§ To understand that culture may be local but ethics is

universal.

Learning
Outcome § To be able to state universal norms and appraise if they
are geographically limited by culture.
 Eastern and Western Ethical Thought and
Underst Business Practices

anding § How to reconcile cultural diversity with

the universal ethical principles?
culture § Why understanding cultural diversity and
relativity of the application of the ethical
principles important to business
management?
Cultural
diversity
 Do you think
Global Business
Ethics can be
Question..??
practiced in a
multicultural
world?
 3 Main issues a company face in foreign countries:

qHow to foster a culture of ethical conduct.

International qHow to engage global workforce in adopting

Presence
its corporate values.
qHow to meet the complex legal and
compliance obligations that may exist in all
its locations.
 Culture
§ Culture is the beliefs,
values, mindsets and
practices of a specific
group of people.
§ Culture is learned, we are
not born with culture; we
are born into the culture.
Strategies to
Promote
Ethics in a
multicultural
world
§ Approach of Global Principle
“ Think Globally, Act Locally”
§ Establish a Local presence.
Introduction

§ Thinking mode, value view and behavior rule composes the

distinct character which differentiate one nation from another
nation.
§ Thinking mode exerts a subtle influence on human social lives.
 The main difference between eastern
and western ethics is the fact that
Western Ethics is about finding truth,
whereas Eastern Ethics are very much
about the protocol, and showing of
“A brief about respect.
belief &
Difference”
Eastern ethics is much more about
doing what is right in terms of what is
expected of you by your family, society
and culture.
§ Western Ethics, on the other hand, has more of an emphasis on self
and “Western
what is rationally
Ethics” or logically true.
§ Furthermore, Western Ethics places more emphasis on law and
justice,
§ whereas Eastern Ethics states that one must do what is right and
expected and the universe will take care of the rest.
 Dimensions Western Ethics Eastern Ethics
Protocol and
Focus Finding Truth
Respect
Rational
Basis Religious teachings
“Comparative Thought
Logic, Cause Respect towards
Analysis”
Emphasis
and Effect. family
Approach Rational Holistic and cultural

Good must Good and Bad, Light

Conflict and
triumph over and Dark all exist in
Harmony
Evil equilibrium.
 EXAMPLE ONE:
Cultural diversity
UNDERSTANDING CULTURE
 “Anand in § A small case for Ethics.
Amsterdam”
• Anand Sharma, a garment exporter from Delhi visited
his client Juergen Sorensen in Amsterdam, Holland.

• Upon arrival in Amsterdam, Anand Sharma looked out

frantically at the airport for his client, but to no avail.

• A disappointed Sharma rued the day he had gone to

pickup Sorensen at Delhi airport and had extended him
his home hospitality.
Sharma tried to call Sorensen but there was no response from his office.
He called him on his mobile and got him after several tries.
Sharma told him that he is at the airport; he reminded him that he had
informed him about his business trip which was okayed by him.

Sorenson : Oh, yes indeed, the meeting is scheduled for Monday

morning at 9. I expect you in my office as per the appointment.

Sharma: Well, but ….

Sorensen: It is weekend you know, and I am actually in Aachen

Germany with my girlfriend.

Sharma: I see, but you know that I told you I would arrive today, on
Saturday and …
§ Sorensen: Yes, of course, that is right, and the appointment
is on Monday; so Mr. Sharma,
§ I hope you will have a nice weekend in Amsterdam; it is a
nice and interesting city.
§ I will see you punctually at 9 on Monday. Bye, Mr. Sharma.
§ Sharma was clueless as to what to do. He was first time out of
the country.
§ He had expected Sorensen to return his hospitality. He was
in for a rude shock.
§ His was a small garment business, and he could ill afford to
spend a weekend in an Amsterdam hotel.
He called home. His wife told him to calm down. It is a critical
situation. She told him to use the credit card, without worrying
about the high expenses.

She encouraged him to stay back and conduct the business as

arranged. But Sharma decried his fate and sank in a nearby
chair and vowed never to do business with a foreigner and
contemplated to return immediately.

Just then there sat next to his seat an elderly gentleman who
looked at him and said: You look terribly worried.
The gentleman was so genial Sharma ended up telling him his
predicament.
The gentleman introduced himself as Erik Bergson
and that he is doing business in garment imports from
India for over three decades and that he is just
returning from India after a short trip and that he
regretted he could not select much this time.

Sharma told Bergson that the large suitcases beside

him are samples he brought to show Sorensen, and
that he is not interested to carry them back and again
spend money on extra luggage.
In the car that came to pick up not only Sharma’s garment filled
suitcases were loaded but Bergson had a gentle way that guided
Sharma to the car. No sooner they arrived at Bergson’s house ,
Sharma spread his wares all over the living room carpet.

Bergson was impressed. They struck a deal and Bergson

transferred the advance money right before Sharma’s eyes over
the Internet into the latter’s account .

Despite pleadings from Bergson to stay over for the weekend,

Sharma was so overwhelmed he couldn’t wait to return back
and commence on the new order.
Analysis CULTURE ETHICS (GOOD
NATURED)
§ Culture is…
§ Sorensen did no harm to § Ethics is…
Sharma… § Sharma and Bergson
understood culture as…
§ Then what was the
problem?

§ Can all the knowledge § Does ethics create

about another’s culture opportunity?
help to increase business
What is the principle that
opportunity? underlies all the cultures?
How cultural differences arise?
Why understanding cultural differences important
for business?
§ Do I look for business to function as I plan?
§ When I do business with people from other countries and other cultures
do I have to know all the cultural aspects and attitudes of the people?
§ Do I take other people’s behavior for granted?
What am I
§ Do I take trouble to know how the same business is done differently by
looking
different for…
people of different cultures?
§ Do I prefer highly organized people who function in clockwork precision
or plain good natured people?
§ What prejudices blind my business?
Which kind of theory Utilitarianism has?
a) Ethical
b) Conceptual
c) Behavioral
d) None of the above
The main purpose of business ethics is to establish_________
a) ethical uncertainties
b) ethical principles and concepts
c) application of practices
d) all of the above
Utilitarianism suggests that it is ethical to make decisions based on:
a) Moral virtues
b) Common decency
c) What is best for most people
d) None of the given
WISDOM OF SOCRATES
§ Socrates (the famous philosopher) met an acquaintance
who said, “Do you know what I just heard about your
friend?”

§ Socrates replied, “hold on for a minute, before telling

me anything, I would like you to pass a little test, called
“Triple-Filter” test.

§ The first filter, he explained, is Truth. “Have you made

absolutely sure that what you are about to say is
true?” The man shook his head. “No, I actually just heard
about it, and …”
§ Socrates cut him off. “You don’t know for certain that it is true, then. Lets try
the second filter. Is what you want to say something good or kind?” Again,
the man shook his head. “No! Actually, just the opposite.You see …”
§ Socrates lifted his hand to stop the man speaking. “So you are not certain
that what you want to say is true, and it isn’t good or kind. One filter still
remains, though, so you may yet still tell me. That is Usefulness or Necessity.
Is this information useful or necessary to me?” A little defeated, the man
replied, “No, not really.”
§ “Well, then,” Socrates said, turning on his heel. “If what
you want to say is neither true, nor good or kind, nor
useful or necessary, why do you want to tell it to me at
all?”
Richard and Conway are talking in the hallway about
the employee benefits program. Conway, who has had
some recent financial trouble, explains to Richard how
the benefits program has a loophole that will allow
him to receive some financial assistance that he really
needs to help pay health care costs for his mother.
Cathy, a fellow worker, overhears the conversation.
Later, Cathy is approached by her supervisor who
says he heard a rumor that some people were taking
advantage of the company benefits program.@
Geert Hofstede
Individualis Some societies value the performance of
mv individuals
Collectivis
m For others, it is more important to value
the performance of the team

Has important implications for financial

rewards at work (e.g. individual bonuses
v profit-sharing for bigger groups)
 This considers the extent to which inequality
is tolerated and whether there is a strong
sense of position and status
Power
Distance A high PD score would indicate a national
culture that accepts and encourages
bureaucracy and a high respect for authority
and rank

A lower PD score would suggest a national

culture that encourages flatter organisational
structures & a greater emphasis on personal
responsibility and autonomy
 Concerned with the different emphasis national
cultures have on the time horizons for business
planning, objectives & performance

Some countries place greater emphasis- short-term

Long-term performance (so-called short-termism), with financial
and other rewards biased towards a period of just a few
orientation months or years.

Other countries take a much longer-term perspective,

which is likely to encourage more long-term thinking.

The key implication of this category is the impact on

investment decisions and risk-taking
Masculin Considers the differences in decision-
making style
ity v “masculine” decision making
Femininit approach to a hard-edged, fact-based
and aggressive style decision-making
y "feminine” decision-making approach
involved a much greater degree of
consultation and intuitive analysis
 This category essentially considers the different
attitudes to risk-taking between countries

Uncertain
ty Hofstede looked at the level of anxiety people feel
when in uncertain or unknown situations

Avoidanc Low levels of uncertainty avoidance - a willingness to

e accept more risk, work outside the rules and
embrace change. This might indicate a more
entrepreneurial national culture

Higher levels of uncertainty avoidance - more

support for rules, data, clarity of roles and
responsibilities etc. These cultures might be less
entrepreneurial as a consequence
 Indulgence stands for a society that
allows relatively free gratification of
basic and natural human drives
Indulgen related to enjoying life and having
fun
ce vs
Restraint Restraint stands for a society that
suppresses gratification of needs
and regulates it by means of strict
social norms
1.Which statement is true?
a.Culture is beliefs, values, mindsets and practices of a
specific group of people
b.We are born with culture
c.Both a and b
d.None of these
2. Culture consists of ______
a.Customs
b.Religious beliefs
c.Both a and b
d.None of these
3. Which of the following is/are ethical values?
a.Etiquettes
b.Good manners
c.Both a and b
d.None of these
5. Long Term Orientation
Long-Term Orientation is the fifth dimension of
Hofstede which was added after the original four to
try to distinguish the difference in thinking between
the East and West.
Contd…
—Long term orientation
-persistence
-ordering relationships by status and observing this
order
-thrift
§Short term orientation
-personal steadiness and stability
-protecting your ‘face’
Contd..or tradition
-respect
-reciprocation of greetings, favours,
and gifts
• Jennie was recently hired to work as a
receptionist for the front lobby. As
receptionist, she is responsible for making
copies for the associates. Her son, Bruce,
comes in and needs some copies for a
school project.

• He brought his own paper and needs 300

copies for his class. If he doesn’t bring the
copies with him, he will fail the project. The
company copier does not require a security
key nor do they keep track of copies made
by departments.
1.Identify the ethical issue or problem.
2.List the facts that have the most bearing on the
decision.
3.Identify anyone who might be affected by your
decision and how.
4. Explain what each affected person would want you to do about the
issue.

5. List three alternative actions and identify the best and worst case
scenario for each alternative, anyone who would be harmed by this
choice (and how), any values that would be compromised by selecting
this alternative, and any automatic reasons why this alternative should
not be selected (legal issues, rules, etc.).

6. Determine a course of action.

1.Which statement is true?
a.Culture is beliefs, values, mindsets and
practices of a specific group of people
b.We are born with culture
c.Both a and b
d.None of these
2. Culture consists of ______
a.Customs
b.Religious beliefs
c.Both a and b
d.None of these
3. Which of the following is/are ethical
values?
a.Etiquettes
b.Good manners
c.Both a and b
d.None of these
 Global fans and Local Fanatics.

People migrating from east to the west.

“Eastern & Western

The world is a much traversed planet, and yet there
Ethical Thought & are serious cultural differences among the nations.
Business Practices”
Trade barriers, taxes, and tariffs that hinder fair
trade practices.

“Whether it is possible to have global business

ethics practices in a multicultural world, much
unified and yet divided.
 § Cultural Values: Culture shapes our values.

Universal § Cultures are confined to territories, each

culture center develop their own ethos.
Norms and
§ Manners- indicator of Values- Ethical
Geographically values get translated into good manners.
different § European wedding- Kurta pyjama-
cultures considered as being rude.
§ If European tourist visit Indian temple with
their shoes on- Hurts the religious
sentiments.
 Universal Norms and
Geographically different
cultures
§ One Humanity, Many values- The aim of
every human action is to be good.

§ Bring out the complexities of relationship

and choices what people has to make.
§ Manners: Truth is accepted beyond
boundaries.
§ Universal vs particular value- Distinction
between universal principles and particular
values.

§ Problem-When we universalize our

particular values as universal principles.
 “Universal Vs Particular values”

§ “ Problems arise when we universalize our particular values as universal

principles”.
§ One cannot hold a good person down, irrespective of territorial
boundaries.
§ We- Particular instances-Exclusive cultures- Pursue definite interests.
§ Dreadful disagreements and even wars.
§ Honesty is our Principle.
 § Drift from Individual or material instances – General or formal
concept. (Socratic method)

§ Outraged when corrupt corporations get away lightly for their

misdeeds.
“Nature of § Theory & Practice- just by studying one cannot be the

Values” “one”

§ Dedication.
§ Learning universal principles of ethics, one does not become
a moral hero.

§ Mahatma Gandhi.
 § Western models
§ Eastern values not helpful for western business.
§ Modern business management is a western
development and has been adopted successfully
“Suitability of by the rest of the world.

Eastern Values § Western Business- Utilitarianism. “ The greatest

happiness of the greatest number”.
to Western § Eastern Values: Eastern values are really
Business” successful when applied to western business
models.
§ Indian expatriate succeed so quickly in abroad.
§ Karuna- Compassion.
 § Individual’s personal interest clashes with social interest.
§ Look for the family or bigger good “ Look for the country”.
§ Socialist revolution from the west shock the foundations of
“Social Indian Society.

Dilemma” § MNC’s are striving to see a common ground.

§ American food chains in India have adapted to the Indian
palate.
Quiz
1.Which statement is not correct?
a.People all over the world easily adopt the successful
Eastern and Western business models.
b.There are normative principles that have universal
applicability, such as truth, goodness, compassion, etc.
c.Both a and b
d.None of these
2. Which of the following are normative principles
with universal applicability?
a.Truth
b.Goodness
c.Compassion
d.All of these
3. According to Hofstede, there are four dimensions of
difference between national cultures. Which of the following
is not one of the dimensions Hofstede studied?
a.Uncertainty avoidance
b.Power distance
c.Masculinity
d.Paradoxicality
A highly successful company of Denmark acquired
a distressed company of Brazil. This acquisition
resulted in the “new” company which is located in
Brazil only. There were many differences in these
two companies including HR practices, markets
served and leadership philosophies. The CEO
quickly saw the issues and brought us in to help.
Apply Hofstede model and give a solution to CEO.
PDI the following
Looking into MFI ICI
chart. UCA LTO
Denmark 20 40 50 40 90
Brazil 70 80 90 80 30
 § Caste System: It seems Indian Values are hindrance to
business practices.

“DO Indian § Indian caste system.

Values Hinder § Sellers of souls for profit.

§ Negative Image: Ranbaxy rejected consignment by USA.
Business” § Indians in general, and their businesses in particular, as being
dishonest, corrupt, substandard, unprofessional, and having
no value for time.
 § Social, cultural and historical reasons for the deterioration of
the Indian businessman’s character.

§ Indian Businessman successful in west- moral values.

“Augmentation § India- Patience, west- procrastination and laziness.
of Values” § Spirituality
§ Indian values and western business models are the right
ingredients for a successful and value-based business
management
 § “Conflicts originate when people’s view differ”.
§ No one objects to clothing that is modest.
“Clash of § Problems arise when a piece of clothing offends the
Culture” sentiments of the people because it conflicts with their
culture.
 § Western culture- “Go for your life”, “God help
those who help themselves”, “ If at 1st you
don’t succeed, try again”, “ Winner takes all”.

§ Eastern Culture- “ Don’t rock the boat”, “ Go

with the flow”, “You take what life gives you”,
“Be aware of “we’re in this together”, “We work to live”.

your
surrounding”
 In any business travel, arrange to have business cards
printed in English and the local language on the other
side.

Present your card before asking for other card.

“Business Card”
Hold card with both hands so they can read your name
not the other way around.

If presenting yourself to more than one person, be sure

to start with the highest rank downwards.

Never put card in wallet or pocket and considered

impolite or ignorant to look at the card for too long.

Always bow/nod when handing and receiving business

cards.
 vEAST:
§ Internal self control, Hierarchy, Modesty, Harmony,
Saving face, Time is life, Respect for status, Sharing,
Being.
“Difference vWest
EAST/WEST” § External control, Individual, equality, Achievement,
Time is money, Fact oriented, Value Privacy,
Open, Selfish, Control, Short term Oriented, Direct,
Independent, Doing.
 v Values:
§ Asian- Group, Trust, Compromise, Flexible.
§ Western- Individualistic, stick to rules, Confront,
Reasoning.
vManagement Style:

ASIAN vs § Asian- Relationship, Flexible, Adaptive,

Understanding.
Western § Western-Rational, Structured, Directive, Doing.
vOrganization:
§ Asian- Informal, “Jack of all” Trades, Integrated,
co-operative
§ Western- Formal, “Master of none”, Fragmented,
Competitive
1.According to Hofstede, national cultures such as
Singapore, Hong Kong, and Sweden, in which people are
more accepting of innovative ideas and eccentric or
deviant behavior, are which of the following?

a.High in uncertainty avoidance

b.Low in uncertainty avoidance
c.More masculine
d.High power distance
2. Western management style is:
a.Rational
b.Structured
c.Directive
d.All of these
3. Masculine trait(s) is/are:
a.Assertiveness
b.Strength
c.Both a and b
d.None of these
 — Conflicts originate when people’s views differ.
For example: 1. France has forbidden religious
symbols like crosses, Islamic garments, and
turbans in schools.
2. The Sikhs face a problem because they cannot
Clash of wear helmet over their turbans while driving 2-
Cultures wheelers. So, in the West, the Sikhs have to fight
for their religious right to wear the turban.
So in order to avoid these ambiguous situations.
People should have peaceful discussions and find
suitable solutions to the conflicts.
Work Culture in
US vs. India.
 — The Work Culture in America, most of the
people in America tend to work only 8 hours a
day. Typically, they work from 8 AM to 4:30 PM or
early. It is common to take 30 min lunch break.
Some eat at desk and some just grab a quick
lunch. When it comes to importance of work,
people consider work as just work and not LIFE.
Work Culture in US vs. — With few exceptions, they do not worry about
India, Time at work, work after they go home or even work on
Importance of Work ? weekends doing work. It is just way the culture
is…Work is just part of life and NOT life.
— As per ethics, most people tend to have good
work ethic, they work when supposed to work and
get their job done on time. Deadlines are critical
part, you should never miss any
deadlines…being on time is important.
 — Unlike in India employees working in IT, they go to work at
9 AM or so and come home at 9 PM. Most of them stay at
work for 12 hrs. It is not necessarily working for
12hrs…there is a difference…people take long lunches,
tea breaks, other breaks….The reality is, because most of
the software engineers are single, they tend to stay at
work….but as life progresses and you become senior and
become manager, you may come home a little early…
People work late hours, they sometime work on weekends.

India
— Unfortunately, Work is viewed as the thing in Life trying to
succeed and get promotion or anything like that…There is
nothing wrong with it…it is just the culture that shapes the
environment….work ethic is more relaxed, you just work
long hours and spread it over….deadlines are important,
but people tend to negotiate with boss, being on time is
important, but not strictly followed.
— These are just some differences and constantly changing
as east is adopting west.
 — Lets do math here, 1/3rd ( 8 hrs) of your life is tied to work and if
you are young and living in India and working in IT, then your life
is tied more than that it is almost 50% more ( 8 + 4 hrs) than
what you would spend in US.
— Although, east is embracing west and we are trying to adapt

Decision
many things, still the differences remain. Unless you are in a big
managerial role and be able to work flexible hours, India is a

about work questionable choice in this aspect…think logically, so much of

your productive time in productive years of your life (22 – 32 or

life for Settling so) is just spent at work or doing work.

in US vs. India
— Unless you get flexible hours and have an option to work only 8
hrs a day, it is not a great choice to move to India from work
perspective …. Hoping that things will change in India as time
progresses …but for now, this is how it looks.

What do you think about just this aspect of work Culture ?

 Suitability of § Eastern values will not be helpful for Western Businesses
because history proves that modern business management is
Eastern values a western development and has been successfully

to Western implemented all over the world.

Business
§ Western Business is based on theory of “Utilitarianism”. The
theory states ‘the greatest happiness of the greatest number’.
 § When travelling to non-English speaking countries, gestures
is what we think we can rely on. This assumption, though, is
not true and gestures that are generally considered
acceptable in our culture and country might actually be
Gestures offensive somewhere else.

§ For Eg: In most cultures nodding your head up and down is

considered a ‘yes’ and shaking it side to side is considered
‘no’. But we Indians also say ‘yes’ by tilting our head side to
side.
 Contd..

— Also if you are in the Middle East it will be a

good idea to keep in mind that a nod down
means yes while a nod up is considered a
gesture of disagreement, and if you are in
Japan and see a person nodding it just
means they are listening to you and doesn’t
mean they are agreeing to anything.
— Another widely used gesticulation is the
‘thumbs up’, which is considered a sign of
agreement or means ‘it’s good’, but in some
countries this sign is considered an offence.
So if you are in Australia or Iran, avoid
giving the ‘thumbs up’ sign.
 — While in India we touch our palms in the Namaste
stance when we meet someone, the general
greeting all over the world is shaking hands.
— But the French greet each other by hugging and
giving a kiss on each cheek, which might feel very
awkward and weird to someone from outside the
Gestures country.
— The Japanese on the other bow in greeting.
— The whole world has the same expressions for
anger, sadness, pleasure, happiness.
— So when in doubt, just smile and that will be the
safest beginning of a conversation anywhere in
the world!