Ch. 4 Provide by Dana
Compare and contrast ethical relativism and ethical universalism. What are some of the dangers of adopting either ethical relativism or ethical universalism when making decisions?
Ø Ethical relativism means that each society’s view of ethics must be considered legitimate and ethical.
o If in one country a belief or action is considered to be morally wrong, then in that country it is wrong but in another country that same belief or action is considered morally correct.
o Multinational managers need only follow local ethical conventions. For example, if bribery is accepted in host country, manager would follow what is morally acceptable even if it is illegal at home.
§ Example: In Chinese culture, guanxis (special relationships between Chinese companies that create business networks). Companies in guanxis are bound by reciprocal obligations, preferential treatments to other members within same network. To the Chinese, guanxis are imperative to doing business but ethical universalism would find gaunxis to be unethical because they violate transparency norms.
Ø Ethical universalism holds that there are basic moral principles that transcend cultural and national boundaries. Universalism is the opposite of ethical relativism.
o For example, all countries have rules that prohibit murder, at least of their own people
Ø The difficulty for using moral universalism as a guide for multinational business practices is that there is little agreement on which moral principles exist in all cultures
o Even when the same principles are used, there is no guarantee that the way the principles are followed is the same in all societies
§ Example: even though two countries forbid murder, in a cultural with restricted food and water resources, the aged may be asked to commit suicide or new born baby girls may be killed to control population
Ø Practical problems for following either ethical relativism or moral universalism
o Ethical relativism can become “convenient relativism.” – occurs when companies use the logic of ethical relativism to behave any way they please using the excuse of differences in cultures
§ Donaldson argues that multinational companies have a higher moral responsibility than ethical relativism
§ Example: Child labor in developing countries, children as young as seven years old are working producing products for multinational companies
o Extreme moral universalism also has it pitfalls
o The assumption that one can identify universal ethics that all people should follow can lead to ethnocentrism and what Donaldson calls cultural imperialism
§ Managers who assume that they know the correct and ethical ways of behaving can easily view the moral systems of foreign cultures as inferior or immoral, which can be dangerous due to the money and power multinational companies can wield in developing cultures.
Do you impose your own country’s ethical system everywhere you do business or do you follow the maxim, “When in Rome, do as Romans do”.


Heidi's Response

Compare and contrast ethical relativism and ethical universalism.
What ethical system should an organization use—your own country’s or that of the host country?
Ethical relativism: Theory that each society’s view of ethics must be considered legitimate and ethical. This implies that when doing business I a country managers need only follow local ethical conventions.
Ethical Universalism: Theory that there are basic moral principles that transcend cultural and national boundaries. The difficulty in using ethical universalism as a guide for MN business practices is that there is little agreement on which moral principles exist in all cultures, nor is there a guarantee that all societies use the principles in the same way.

What are some of the dangers of adopting either ethical relativism or ethical universalism when making decisions?
  • Ethical relativism dictates following local ethical conventions, therefore, if a country accepts bribery as a legitimate way of conducting business, then it is okay for a multinational manager to follow local examples, even if it would be illegal at home.
  • Extreme, ethical relativism can become convenient relativism which occurs when companies use this logic to behave anyway that they please, using the excuse of differences in cultures (child labor practices).
  • Extreme moral universalism also has its pitfalls. The assumption that one can identify universal ethics that all people should follow can lead to a type of ethnocentrism called cultural imperialism. That is, managers who assume that they know the correct and ethical ways of behaving can easily view the moral systems of foreign cultures as inferior or immoral. This is particularly dangerous when the MN is a big and financially powerful company with subsidiaries located in the developing world.