Page 243 - DMGT548_GLOBAL_HRM

Global HRM

Notes The ethical relativist believes that there are no universal or international rights and wrongs. It
all depends on a particular culture’s values and beliefs. Thus if the people of Indonesia tolerate
the bribery of their public officials, this is morally no better or worse than the people of Singapore
or Denmark who refuse to accept bribery. For the ethical relativist, when in Rome, one should
do as the Romans do. While ethical relativism may be appealing to those who fear cultural
imperialism, it is a logical and ethically incoherent theory.
The ethical absolutist (or imperialist) believes one should continue doing what they will do in
their home country. When in Rome, one should do what one would do at home, regardless of
what the Romans do. This view of ethics gives primacy to one’s own cultural values. But the
opponents believe that ethical absolutists are intolerant individuals who confuse respect for
local traditions with ethical relativism.

Some people’s behaviours are wrong wherever they are practiced (e.g. bribery of government
officials), other behaviours may be tolerated in their cultural context (e.g. the practice of routine
gift giving between Japanese business people). When PCNs discover too late that the political-
legal environment in which their home-country policies were formulated is significantly different
from that of the host countries in which they operate, the results can be extreme.

Example: US expatriate bank manager in Italy who was applied by the local branch’s
recommendation to grossly under-report the bank’s profits for income tax purposes and insisted
the bank’s earnings be reported in the same way as they would in the USA accurately. Later at
the bank’s tax hearing, he was told by the Italian Taxation Department that the bank owed three
times as much tax as it had paid. This reflected the Italian Taxation Department’s standard
assumption that all firms under-report their earnings by two-thirds. The new assessment stood
despite the expatriate’s protests.

The ethical universalist believes there are fundamental principles of right and wrong which
transcend cultural boundaries and that multinationals must adhere to these fundamental
principles or global values. They can distinguish between practices that are culturally different
and those that are morally wrong.
It has been identified that honesty, compassion, responsibility, freedom, respect for life and
nature, fairness, tolerance and unity (family or community) are core global values to which
people subscribe irrespective of race, culture, gender or religion. The challenge for business lies
in incorporating them as core business values and aligning the staff to these values.

Example: The value of respect might include valuing differences (gender, sexual
orientation, race, religion, etc.), sexual harassment prevention and understanding stereotypes
as well as workplace safety, product safety and environment protection. The challenge for
managers operating in diverse cultural environments is that different cultures will prioritise
core ethical values differently and will translate values into specific behaviours differently. This
is the main reason why cultures clash and is the essence of a true ethical dilemma. Like in USA,
freedom is regarded as the most important global value whereas in Asia, family or community
unity includes fairness, honesty and responsibility along with freedom and unity as top ethical
values.

Did u know? Caux Round Table Principles for Business Conduct
It is the initiatives in international business self-regulation developed in 1994 by Japanese,
European and North American business leaders meeting in Caux, Switzerland. This was
the first international ethics code for business and aimed to set a global benchmark against

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