Chapter 11

There are truths on this side of the

Pyrenees that are falsehoods on the
other.
-- Blaise Pascal
17th Century philosopher, France

(p. 364)
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The computer is on the dock, it’s raining,
and you have to pay a bribe to get it
picked up and delivered.

-- William Norris
Founder, Control Date Corporation, USA

(p. 364)
3
Opening question:
Pascal and Norris both raise questions about
the absolute nature of truth and ethical
behavior. How can we know what is morally
and ethically correct in international
management, and are there times when we
can or must compromise on our principles?

4
Consider: Halliburton in Nigeria
1. Does Halliburton illustrate an example of an
unethical company or a company trying to
navigate between two different ethical worlds?
2. What could Halliburton have done differently
without losing access to local business
opportunities?
3. Should Halliburton have walked away from this
opportunity if they could not pursue it using
U.S. ethical guidelines?

(p. 364)
5
Topic for today:
Managing in an imperfect world

• Rules of the game

• Bases of cross-cultural conflict
• Ethics, laws, and social control: A model
• Ethical conflicts and challenges
• Institutional conflicts and challenges

6
Rules of the game: Some initial thoughts

• Why is greed and corruption so prevalent around

the globe—including in prosperous nations?
• Are the challenges of managing in ethical and
socially responsible ways getting easier or more
difficult?
• Is it a company’s responsibility to protect the local
environment if the local government fails to do so?
• Should global managers play by local ethical rules
or the rules of their homeland?
(pp. 365-368)
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Sources of cross-cultural conflict

• Acceptance or rejection of different tastes and

preferences.
• Preference for ethical imperatives or legal
requirements.
• Tolerance or intolerance of different beliefs
and values.

(p. 369)
 Sources of cross cultural conflict

Culture A
• Tastes and preferences
• Ethical imperatives versus
legal requirements
• Core beliefs and values
Culture B
• Tastes and preferences
• Ethical imperatives versus
legal requirements
• Core beliefs and values

(p. 369)
Types of conflict: Ethical and institutional

1. Ethical conflicts: Disagreements over what is

morally or philosophically correct (right vs.
wrong)
2. Institutional conflicts: Disagreements over
what is legal or consistent with legitimately
determined public policy (legal vs. illegal).

(pp. 374-375)
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 Normative beliefs, institutional
requirements, and social control

Normative beliefs and values

(ethics, moral philosophy)

Institutional requirements
(laws and regulations)

(p. 374)
1. Ethical conflicts and challenges

Issues:
• Core beliefs: Universalism vs. particularism.
• What is “truth?”
• At what level do we evaluate or try to
understand conflict?

(pp. 375-385)
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Core beliefs: Universalism vs. particularism

Consider:
• Is democracy a universal or particularistic
principle? Why?
• Is gender equality a universal or particularistic
principle? Why?
• Is protecting the environment a universal or
particularistic principle? Why?
• How do you know you are right about this?
Level of understanding of cross-
cultural ethical conflicts

Level 1: Meaning of “universal” values

Level 2: Relationships between principle and practices

Level 3: Ethical conflicts both within and between

organizations

(p. 377)
Universalism, particularism, and
truthfulness

(p. 380)
2. Institutional conflicts and challenges

Laws and guidelines governing ethical and

socially responsible behavior:

• Foreign corrupt practices act (US)

• OECD guidelines (OECD members)

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 OECD Guidelines for
ethical managerial behavior

(see Appendix B)
OECD guidelines

Three examples:
• Bribery and corruption
• Employment relations
• Environmental stewardship

(pp. 387)
18
Corruption index

(p. 388)
Consider:
Is it easy, difficult, or nearly impossible for
managers to consistently act in ethical ways
when working across cultures? Why?

. . . Use force field analysis?

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Force field analysis:
OECD bribery and corruption guidelines

(p. 390)
Consider: China’s consumer market

1. What can a manager do when his or her

sense of ethical responsibility is at odds
with that of both his company and local
market conditions?
2. What would you do in this case?

(p. 390)
Force field analysis:
OECD employment relations guidelines

(p. 392)
Consider: Samsung Electronics

1. How did Samsung and Sony approach

employee relations in Thailand?
2. Why did the two companies take different
approaches?
3. Was there a clear right way to do this?
Why or why not?

(p. 392)
Force field analysis:
OECD environmental stewardship guidelines

(p. 394)
Consider: Tata Motors
1. Do you agree with the way Tata Motors
resolved their conflict with local farmers in
West Bengal?
2. Who were the losers—and who were the
winners—in Tata’s change in plant
locations?

(p. 394-395)
 MANAGER’S NOTEBOOK:
Managing within ethical and
moral constraints
1. Understand the core values of the firm.
2. Understand the limits of universalism.
3. Understand the cultural contexts underlying
agreements.
4. Understand the roles and backgrounds of the parties
to a dispute.
5. Understand the context or basis of the conflict.
6. Understand different types of cultural conflicts.

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 MANAGER’S NOTEBOOK:
Managing within legal and
institutional constraints
1. Understand the role of institutional guidelines.
2. Understand the limitations of institutional guidelines.
3. Understand the controversies underlying institutional
guidelines.
4. Understand the tension created by forces both for
and against “doing the right thing.”
5. Understand where conflicts need to be settled.
6. Understand the lack of education or awareness of
institutional guidelines in the training of managers.

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 Application:
Ethical behavior at work
1. Identify one ethical or moral issue that can be found
in the workplace that your group feels strongly about
(e.g. bribery, nepotism, child labor, sexual
harassment, etc.).
2. What is the basis of your objection to this practice?
3. How do you know your beliefs are correct and
contrary beliefs are wrong?
4. If you find yourself working aboard where this
practice is relatively commonplace, what would you
do as a manager? What would you do as an
individual? Why?

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 Think about it:
Shopping money
You company is currently negotiating with three local
companies to help supply your foreign operations.
During a meeting with your leading candidate, your
host hands you an envelop containing two hundred
euros and suggests you use it to go shopping this
afternoon since his superiors are unavailable to meet
and it’s a sunny day.
1. Is two hundred euros a bribe or a gesture of
friendship?
2. What would accept or reject the envelop? Why?

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