Legal and Ethical Implications of Cross-Cultural Leadership Case

In this module, you will be completing a post-experience write-up. This paper should be about 6 pages long. The purpose of this write-up is to reflect on the experience as specifically related to the concepts in this course: CQ, the components of CQ, and CQ development. It is important to fully describe both your successes and failures at building CQ capacity. The ability to recognize failure can provide valuable insights and growth. If developing one component of CQ is more difficult for you than others, it is not unusual. For example, you may understand cultural differences (cognitive) and be highly motivated to learn to lead in cross-cultural environments (motivation), but find yourself unable to change your leadership style to fit the cultural circumstances (action). Perfection is not the goal of this course—that can take years of practice. What is a more realistic goal is to become more aware of your strengths and weaknesses and make progress toward becoming more culturally competent by building on your strengths and shoring up your weaknesses.Background Information:Universalism vs. ParticularismIn Ethics 501, you learned several different approaches to thinking about and analyzing ethical issues. The models you were exposed to reflect, by and large, a Western approach to ethics. A more multicultural model can be found in considering the difference between Universalist and Particularist approaches to ethics. This typology was developed by Fons Trompenaars and considers the ethical question, “What is more important—rules or relationships?” Read the following synopsis of these two perspectives. As you read, note how these approaches mirror the qualities of individualism/collectivism, high/low context, and monochromic/polychromic time orientations discussed in Modules 2 and 3.Universalism versus Particularism. (n.d.). Retrieved from…Differences in the Concept of Social ResponsibilityAt the very heart of any discussion of social responsibility is the question of why the organization exists. Is it to maximize the financial return to the owners, as many Western business schools teach—or is it to promote the well-being of society, a perspective reflected in the mission statements of many Japanese companies?In the following essay, Kidus Mehalu of Ethiopia considers the role that leaders of multinational corporations might play in balancing the profit motive with the need for addressing worldwide social and economic problems.Mehalu, K. G. (2011). Social responsibility and managerial ethics: A focus on MNC’s, 3rd Global Drucker Forum, Vienna. Retrieved from…Making Ethical ChoicesThough any ethical dilemma can present a leader with difficult choices, resolving cross-cultural ethical dilemmas can seem downright impossible because the moral beliefs and values concerning what is right and wrong may not be the same in both cultures. The question then arises, do we take the position of ethical relativism (deciding what is right or wrong depending on the ethical norms and standards of the culture where the action takes place) or risk being complicit in cultural imperialism (imposing the ethical standards of one’s own society on another which has made different judgments in accordance with the morality of their own culture).To understand more about the relative nature of moral practices across and between cultures, read:Velasquez, M., Andre, C., Shanks, S. J., & Myer, M. J. (2014). Ethical relativism. Markkula Center for Applied Ethics. Retrieved from Are there any ethical standards that cut across all cultures and help leaders make the right choice when societal moral codes conflict? Marc Hauser, a Harvard psychologist, argues for the existence of a moral code that is shared among all human beings, regardless of nationality, political affiliation, religion, race, age, or gender. This does not mean that all humans respond to moral situations in the same way. They will respond within the guidelines of their own social norms. But it does suggest that we will respond to certain moral imperatives following universal underlying principles—such as killing is wrong—though the application of that principle may vary from society to society (for example, laws about death penalties or assisted suicides).Let’s look at an example we are all familiar with—South Africa under apartheid. Many international companies conducted business in South Africa during the apartheid. Most were headquartered in countries that did not tolerate racial discrimination. It is interesting to compare the different strategies employed by these companies when deciding how to interact with a culture where the social discrimination would be considered to be ethically wrong in their own countries.

Examples of Companies

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Individually refuse to abide by apartheid
Refuse to follow rules of apartheid (e.g., integrate factory washrooms)
Polaroid, GM

Collectively refuse to abide by apartheid
Sign a promise to adhere to the “Sullivan Principles”*

125Fortune 500 Companies

Comply with apartheid
Play by the rules

Forced withdrawal
Economic sanctions
89 U.S. firms including IBM, GM, P&G

Stand fast
Protect investment in South Africa
Multiple European firms

Buy up companies at bargain prices
Asian firms

*Companies that signed the Sullivan Principles pledged to:
Express their support for universal human rights, especially for their employees, the communities in which they operate and for the parties with whom they do business.
Promote equal opportunity for their employees at all levels of their company with respect to issues such as color, race, gender, age, ethnicity, or religious beliefs. Also they would not operate with worker treatment that exploits children, includes physical punishment, abuses females, imposes involuntary servitude or incorporates other forms of abuse.
Respect their employees’ voluntary freedom of association.
Compensate their employees enough to enable them to meet their basic needs and provide the opportunity to improve their skill and capability in order to raise their social and economic opportunities.
Provide a safe and healthy workplace, protect human health and the environment and promote sustainable development.
Promote fair competition including respect for intellectual and other property rights and not offer, pay, or accept bribes.
Work with governments and the communities in which the company does business to improve the quality of life in those communities, including their educational, cultural, economic and social well-being. They would also seek to provide training and opportunities for workers from disadvantaged backgrounds.
Promote the application of the Principles by those with whom the company does business.
As this case illustrates, arriving at a common approach to dealing with cross-cultural ethical problems is hard to achieve.Stages of Moral DevelopmentThere are four common rationalizations leaders use to justify unethical behavior.
It is not really immoral/illegal.
I am acting in the best interests of the individual or organization.
It will never be discovered or publicized.
My actions help the organization and therefore the ends justify the means.
These rationalizations stem from Kohlberg’s “Stages of Moral Development.” Kohlberg theorized that individuals progress through various stages of moral development ranging from an immature basis for deciding what is the right thing to do out of a fear of punishment to a fully self-actualized code of ethics based on internalized principles of justice. There is a link to an article on Kohlberg’s model under “Optional Reading” if you care to know more about this model.Some scholars argue that organizations can be characterized by a similar stage model and they make ethical decisions according to the stage of development they have achieved. Read the following article that explains these stages and gives examples of real organizational responses to ethical dilemmas.Reidenbach, R. E., & Robin, D. P. (1991). A conceptual model of corporate moral development. Journal of Business Ethics, 10(4), 273.In order for leaders to set the proper guidelines for making ethical decisions within their organizations, leaders must engage their subordinates in open discussion, without fear of punishment or reprisal. These discussions should be informed by the levels of moral development described in the article above, with the goal of making decisions at the highest level of moral reasoning possible.As stated by INSEAD professor Henri-Claude de Bettignies: The purpose of these discussions and debates is not to impose values or give solutions, but to enhance awareness, to provide frames of reference, to give analytical tools to explore in-depth tradeoffs among short and long-term alternative decisions, to involve individual managers in assessing their own values and paradigms in order to be more lucid and responsible in their own choices. Application: Ethics and NegotiationAn effective way to initiate a discussion at this level is to consider an application of the ethical frameworks we have been considering to a practical activity like negotiation. For an in-depth study of how cross-cultural differences can effect ethical action in negotiations, read the following research article. When reading this article, focus on the Introduction and Conceptual Framework, skim the Research Methods and Results, and focus again on the Discussion and Conclusion.Ma, Z. (2010). The SINS in Business Negotiations: Explore the Cross-Cultural Differences in Business Ethics Between Canada and China. Journal Of Business Ethics, 91, 123–135.ConclusionThere may be certain ethical principles that are universal, as some experts claim. These could include such principles as honesty, integrity, and protection of society. Others are decidedly culture-specific, such as whistle-blowing, bribery and kickbacks, profiteering, social welfare, patent protection, etc. The challenge is to recognize similarities and differences and identify the underlying rationalization (protection of group or protection of the individual). The leader needs to help his or her followers look for ways to resolve the differences through a shared sense of common human values.In the end, the resolution of ethical dilemmas is likely to be culturally determined. Individualist cultures will evaluate moral decisions based on a personal ability to live with the consequences; collectivist cultures will look at whether or not the group can live with them. Low-context cultures will seek to codify legal rules—or at least written ones; high-context cultures will adopt tacit standards shared by members of the society. And universalist cultures will expect ethical standards to apply equally to all; particularist cultures will apply standards depending on who or what is involved.And so we find ourselves coming full circle, wondering if it is ever possible to find a set of ethical principles that will apply to cross-cultural situations where each party operates under different values and assumptions about what is right and what is wrong.

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