International Business Competition and Integrity

Author: Yin Jizuo et al.
Compiler: Weng Shaojun, Ma Xun
Publisher:
Publication Date: 2001-12-01
Features: The publication of this Chinese edition is merely one symbol among many representing today's turbulent and transforming era in China. Ten or more years ago, China did not need this book and would not have been particularly interested in it. However, with the emergence of private enterprises, China's economy has taken on a vibrant new face. Along with the rise of entrepreneurs and private businesses, the evils of classical capitalism—such as exploitation, prioritizing profits over fair treatment of workers, and the justifiable criticism associated with it—may also emerge. The experience of developed Western countries shows that the evils of free enterprise can be prevented through legislation, public opinion, public oversight, and self-restraint on the part of businesses themselves. The discussion, clarification, and justification of these restrictions constitute the field of study known as "economic ethics." This book falls within this research domain.
Economic ethics as a movement and field of study began approximately 25 years ago in the United States. To this day, it has spread to every corner of the globe, much like the development of the economy itself. Now, one might say—though from a Western perspective—that the main ethical issues of the industrial age have been revealed, even if they have not yet been solved, at least they have been raised. Regrettably, the most serious problems among them—such as cruel exploitation, high unemployment, forced labor and child labor, bribery, and corruption—have largely shifted along with business itself to developing countries. As economic practice evolves, new issues continue to arise. Ethical challenges in the information age are now emerging. The primary targets of ethical criticism have long been multinational corporations from developed countries, and this book was initially dedicated to these corporations.
The intended readers of this book are not companies that are indifferent to ethics or those that place profits above all else. Rather, it is for companies that seek to act ethically—whether out of ethical motivation or the belief that ethical practices will also be good for business. Many companies, when faced with criticism as targets of scrutiny, do not know how to respond. When they find themselves in a new cultural context, they may be unsure which values to follow, whether to simply conform to local customs, or even whether to pay workers less than what is necessary to sustain their lives or to follow practices that pollute the environment—even if the company has the capacity to avoid doing so. This book argues that companies that wish to act ethically must establish their ethical standards and adhere to them, regardless of where they do business. If a company changes its ethical standards when moving from one country to another, it has not truly been faithful to its own standards. However, the standards the company upholds must be ethically justifiable both to itself and to others.
The strategic approach of this book is not to prescribe what those standards should be, but to develop what I call "ethical criteria"—principles that can be applied to the specific standards adopted by any company. This book demonstrates how these criteria can be developed and defended, and how adherence to them can enable multinational corporations to avoid ethical issues in their business operations in less developed countries, thereby shielding them from criticism.
Although this book does not list ethical requirements for all companies in all places, its criteria are not limited to multinational corporations from the United States or Western Europe. Any enterprise, regardless of its country or culture, should act in good faith, which means acting according to standards that it voluntarily acknowledges and accepts as ethically justifiable. When ethical standards are perceived as conflicting between different countries or cultures, negotiation is an appropriate means of resolving the issue. Neither party can agree to standards it considers unethical while still maintaining its integrity. However, each party can accept conditions it would rather avoid than compromise its ethical principles, thereby preserving its integrity. It does so in the hope of reaching a mutually satisfactory agreement. Such an agreement will be fair, provided it is not imposed on either party and does not harm third parties.
This book was written in 1992, and the examples and topics discussed reflect the most pressing issues faced by Western multinational corporations at that time. Although some examples may now seem outdated, and some issues may have evolved and changed, these principles remain relevant. Certain situations, such as the tensions between the United States and Japan, have eased and altered. Other changes, such as discussions about former Eastern European communist countries, have unfolded in various ways across different nations. Since the writing of this book, ethical issues related to globalization and the rise of the information age have emerged, which were not yet clear a decade ago. However, these criteria remain appropriately applicable to these new challenges. What is required is moral imagination and a willingness to actively engage with emerging issues.
This book has been well-received by both Western academia and the business community. Some companies use it as part of their ethical training programs for all employees, while others distribute it to senior executives. Many university classes use it as a textbook. The final chapter of this book has been translated into Italian and published separately. It has also been used in other places, including Mexico, Brazil, Japan, and Hong Kong.
Chinese readers can utilize this book in many ways. Some may simply study it to discover how respected American companies handle ethical issues in their business operations in different countries, which issues they consider ethically problematic, and their attitudes toward these issues. Others may view it as a model to help develop business standards at the international level. This book can make readers and students more sensitive to ethical issues and understand how to research and analyze them from an ethical perspective. However, when Chinese readers consider appropriate ways to manage businesses, they must find what suits their own culture, history, context, and values here.
What remains uncertain is how China's economy will develop in the future—it holds both great possibilities and certain risks. Prosperity for businesses comes when they act ethically. However, it is not enough to have ethical people and benevolent, honest leaders. Appropriate social support and legislation that can be ethically justified and enforced are also needed in matters of contracts, workers' treatment and compensation, environmental protection, and the promotion of public interests. As the economy becomes increasingly globalized and integrated, ethics will play a greater role in addressing these challenges. I hope that the readers of this book will find imaginative ways to promote economic development in China and globally, which will benefit China, the Chinese people, and all nations and peoples related to China.
Richard De George
August 2001 (Translated by Lu Xiaohu)
Ten or more years ago, China did not need this book, nor would it have been particularly interested in it. However, with the development of private enterprises, the evils of classical capitalism have also emerged in China. The experience of developed Western countries shows that the evils of free enterprise can be prevented through legislation, public opinion, and public oversight. The discussion and justification of these restrictions constitute the field of study known as "economic ethics." As the first comprehensive work on business ethics in multinational corporations, this book examines moral debates surrounding ethical operations in major markets worldwide and provides criteria for multinational companies operating in less developed countries. Thus, it has been well-received by both Western academia and the business community!