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18 May 2018

Cultural Differences and Ethical Standards

When expanding business in foreign countries, the possibility of unknown cultures may arise such as the bribe in question. Do you think that if you were to pay the bribe, that would guarantee your business would grow in that country? Once being allowed to gain entrance, do you think that there would be additional fees to suppliers or dealers?

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Casey Durgan
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20 May 2018

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Comment this discuss in few paragraph ?

Cultural Differences and Ethical Standards

Should you pay the 10 percent commission? Justify your response.

The type of country in which this scenario takes place. As Hill (2009) points out there are high and low context countries. Asian, Latin American, and Middle Eastern countries are high context countries where the message must be interpreted based on not only what was said, but the person's social status, and other cultural indicators present (Hill, 2009). In low context countries, what is said is the message and there is no need for further interpretations (Hill, 2009). Therefore, it would depend on where this interaction is occurring and who is asking for the commission (status, rank, business title, etc). These commissions may be a normal part of doing business in a certain region of the country. However, there are strict laws governing bribes (Mestre, 2015) and if I suspected that this commission was a bribe for business or personal advantage, then I would not pay the commission. This would eventually have a detrimental effect on my business and go against my ethics.

Does it make a difference if your competitors routinely pay such commissions? Explain why this may or may not have an impact on your decision.

As Mestre (2015) explains, bribes are so wide spread that the fundamental alter the business landscape in certain markets. As he states, there is a, "barrage of extortionate demands for bribes in foreign markets (p.2)." Unfortunately, bribes reward the corrupt and not eh efficient which a free market should award the most competitive and efficient company (Mestre, 2015). So these types of "commissions" are frequent around the world and should be calculated in to a SWOT (strengths, weaknesses, opportunities, and threats) analysis when deciding to enter a certain foreign market. A company needs to decide what risks they are willing to take to enter into a new market. Will they pay bribes furthering the decline of a market and risk large legal penalties? Or will they not pay the bribes knowing that this will make it harder for them to do business in that market?

Do you think there should be more or fewer attempt to regulate international ethics? Why? Justify your answer using the research you have done in preparation for this assignment.

The United Nations (UN) and the World Trade Organization (WTO) both have areas that monitor and regulate ethics (websites, ND). Additionally, the United States and other countries have, for example, anti-bribery laws that penalize both the bribe giver and taker (Mestre, 2015). Given all of the regulation, there is still wide spread corruption in the global marketplace (Mestre, 2015). Additionally, new technologies far exceed the pace of legislating new laws and policies (Herther, 2018). Therefore, it seems like a combination of corporate ethic policies, government intervention, and international trade agreements can help to combat unethical behavior in international business. It is important to have multiple areas of regulation as ethical behavior varies by country. For example, what Americans consider unethical may not be unethical in another country.

Case Study #3

TO WAL-MART OR NOT TO WAL-MART?

Wal-Mart is a $250-billion-a-year retailer. Eighty two percent of U.S. households made a

Wal-Mart purchase in 2002. It is the largest company in the world with a global

workforce of 1.4 million. Where Wal-Mart competes the average grocery prices are 14%

lower. In the past it was General Motors, IBM and other companies that were considered

to be the leaders in industry and the ones to watch. Now it is Wal-Mart that is being

studied in universities around the world.

At Wal-Mart, cost is king. Costs are kept low and this translates into goods being sold

for less. The entire organization is focused on reducing costs and passing those savings

on to the consumer. This allows poor people to buy food and other necessities that they

otherwise might not be able to afford. In the U.S. it dominates sales in a number of

categories : 32% of disposable diapers, 30% of hair products, 26% of toothpaste, 20% of

pet food and 13% of textiles.

Wal-Mart simply has developed the most efficient methods for operating their business.

Their inventory management, through a network of scanners, computers, and at-the-ready

suppliers, makes it the leader in successful turnover of inventory. How can we blame

Wal-Mart for being the efficient cost conscious giant that it is?

The Wal-Mart phenomenon has occurred at the same time that high-paying skilled jobs

are being lost in the manufacturing sector. When these jobs are lost, the alternative often

means being employed at Wal-Mart at a much lower pay scale with reduced benefits

such as medical insurance. Its labor costs are twenty percent less than those at

unionized supermarkets, and sales clerks make less, on average, than the federal poverty

level ($8.50 an hour).

Barbara Ehrenreich* has described the problems faced by the under class, such

as waitresses and Wal-Mart employees. They barely survive on a day-to-day basis, living

from hand to mouth, with no reserves, no safety net, no medical insurance and almost no

prospect of improving their positions in life.

The loss of manufacturing jobs has affected the lifestyles of many people. What they see

is the reality of reduced opportunity with a permanent reduction in wages and standards

of living. They are trapped in a new marketplace, with diminishing expectations and few

alternatives to shopping at Wal-Mart. This is a change in our American culture--the

dreams have now been down-sized.

Is Wal-Mart the hero or the culprit? After all, low prices, competition, and growth have

all been mantras that Americans have been chanting all of our lives. We were

told that if you built a better mouse trap, everyone would come to you. Well, Wal-Mart

has built a better mouse trap. Is there any logic in our looking at Wal-Mart as a

contributor to the loss of some our middle class or is it just jealousy and sour grapes?

For one thing, its hard line on costs has forced many factories to move overseas.

Wal-Mart imported most of the items it sells. Environmental standards

are lower in these countries where these goods are manufactured than they are in the

U.S. This probably results in increased health issues and costs. In addition, shipment of

goods many thousands of miles to their ultimate destinations, involve utilizing the

world’s limited oil resources. When you add up all this, the cost of the goods may be

greater than if they were produced in this country.

Another issue is that Wal-Mart is a non-union employer paying wages that are below the

poverty level, with minimal health insurance coverage. As many employees cannot

afford the co-payment required for doctors office visits, when a medical crisis occurs they

are forced to use the emergency room facilities of local hospitals. The result is that the

community bears the direct cost of their medical treatment and the indirect, as well as

ancillary costs such as diminished work capacity, child care, etc.

There are other economic ramifications to the Wal-Mart explosion. When Wal-Mart

arrives in a town, “main street” erodes. Neighborhood stores that used to provide goods,

services and paid their workers well, are eliminated, uprooting families and ways of life

in the process. The Wal-Mart decision to saturate Oklahoma City, resulted in the closure

of 30 supermarkets.

If Americans shop with price being the only factor that determines where they

purchase their goods, doesn’t this mean the permanent down-sizing of our standard of

living? How can the local retail establishment survive when they can’t compete with a

Wal-Mart? Look at what has happened to the local supermarket, bookstore, hardware

and clothing store. The demise of these small business constitutes the loss of a middle

class of society in a community. We need to think: As consumers are we better off

paying a little more to enable the local merchants and their families to survive in order to

preserve the character of our communities and society or should we concern ourselves

with price only?

HERE IS YOUR DILEMMA:

You are the mayor of a small city in the West. You can’t worry about the 4,700 workers

at IBM and the other workers at technology companies who lost their jobs. Your problem

is a more local one.

A Wal-Mart representative has approached you about the possibility of building a super-

store within your city limits. The store would serve communities within a twenty-five mile

radius. The land that they intend to build upon would require new zoning. Wal-Mart

would expect a certain amount of property tax and other relief. If your city does not

want a super-store, you are certain that one of the other towns close-by would be happy

to accommodate their needs.

What studies would you require before deciding which way to vote? What ramifications

do you foresee with this new super-store? What would you ask of Wal-Mart before

agreeing to their request? How much input would you seek from the residents of your

city

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