This study will discuss about the concept of organization’s social performance and economic performance. Economic performance deals with an organization’s main objective likes profit, revenue and cost while the social performance of an organization is their responsibilities to the society in relation to various ethical values in business. Ethical values are very important in a business. All ethical questions relate to what is right, just, and fair. “Terms like “professional ethics,” “work ethics,” and “business ethics” are misnomers.
The principles we use in the workplace should be the same principles we use in other areas of our lives – they’re just applied to business situations. ” In the present competitive world many organizations focus on their ultimate goal of profit maximization without any consideration of their means to achieving the goals. The impact of globalization creates a lot of opportunities in the business to transcend national boundaries. Many multinational companies have started their operations in other countries. In this backdrop where competition is quite tough, some organizations try to pay bribe for their business existence in the host country.
“MNC bribery takes many forms: direct monetary payoffs to political officials, positions in the enterprise for officials, family members, friends and/or cronies, paid excursions, partnerships, invitations to prestigious universities and scholarships for their children, etc. ” Each country has its own culture and moral values. These principles are highly dependant on that particular country’s economic and social situation. “The major problem of international business ethics is bribery. No single country allows businessmen to offer and government officials to accept bribes for deals.
” Bribery is generally considered a reprehensible offence even in countries where it is alleged to be common. This study relates with BIM, a UK based IT consultancy, and its problem for meeting both the economical and social performance. BIM starts their operations in Nigerian city of Lagos. During the initial times their operation was not successful and they failed to meet their target. After an evaluation of the business environment of Lagos BIM’s sales team finds that payment of commission is very a common practice in that area for any business deals.
BIM decides to follow the common practice of that area for meeting their target. On the other hand, BIM strictly follows ethical values in their business and their code of ethics would consider these commissions to be bribery and, therefore, not allowed. In this situation, the Branch Director finds himself in a dilemma as on one side he has to meet the goal of their branch, and on the other maintain the organization’s culture. Most of the ethical issues in management are apparently simple. “Many business managers said that their companies strictly uphold the principle against any form of bribery.
They would choose to give up commercial contracts if they were asked to pay bribes or “kickbacks” to secure them. ” There is a dichotomous, yes or no choice; which brings in conflict the organization’s economic benefit and their ethical values in business. Ethical decisions are not simple choices between right and wrong. In a case of bribery, it may affect the organization’s value and culture at the same time bribery can also create a bad precedent. “In developed countries, the moral expectations of the host country are as stringent as our own.
With third world host countries, though the moral expectations often more lax, and multinationals are tempted to lower their standards when situations permit. ” Bribery is a common practice in all of the third world countries; especially in bureaucracies most of these countries suffer acute problems of bribery in the areas of education, health and other social welfare sector. Many multinational companies exploit these corrupted officials for their business purposes, selling off lesser quality products and violating the government rules and indulging in other unethical activities with the helps of these corrupted officials.
”Market power is highly dependent on political relations with the state through a series of complex networks of ‘intermediaries’ who negotiate monetary and other payoffs in exchange for a range of highly profitable concessions. ” In this type of business environment an organization can only meet its economical performance by promoting bribery but they will not be able to meet their social performance and they also risk neglecting the social responsibilities.
In the context of BIM, the branch director has two options: the first is to pay the commission and make a good market for his product in that area; but this activity can be create a bad social situation. The second option is to stick to the company’s tradition. The corrupted official can get more chances to earn money and they are ready to agree any types of products sales in that area. They are not bothered about the quality and benefit of product. Social responsibility of an organization is to provide quality product to customers and protect the market from illegal business practices. So the branch manager Mr.
Thomas Harvey wants to follow his organization’s ethical codes against bribery and try to promote legal method of business promotion other wise he would have decided to pay commission and achieve a good business. It is not the part of BIM’s organization’s culture to pay bribe for business interests and it is not a suitable method for BIM’s long term business policy. Any other organization would be able to pay higher commission rather than BIM’s to penetrate the market. In this type of unethical business environment there is no stable growth, all business dealings would depend on the bribery and other illegal activities.
BIM’s business practice is meeting both the economical and social performance their by maintaining their customers’ trust and loyalty in any where in the world with any type of business environment. So in this situation Mr. Thomas Harvey wants to give more priority to the social performance of his organization and therefore avoid unethical business practices. Works Cited What is business ethics? Scribbler’s Ink, copyright © 2005, all rights reserved. http://www. scribblers-ink. com/business_ethics. html (accessed March 13, 2007).
Petras, James. United States. Economic Empire Building: The Centrality of Corruption. http://www. socialistviewpoint. org/janfeb_07/janfeb_07_10. html (accessed March 13, 2007). Global Ethics in Global Economy. Editorial 15th Issue. Hong Kong Ethic Development Center. Ethics in Practice. http://www. icac. org. hk/hkedc/ethics/eip/edc005_e. htm (accessed March 13, 2007). Fieser, James. Business Ethics. Doing Business in Foreign Countries. http://www. utm. edu/staff/jfieser/vita/research/Busbook. htm (accessed March 13, 2007).