduct in organization’s newsletters, messages and even staff meetings (Toffler, 2004).

There are various methods that can be used to enhance business ethics in Spain and other countries. For the business ethics to become established in Spain and other countries, there need various reforms within various organizations. First, on a national level, government needs to enforce various regulatory bodies. The police force has to follow normal procedures in dealing with crime and corruption. Anti- corruption committees have to publish reports that identify law breakers and prohibit them from public bidding. Secondly, the self-owned businesses should make a greater effort make codes of conduct, give business ethics training to its workforce, and monitor workforce behavior (Webley, 2004). Thirdly, learning efforts are fundamental suppose business ethics is to be successful in Spain and other countries. Functions like round tables, conferences and seminars, ought to be continuously conducted to boost ethical standards and objectives. Additionally, not for profit organizations ought to have regularly made business ethics information freely available (Toffler, 2004).

In conclusion, today’s business arena is one that requires the upholding of ethics especially if an organization is to attain a competitive advantage and be effective in all that they do (Colson, 1996). Employees of every organization and institution normally have a code of ethics by which they must abide to if they are to be part of that organization. The code of ethics is normally used by organizations as guides for acceptable and ethical behavior among other things (Kelleher, 2004). In their day to day lives, employees are normally faced with a number of ethical challenges of which they must deal with. With such challenges, Reynolds and Phillips (2005) state that employees must employ ethical standards as guidelines to solving whatever dilemmas that may arise.

Diversification in the global market

Wright (2007) defines globalization as a term used to describe the process by which the world economics, societies, and cultures have been integrated in a global network of network communication, transportation, polity and trade. Essentially, the term is used to describe the global economic integration where various national economies have been integrated to become one international economy through various aspects including trade, capital flows, foreign direct investments, migration and the spread of technology (Wells et al., 2001). In essence, the concept of globalization is supported by all facets of life including economic, socio-cultural, technology, political, and even biological factors. It is through business globalization that business gaining ‘California’ Syndrome.

The number of multinational and transnational companies is on the rise due to changes in business dynamics and an increase in pressure on businesses to diversify their operations and make the most out of opportunities in far away nations (Carlson, 2006). Every company strains to get a greater market share and be innovative. Competition has also had substantial impacts on the marketing of any company’s product. Companies still feel immense pressure to ensure that they redesign their operations so as to make the most out of the available opportunities (Wright, 2007). The level of competition faced by international Companies is high which had led to increased emphasis on the strategies that they can use to improve its positioning in various market segments. As stated by Wiedmann (2005), it is through innovation that a can produce a new product in the market and hence capture a greater market value.

To be able to recognize the values as well as rules that are essential to a secure and just world, and to be able to benefit from global and innovative market, operation managers are to improve global politics (Maheswaran and Yi, 2006). According to the two scholars, markets of International level offer a varied range of opportunities for firms that have products together with services which are in high demand. The newness, the nature of attractiveness, cultural adaptation as well as the suitable marketing strategies that are being put into practice by various companies can assist a vast deal. Geisler (2003) asserts that to be able to assess the potentiality of the market a firm will seek to identify the summative demand for a given product and be able to relate it with the introduction of the product and its distribution. The growth in terms of population provides a coarse estimate of the anticipated future market potentials (Raggio and Leone, 2009).

Companies are required to deliver a strong sales growth coupled with margin expansion and at the same time embrace their revised strategy of coming up with brands that are unique in their own way (Carlson, 2006). As stated by Roehm and Brady (2007), this leads to the creation of scale advantage through horizontal integration, creation of a strong structure of business globalization and commercialization of innovations. Making a balance between globalization as well as localization is one of the key challenges in the international market. In general terms, the closer the definition of the market segment, the less essential are the national stereotypes (Carlson, 2006). Within the national market, according to Carlson (2006), there exists a trend towards higher levels of greater similarities on the specifications of the product, price and packaging. Conversely, Taylor (2005) argues that cultural as well as national differences exist and need a high level of flexibility in terms of communication with clients.

Though competition with local businesses is one of the reasons for the high levels of competition faced by international companies, both have an influence on the strategies that are adopted at national levels (Taylor, 2005). Furthermore, international businesses are responsible for nearly 60% of global trade volume which implies that their performance may affect national economies and influence global economic trends (Raggio, & Leone, 2009). It is imperative on individual businesses and researchers to come up with strategies through which local and international businesses can strategize their operations such that they aid improvement of global economic conditions and their profitability and so the business plan (Taylor, 2005).

Many international companies have adopted extensive branding strategies to help improve their brand image and sustain their operations during economic hard times (Taylor, 2005). A critical review of branding reveals that it is a strategy that is commonly used in markets so as to create awareness on a product, develop a unique image of a product and help improve loyalty to product (Taylor et al., 2009). The uncertainty that has gripped the international market due to market shocks has forced various companies to review their operations and come up with clear roadmaps to improving market of sunlight product (Raggio, & Leone, 2009). Furthermore, extensive branding strategies at the international marketplace are being driven by an increase in the number of players at both national and international level that compete with international companies. It is important to understand the requirements in branding and the brand development process. This should be while injecting creativity and innovation in developing brands remain a critical requirement for international businesses in strengthening their operations (Carlson, 2006).

The increased use of celebrity endorsements amongst businesses and strengthening of corporate social responsibility strategies are seen as direct efforts by local and international businesses aimed at improving and maintaining their brand images (Raggio, & Leone, 2009). Evidently, innovation plays a crucial role in determining the overall gains that an international business will make. The multiple challenges faced by international businesses which include; having to operate in different markets segments, varying cultures, and complex business models and differing expectations by organizational stakeholders may hamper and complicate the brand development and branding processes (Wiedmann, 2005). The geographical diversification of business operations may also affect coordination of branding and brand development activities (Raggio, & Leone, 2009).

In summary, every business strives to gain ‘California Syndrome’ through various strategies. It is however important to note that due to the changing technology and customer preferences plus competitors businesses are to redesign their competition strategies.

Academic reflection

Basing on the report presented, it is worthwhile noting that the success of the business organization is dependent on the proper decision making models. This is because it will aid in solving the most prevalent problems that are usually experienced in the business organizations. It will also weigh the advantages and cons that may be associated with the implementation of certain decisions (Wiedmann, 2005). The study pints out that for success of an organization proper business ethics has to be maintained. Proficient decision making strategies are essential for the success of a business or company. Decision making depends on both internal and external factors affecting an organization and so the importance of studying business ethics.

This is also one of the imperative stages that researchers recommend being followed. However, most individuals and organizations tend to ignore this pivotal stage and eventually end up incurring losses as a result of lack of the attainment of their set goals (Carlson, 2006). Though it is difficult to ascertain all the facts needed in order to take a decision, it is significant to note that without proper search for “some” of the facts will lead to the failure in the attainment of the organization’s set objectives. The organization’s activities are usually carried out timely, and this has an insinuation that the facts should also be allocated a specified period so that they can be processed within the limits of the time given and facilitate the measurement of the effectiveness and efficiency of the organization under question (Sanders, 1999). In the collection of the facts and the requirements that the solution should meet; which is the decision in this case, there is the need to evaluate the objectives of the firm in relation to the intended decision to be made (Bateman and Snell, 2007). This will aid in the analysis or evaluation and comparison with the other available alternatives that can be used.

This stage is crucial, especially in an organization as it involves consultations with individuals or the shareholders who will be affected by the choice of the decision to be undertaken. This is pivotal because by seeking input or suggestions from the share holders will not merely aid in giving necessary information but also will act as an initial step in their acceptance of the implementation of the decision (Johnson and Turner, 2003). Essentially this is the core phase of the decision making that the firm should adopt in the process of seeking and gaining consensus in the implementation of the necessary decisions (Carroll and Buchholtz, 2008). Involving the arguments and suggestions from all the concerned parties makes them feel they are part of the decision making process. This reduces chances of aggression and lobbying of the complaints in case the postulated solutions that are finally implemented backfire or fails to meet the set goals. This is an art of problem solving which is usually attained through better decision making and implementation process and reduces aggression in the organization (Stamatis, 2002).

Proper planning and management of the business organizations results in the attainment of the organization’s set missions or objectives (Ricks, 2006). However, the attainment of the set goals is dependent on the decisions taken by the management of business. The study is significant as it points out the strategies employed by Spain in dealing with business ethics. This should be done in accordance with the laws or guidelines that are set so as to have mutual consent or consensus before the implementation of the decisions (Sanders, 1999). From this account, it can be deduced that the proper management of the business operations where by every individual is given a chance to express his or her state of the mind as far as the decisions of the business organization are concerned (Wiedmann, 2005).

With the varying needs of the companies and the dynamic changes in both the structural and organizational structures of the firms, the leaders of the organizations are supposed to be endorsed with the necessary practical and theoretical data. They can also be endorsed by information on the best strategies to be implemented in the conduct of the business activities (Bateman and Snell, 2004). For instance, decision making which is a key factor to any event or action that is to be undertaken. Consideration should be taken that the decisions taken and implemented by the management of the business organization can only be functional and lead to the attainment of the objectives set, this will yield to the mutual satisfaction of the share holder’s demands and thus the firm will be managed without any qualms (Bateman and Snell, 2007).

The study of business ethics in Spain does not only help its organizations in managing business ethic but other countries as well. The recommendation provided for Spain is applicable in almost every organization form Spain and other countries and thus the significance of the study. References

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