BUSINESS

ETHICS
PR OF. S TE VE N C. JOCS ON, CHR A, M BA

“Our culture made a virtue of living only as extroverts. We

discouraged the inner journey, the quest for a center. So we lost
our center and have to find it again.”

Anais Nin

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5 THE IMPACT OF CULTURE AND TIME ON BUSINESS ETHICS

TOPIC OUTLINE

֎ The Relationship between Business Ethics and Culture

֎ Business Ethics over Time
֎ The Influence of Geography and Religion
֎ Are the Values Central to Business Ethics Universal?

INTRODUCTION
Ethics is a construct of considerable significance to human beings. Some suggest
ethics emerged to allow families and clans to cooperate in harsh environments. Others
point to its use in governing trade and commerce, even simple bartering. Still others
say ethical behavior is wired into the cognitive structures of the brain, explaining why
we find codes of ethics and morality in texts as diverse as the Code of Hammurabi (a
Babylonian code of law nearly four thousand years old), the Bible, the Napoleonic
Code, and The Analects of Confucius, all of which outline ways for people to live
together in society.

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 THE IMPACT OF CULTURE AND
TIME ON BUSINESS ETHICS

OBJECTIVES

A F T E R R E A D I N G T H I S P A R T O F T H E M O D U L E ,
T H E L E A R N E R S W I L L B E A B L E T O :

 describe the processes of acculturation and enculturation;

 explain the interaction of business and culture from an ethical perspective;
 analyze how consumerism and the global marketplace might challenge the
belief system of an organization;
 describe the ways ethical standards change over time;
 identify major shifts in technology and ethical thinking over the last five
hundred years;
 describe the impact of geography on global relationships and business ethics;
 explain how religion informs ethical business practice around the world;
 explain the difference between relative and absolute ethical values;
 discuss the degree to which compliance is linked with organizational
responsibility and personal values; and
 evaluate the humanistic business model.

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 THE IMPACT OF CULTURE AND
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LET’S THINK ABOUT THESE!

 Are there underlying values that transcend time and place,

however? If so, do the protocols of business ethics embody
these values?
 Is respect a universal value?
 To what degree is any code of business ethics conditioned
by culture, time, and geography?
 Is it possible for business ethics to be universal?

The Relationship between Business Ethics and Culture

Business Encounters Culture

To understand the influence of culture on business ethics, it is essential to understand

the concepts of enculturation and acculturation.

Enculturation refers to the process by which humans learn the rules, customs,
skills, and values to participate in a society. In other words, no one is born with culture;
all humans, regardless of their origin, have to learn what is considered appropriate
behavior in their surrounding cultures.

Acculturation refers specifically to the cultural transmission and socialization

process that stems from cultural exchange.

The effects of this blending of cultures appear in both the native (original) culture and
the host (adopted) culture. Historically, acculturation has often been the result of
military or political conquest. Today, it also comes about through economic
development and the worldwide reach of the media.

Two major conditions affect the relationship between business and culture:

1. Business is not culturally neutral.

2. Organizations comply with legal and economic regulations but then go beyond
them to effect social change and sometimes even social justice.

Balancing Beliefs

Most business organizations hold three kinds of beliefs about themselves:

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 THE IMPACT OF CULTURE AND
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1. The first identifies the purpose of business itself. In recent years, this purpose
has come to be the creation not just of shareholder wealth but also of economic
or personal value for workers, communities, and investors.
2. The second belief defines the organization’s mission, which encapsulates its
purpose. Most organizations maintain some form of mission statement.
3. Finally, businesses also go through the process of enculturation; as a result,
they have certain beliefs about themselves, drawn from the customs, language,
history, religion, and ethics of the culture in which they are formed.

Business performance is a reflection of what an organization believes about itself.

Those beliefs, in turn, spring from what the individuals in the organization believe
about it and themselves, based on their communities, families, personal biographies,
religious beliefs, and educational backgrounds. Unless key leaders have a vision for
the organization and themselves, and a path to achieving it, there can be no balance
of beliefs about profitability and responsibility, or integration of business with culture.

Consumerism and Global Marketplace

Consumerism—a lifestyle characterized by the acquisition of goods and services—

has meant that people have become defined as “consumers” as opposed to citizens
or human beings.

Markets have become more diverse and interconnected.

For example, South Korean companies like LG and Samsung employ 52,000 workers
in the United States, and many U.S. companies now manufacture their products
abroad. Such globalization of their domestic markets has allowed U.S. consumers
to enjoy products from around the world, but it also presents ethical challenges. The
individual consumer, for instance, may benefit from lower prices and a greater
selection of goods, but only by supporting a company that might be engaged in
unethical practices in its overseas supply or distribution chains. Producers’ choices
about wages, working conditions, environmental impact, child labor, taxation, and
plant safety feature in the creation of each product brought to market. Becoming
aware of these factors requires consumers to engage in an investigation of the
business practices of those parties they will patronize and exercise a certain amount
of cultural and ethical sensitivity.

IMPROVE YOUR CRITICAL THINKING SKILLS

1. Can the businesses engaging in commerce in an environment where corruption

is rampant be trusted?

2. Do you think you are an enabler if you patronize the business’ products/services
at the expense of corruption or illegal practices?

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 THE IMPACT OF CULTURE AND
TIME ON BUSINESS ETHICS

LET’S TRY THIS!

Overseas Manufacturing

How can the purchase of a pair of sneakers be seen as an ethical act? Throughout the
1990s, the U.S. shoe and sportswear manufacturer Nike was widely criticized for
subcontracting with factories in China and Southeast Asia that were little more than
sweatshops with deplorable working conditions. After responding to the criticisms and
demanding that its suppliers improve their workplaces, the company began to redeem
itself in the eyes of many and has become a model of business ethics and sustainability.
However, questions remain about the relationship between business and government.

For instance, should a company advocate for labor rights, a minimum wage, and
unionization in developing countries where it has operations? What responsibility does it
have for the welfare of a contractor’s workers in a culture with differing customs? What
right does any Western company have to insist that its foreign contractors observe in their
factories the protocols required in the West? What, for example, is sacred about an eight-
hour workday? When Nike demands that foreign manufacturers observe Western laws and
customs about the workplace, arguably this is capitalist imperialism. Not only that, but
Western firms will be charged more for concessions regarding factory conditions. Perhaps
this is as it should be, but Western consumers must then be prepared to pay more for
material goods than in the past.

Some argue that demanding that companies accept these responsibilities imposes cultural
standards on another culture through economic pressure. Others insist there should be
universal standards of humane employee treatment, and that they must be met regardless
of where they come from or who imposes them. But should the market dictate such
standards, or should the government?

The rise of artificial intelligence and robotics will complicate this challenge because, in
time, they may make offshoring the manufacture and distribution of goods unnecessary.
It may be cheaper and more efficient to bring these operations back to developed countries
and use robotic systems instead. What would that mean for local cultures and their
economies? In Nike’s case, automation is already a concern, particularly as competition
from its German rival, Adidas, heats up again.

Critical Thinking:

1. What ethical responsibilities do individual consumers have when dealing with

companies that rely on overseas labor?
2. Should businesses adopt universal workplace standards about working conditions and
employee protections? Why or why not?
3. What would be required for consumers to have the necessary knowledge about a
product and how it was made so that they could make an informed and ethical
decision? The media? Commercial watchdog groups? Social-issues campaigns?
Something else?

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 THE IMPACT OF CULTURE AND
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Western consumers tend to perceive globalization as a phenomenon intended to

benefit them specifically. In general, they have few compunctions about Western
businesses offshoring their manufacturing operations as long as it ultimately benefits
them as consumers. However, even in business, ethics is not about consumption but
rather about human morality, a greater end. Considering an expansion of domestic
markets, what feature of this process enables us to become more humane rather than
simply pickier consumers or wasteful spenders? It is the opportunity to encounter
other cultures and people, increasing our ethical awareness and sensitivity. Seen in
this way, globalization affects the human condition. It raises no less a question than
what kind of world we want to leave to our children and grandchildren.

Business Ethics over Time

Besides culture, the other major influence in the development of business ethics is the
passage of time. Ethical standards do not remain fixed; they transform in response to
evolving situations. Over time, people change, technology advances, and cultural
mores (i.e., acquired culture and manners) shift. What was considered an appropriate
or accepted business practice one hundred or even fifty years ago may not carry the
same moral weight it once did. However, this does not mean ethics and moral behavior
are relative. It simply acknowledges that attitudes change in relationship to historical
events and that cultural perspective and the process of acculturation are not stagnant.

Shifts in Cultural and Ethical Standards

Bias is built into the human psyche and expressed through our social structures. For
this reason, we should avoid making snap judgments about past eras based on today’s
standards. The challenge, of course, is to know which values are situational—that is,
although many values and ethics are relative and subjective, others are objectively
true, at least to most people. We can hardly argue in favor of slavery, for example, no
matter in which culture or historical era it was practiced. Of course, although some
values strike us as universal, the ways in which they are interpreted and applied vary
over time, so that what was once acceptable no longer is, or the reverse.

IMPROVE YOUR CRITICAL THINKING SKILLS

1. What standard should we discard and what should we keep from the past?

2. On what basis should we make this decision?

3. Is history cumulative, progressing onward and upward through time, or does it

unfold in different and more complicated ways, sometimes circling back upon
itself?

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 THE IMPACT OF CULTURE AND
TIME ON BUSINESS ETHICS

A Matter of Time

Business today has two purposes –

profitability and responsibility – we might
assume that business ethics is in a much
better position now than in the past to affect
conduct across industries. However, much of
the transformation of business over time has
been the result of direct government
intervention.

Governmental regulation and legal interpretations have not been the only avenues of
change over the past century. The growing influence of consumers has been another
driving force in recent attempts by businesses to self-regulate and voluntarily comply
with global ethical standards that ensure basic human rights and working conditions.

Whenever we look at the ways in which our perception of ethical business practice
changes over time, we should note that such change is not necessarily good or bad
but rather a function of human nature and of the ways in which our views are
influenced by our environment, our culture, and the passage of time.

The Influence of Geography and Religion

Business as Global Relationships

Global relationships teach us to be sensitive not just to other languages and customs
but also to other people’s worldviews.

Geography affects a business’s relationship with almost any type of stakeholder, from
stockholders and employees to customers, the government, and the environment.
Hence the growing importance of localization, the process of adapting a product for
non-native environments and languages, especially other nations and cultures. Such
adaption often starts with language translation but may include customizing content
or products to the tastes and consumption habits of the local market; converting
currencies, dates, and other measurements to regional standards; and addressing
community regulations and legal requirements.

 Time
 Personal space (contact and noncontact culture: physical proximity, eye
contact, touch)

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 THE IMPACT OF CULTURE AND
TIME ON BUSINESS ETHICS

Religion and Ethics

A major factor in the difference that geography and culture make in our ethical
standards is the influence of religious practice. Religions are neither uniform nor
monolithic, of course, nor are they unchanging over time.

The Universal Declaration of Human Rights, adopted by the United Nations General
Assembly in December 1948, contains a list of basic human rights such as the right to
life, liberty, due process, religion, education, marriage, and property. Business ethics
will have to balance all these factors when adopting standards of conduct and local
practices.

Are the Values Central to Business Ethics Universal?

Absolute Values versus Relative Values

IMPROVE YOUR CRITICAL THINKING SKILLS

1. Is there a set of universal values that all can endorse?

2. Are there “human values” that apply everywhere despite differences in time,
place, and culture?

3. If not, and if ethical standards are relative, are they worth having?

Business ethics exists on three levels: the individual, the organizational, and the
societal.

At the organizational and societal levels, laws, regulations, and oversight can go
a long way toward curtailing illegal activity.

Business ethics motivates managers to (1) meet legal and industry governing and
reporting requirements and (2) shape corporate culture so that corrupt practices such
as bribery, embezzlement, and fraud have no place in the organization.

At the individual level, when corruption takes place, it is a matter of conscience.

Corruption can be defeated only by individuals acting in accordance with their
conscience and being supported by systems and corporate culture that encourage
such action. Transparency, whistleblower programs, ethics training, and modeling of
appropriate behavior by upper management can create the conditions for employees
to act ethically, but conscience is a personal phenomenon.

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Although ethical practice has been directly influenced by religion, as noted, ethics is
not religion and religious belief is not a prerequisite for a commitment to business
ethics. Furthermore, most religions have high ethical standards but do not address
many of the problems faced in business. And although a good system of law
incorporates ethical standards, the law can and sometimes does deviate from what is
ethical. Finally, in the same vein, ethics is not science. The social and natural sciences
provide data to make better ethical choices, but science cannot tell people what they
ought to do (nor should it).

Absolute values do exist. Abstaining from cheating customers, defrauding clients,

lying, and murder are fairly objective ethical values; the reason for making any
exceptions must be carefully laid out. Ethical systems, whether utilitarian, rights
based, or based on natural law and virtue ethics, are attempts to translate absolute
values like these into workable solutions for people. From these systems has emerged
a basic set of ethical norms for the business world.

Business Ethics and Compliance

Many organizations focus on the letter of the law so that they can claim “good faith”
in their effort to create an ethical environment. Compliance is important, but business
managers must attempt to go above and beyond to clearly model and enforce the
highest standards of ethical behavior.

Normative Business Ethics

Humanistic business model - may provide the answer for businesses that wish
to achieve the dual goal of human flourishing and responsible profits. In this model,
organizations focus on employees as a vital part of the operation and support them in
their professional training, health care, education, family responsibilities, and even
spiritual concerns.

Problem: often focuses on business rather than the employees.

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CHALLENGE QUESTIONS

No. 1
Ana came from the Quezon province where she grew up and studied until senior
high school. Upon transferring to Cavite, she adapted the loud speaking voice, and
some unfamiliar millennial terms of Caviteños. What concept does the scenario
shows?
a. Enculturation
b. Acculturation
c. Consumerism
d. Globalization

No. 2
When Ana is growing up, she learned the culture of “mano” or kissing the hands
of the elders as one of the signs of respect. What concept does the scenario shows?
a. Enculturation
b. Acculturation
c. Consumerism
d. Globalization

No. 3
It is a kind of a lifestyle characterized by the acquisition of goods and services.
a. Enculturation
b. Acculturation
c. Consumerism
d. Globalization

No. 4
Using this model, organizations focus on employees as a vital part of the operation
and support them in their professional training, health care, education, family
responsibilities, and even spiritual concerns.
a. Corporate Model
b. Organizational Model
c. Humanistic Business Model
d. Personhood Business Model
e.
No. 5
It affects a business’s relationship with almost any type of stakeholder, from
stockholders and employees to customers, the government, and the environment.
a. Religion
b. Ethnicity
c. Philosophy
d. Geography

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GROUP ACTIVITY #03

Instructions:

1. Choose a partner from the class who has an access or has a Netflix account.
2. Watch the movie Whistleblower, and write a reflection paper about its message.
3. Make sure that the reflection paper is compost of its major parts which are the
introduction, body, and conclusion. However, the “body” can have multiple
parts/paragraphs depending on the key points your pair want to reflect on.
4. The class representative shall submit the list of pairs on or before January 10,
2023, 11:59 P.M. (Please use surnames of the members only).
5. Submission of the reflection paper on Team Channel is on January 13, 2023, 11:59
P.M.

GRADING RUBRIC (50%)

Component Points
Content 10
Relevance 10
Organization 10
Overall Impact 10
Originality of the Idea 10
TOTAL 50

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REFERENCES

Byars, S. & Stanberry, K. (2018). Business ethics. OpenStax

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