Most on the shared attitudes and values between countries,

of the ethical issues an individual encounters when working abroad occur as a
result of clashing cultural expectations between the home and host countries.
These issues can create a dilemma and cause moral lines to blur. Without some
background knowledge on the shared attitudes and values between countries, and
without having an understanding of the laws and judicial procedures that define
standards of ethical conduct, certainty in ethical decisions becomes hard to
achieve 1. What works in a company’s home country can fail in a country with
different moral and living standards. This report will discuss the ethical
dilemma in regards to the following question: Is it ethical to hire employees
from the host country and pay them wages that are considered substandard in the
home country? The thesis of this paper is that, based on a utilitarian point of
view, it is ethical to hire employees from the “developing” host country and
pay them wages that are considered substandard in the “developed” home country,
however, this action must ensure both sides are getting a fair deal.

attempting to examine the proposed ethical question, metaethical concepts, such
as cultural relativism and ethical absolutism will be introduced and explained.
In addition, some of the inherent differences between developed and developing
countries will be explained, and the expected societal, moral, and workplace
conducts will be contrasted to emphasize the various conclusions that can be
achieved through the analysis of the question. Finally, the moral theory of
utilitarianism and how its application helps us reach the conclusion of the
thesis will be described.

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relativism is the view that moral or ethical systems, which vary from culture
to culture, are all equally valid and no one system is really “better” than any
other. This is based on the idea that there is no ultimate standard of good or
evil, so every judgment about right and wrong is a product of society 2.
Therefore, any opinion on morality or ethics is subject to the cultural
perspective of each person. Applying the popular view of “When in Rome, do as
the Romans do” is tempting for many companies, especially when failing to do as
the locals do means giving up business opportunities of any kind. However, the
deficiencies of the cultural relativism concept become apparent when the
practices in question can have serious consequences for those involved. For
example, in the early 1990s, a group of investors became interested in
restoring the SS United States, once a luxurious ocean liner.
Before the actual restoration could begin, the ship had to be stripped of its
asbestos lining. A bid from a U.S. company, based on U.S. standards for
asbestos removal, priced the job at more than $100 million. A shipyard
based off the newly-independent country of Ukraine, which was in a emergency
economic state, offered to do the work for less than $2 million 3, 4. In
October 1993, the ship was towed to the Ukraine. All countries have the right
to establish their own health and safety regulations, and although the shipyard
asserted that it had the experience and facilities to handle the toxic
materials safely, the standards and the terms of the contract could not
possibly have protected workers from the known health risks. A cultural
relativist would have no problem with that outcome, but the decision certainly
seems wrong or is at least conflicting with a lot of people’s moral standards.

often than not, people tend to think of respect for local traditions and
cultural relativism as the equivalent to one another. That is incorrect as some
practices are clearly wrong. One significant example of erroneous practices
that lead to fatal consequences can be observed in Union Carbide (India)
Limited’s (UCIL) disastrous experience in Bhopal, India. In a December night of
the year 1984, a leak of 40 tons of methyl isocyanate (MIC) gas mixed with
unknown other gasses occurred, which resulted in 2,000 deaths at around 200,000
injured people 5. This was mainly a result of the having the initial,
well-trained Indian managing and supervisory staff leave as they pursued more
attractive jobs and replacing each person with less-skilled employees. The
company’s executives seriously underestimated how much on-site management
involvement was needed at the Bhopal plant to compensate for the country’s poor
infrastructure and regulatory capabilities. Because of this accident, companies
began to realize that using sophisticated technology in a developing country
must only be allowed after evaluating that country’s ability to oversee a safe
use of the technology. Cultural relativism is morally blind and a society that
embraces the notion that there is no ultimate “right” or “wrong” loses the
ability to make any judgments at all. There are fundamental values that cross
cultures, and companies must uphold them.

the other end of the spectrum from cultural relativism is ethical imperialism,
which directs people to do everywhere exactly as they do at home. The theory
behind ethical imperialism is absolutism, which is based on three controversial
claims: absolutists believe that there is a single list of truths, that they
can be expressed only with one set of concepts, and that they call for exactly
the same behavior around the world. All of these claims conflict with many
people’s belief that different cultural traditions must be respected. In some
cultures, loyalty to a community is the foundation of all ethical behavior. The
Japanese, for example, define business ethics in terms of loyalty to their
companies, their business networks, and their nation. Americans place a higher
value on liberty than on loyalty; the U.S. tradition of rights emphasizes
equality, fairness, and individual freedom 6. It is hard to conclude that
truth lies on one side or the other, but an absolutist would have to select only
one of them.

cultures have different standards of ethical behavior and different ways of
handling unethical behavior, a company that takes an absolutist approach may
find itself making a disastrous mistake. In an example cited in the “Ethics of
International Business” book, a manager at a large U.S. specialty-products
company in China caught an employee stealing, she followed the company’s
practice and turned the employee over to the provincial authorities, who
executed him 7. Managers cannot operate in another culture without being
aware of that culture’s attitudes toward ethics.

companies can neither adopt a host country’s ethics nor extend the home
country’s standards, what is the answer? Companies must help managers
distinguish between practices that are merely different and those that are wrong.
For example, in Japan, people doing business together often exchange gifts
keeping with long-standing Japanese tradition. When U.S. and European companies
started doing a lot of business in Japan, many Western business-people thought
that the practice of gift giving might be wrong rather than simply different.
To them, accepting a gift felt like accepting a bribe. As Western companies
have become more familiar with Japanese traditions, however, most have come to
tolerate the practice and to set different limits on gift giving in Japan than
they do elsewhere.

are categorized according to their economic development. The United Nations classifies
countries as “developed” and “developing”. A developed country is one that has
a high level of industrial development and bases its economy on technology and
manufacturing instead of agriculture. In addition, the factors of production,
such as human and natural resources, are fully utilized resulting in an
increase in production and consumption which leads to a high level of per
capita income; a developed country also has a high Human Development Index
(HDI) rating, which measures the economic development and GDP of a country, as
well as its education and life expectancy. Finally, a developed country’s
citizens enjoy a free and healthy existence. On the other hand, a developing
country is one that has a low level of industrialization. It has a higher level
of birth and death rates than developed countries. Its infant mortality rate is
also high due to poor nutrition, shortage of medical services, and little
knowledge on health. The citizens of developing countries have a low to medium
standard of living because their per capita income is still developing, and
their technological capacity is still being developed. There is also an unequal
distribution of income in developing countries, and their factors of production
are not fully utilized.

is the philosophical idea that the moral worth of an action is solely
determined by its contribution to overall utility in maximizing happiness or
pleasure among all people affected by this action. This means that choosing
action that has consequences that bring about the greatest happiness for the greatest
number of people is the most moral thing to do. Based on this theory, one can
understand why paying low wages to someone in a developing country is ethical,
even though the wages are substandard compare to what employees at the
developed country are getting paid. Although paying low wages may be considered
unethical in rich, advanced countries, developing nations may be acting
ethically if they encourage investment and improve living standards by
accepting low wages. One might consider the difference between wage standards
in the United States and in Mexico, where citizens accept lower wage payments.
If a U.S. oil company is hiring Mexicans to work on an offshore Mexican oil
rig, can the company pay them lower wages than it pays U.S. workers in the some
other location? Using the utilitarian point of view, people would argue that
yes, the U.S. company can pay the Mexican workers lower wages, if the
alternative for Mexico is the loss of both the foreign investment and the jobs.

similar example to this situation comes from the Levi Strauss Company 1. In the
early 1990s, it was discovered that two of its suppliers in Bangladesh were
employing children under the age of 14, a practice that violated the company’s
principles but was tolerated in Bangladesh. In this case, the suppliers agreed
to pay the children’s regular wages while they attended school and to offer
each child a job at age 14. The company also agreed to pay the children’s
tuition and provide books and uniforms. The company realized that forcing the suppliers
to fire the children would not have ensured that the children received an
education, and it would have caused serious hardship for the families depending
on the children’s wages. The arrangement allowed Levi Strauss to uphold its
principles and provide long-term benefits to its host country.

 As mentioned
before, developing countries may accept wage rates that seem inhumane to more
advanced countries in order to attract investment. As economic conditions in a
developing country improve, the incidence of that sort of conflict usually
decreases. Because the companies in the developed world are obtaining their
products at a lower cost by paying lower wages to the employees in the
developing country, and because the people in the developing country are
obtaining the resources they need have a higher quality of life than they would
without having a job, then it can be concluded that, according to the
utilitarianism mortal theory, it is ethical to pay lower wages to people in
developing countries. Voicing and enacting ethical values is about finding
creative ways to reframe issues, while recognizing and respecting the characteristics
of the culture where the company is operating 7. One must be thoughtful of
these characteristics, as they are what make the culture unique, which brings
diversity to the engineering solutions that are presented daily. Respecting
differences is a crucial ethical practice.