Mostof the ethical issues an individual encounters when working abroad occur as aresult of clashing cultural expectations between the home and host countries.These issues can create a dilemma and cause moral lines to blur. Without somebackground knowledge on the shared attitudes and values between countries, andwithout having an understanding of the laws and judicial procedures that definestandards of ethical conduct, certainty in ethical decisions becomes hard toachieve 1.
What works in a company’s home country can fail in a country withdifferent moral and living standards. This report will discuss the ethicaldilemma in regards to the following question: Is it ethical to hire employeesfrom the host country and pay them wages that are considered substandard in thehome country? The thesis of this paper is that, based on a utilitarian point ofview, it is ethical to hire employees from the “developing” host country andpay them wages that are considered substandard in the “developed” home country,however, this action must ensure both sides are getting a fair deal.Whileattempting to examine the proposed ethical question, metaethical concepts, suchas cultural relativism and ethical absolutism will be introduced and explained.In addition, some of the inherent differences between developed and developingcountries will be explained, and the expected societal, moral, and workplaceconducts will be contrasted to emphasize the various conclusions that can beachieved through the analysis of the question.
Finally, the moral theory ofutilitarianism and how its application helps us reach the conclusion of thethesis will be described. Culturalrelativism is the view that moral or ethical systems, which vary from cultureto culture, are all equally valid and no one system is really “better” than anyother. This is based on the idea that there is no ultimate standard of good orevil, so every judgment about right and wrong is a product of society 2.Therefore, any opinion on morality or ethics is subject to the culturalperspective of each person. Applying the popular view of “When in Rome, do asthe Romans do” is tempting for many companies, especially when failing to do asthe locals do means giving up business opportunities of any kind. However, thedeficiencies of the cultural relativism concept become apparent when thepractices in question can have serious consequences for those involved. Forexample, in the early 1990s, a group of investors became interested inrestoring the SS United States, once a luxurious ocean liner.Before the actual restoration could begin, the ship had to be stripped of itsasbestos lining.
A bid from a U.S. company, based on U.S. standards forasbestos removal, priced the job at more than $100 million. A shipyardbased off the newly-independent country of Ukraine, which was in a emergencyeconomic state, offered to do the work for less than $2 million 3, 4. InOctober 1993, the ship was towed to the Ukraine. All countries have the rightto establish their own health and safety regulations, and although the shipyardasserted that it had the experience and facilities to handle the toxicmaterials safely, the standards and the terms of the contract could notpossibly have protected workers from the known health risks.
A culturalrelativist would have no problem with that outcome, but the decision certainlyseems wrong or is at least conflicting with a lot of people’s moral standards.Moreoften than not, people tend to think of respect for local traditions andcultural relativism as the equivalent to one another. That is incorrect as somepractices are clearly wrong. One significant example of erroneous practicesthat lead to fatal consequences can be observed in Union Carbide (India)Limited’s (UCIL) disastrous experience in Bhopal, India.
In a December night ofthe year 1984, a leak of 40 tons of methyl isocyanate (MIC) gas mixed withunknown other gasses occurred, which resulted in 2,000 deaths at around 200,000injured people 5. This was mainly a result of the having the initial,well-trained Indian managing and supervisory staff leave as they pursued moreattractive jobs and replacing each person with less-skilled employees. Thecompany’s executives seriously underestimated how much on-site managementinvolvement was needed at the Bhopal plant to compensate for the country’s poorinfrastructure and regulatory capabilities. Because of this accident, companiesbegan to realize that using sophisticated technology in a developing countrymust only be allowed after evaluating that country’s ability to oversee a safeuse of the technology. Cultural relativism is morally blind and a society thatembraces the notion that there is no ultimate “right” or “wrong” loses theability to make any judgments at all.
There are fundamental values that crosscultures, and companies must uphold them.Atthe other end of the spectrum from cultural relativism is ethical imperialism,which directs people to do everywhere exactly as they do at home. The theorybehind ethical imperialism is absolutism, which is based on three controversialclaims: absolutists believe that there is a single list of truths, that theycan be expressed only with one set of concepts, and that they call for exactlythe same behavior around the world. All of these claims conflict with manypeople’s belief that different cultural traditions must be respected.
In somecultures, loyalty to a community is the foundation of all ethical behavior. TheJapanese, for example, define business ethics in terms of loyalty to theircompanies, their business networks, and their nation. Americans place a highervalue on liberty than on loyalty; the U.S. tradition of rights emphasizesequality, fairness, and individual freedom 6. It is hard to conclude thattruth lies on one side or the other, but an absolutist would have to select onlyone of them.
Whencultures have different standards of ethical behavior and different ways ofhandling unethical behavior, a company that takes an absolutist approach mayfind itself making a disastrous mistake. In an example cited in the “Ethics ofInternational Business” book, a manager at a large U.S. specialty-productscompany in China caught an employee stealing, she followed the company’spractice and turned the employee over to the provincial authorities, whoexecuted him 7. Managers cannot operate in another culture without beingaware of that culture’s attitudes toward ethics.
Ifcompanies can neither adopt a host country’s ethics nor extend the homecountry’s standards, what is the answer? Companies must help managersdistinguish between practices that are merely different and those that are wrong.For example, in Japan, people doing business together often exchange giftskeeping with long-standing Japanese tradition. When U.S. and European companiesstarted doing a lot of business in Japan, many Western business-people thoughtthat the practice of gift giving might be wrong rather than simply different.
To them, accepting a gift felt like accepting a bribe. As Western companieshave become more familiar with Japanese traditions, however, most have come totolerate the practice and to set different limits on gift giving in Japan thanthey do elsewhere. Countriesare categorized according to their economic development. The United Nations classifiescountries as “developed” and “developing”.
A developed country is one that hasa high level of industrial development and bases its economy on technology andmanufacturing instead of agriculture. In addition, the factors of production,such as human and natural resources, are fully utilized resulting in anincrease in production and consumption which leads to a high level of percapita income; a developed country also has a high Human Development Index(HDI) rating, which measures the economic development and GDP of a country, aswell as its education and life expectancy. Finally, a developed country’scitizens enjoy a free and healthy existence. On the other hand, a developingcountry is one that has a low level of industrialization. It has a higher levelof birth and death rates than developed countries.
Its infant mortality rate isalso high due to poor nutrition, shortage of medical services, and littleknowledge on health. The citizens of developing countries have a low to mediumstandard of living because their per capita income is still developing, andtheir technological capacity is still being developed. There is also an unequaldistribution of income in developing countries, and their factors of productionare not fully utilized. Utilitarianismis the philosophical idea that the moral worth of an action is solelydetermined by its contribution to overall utility in maximizing happiness orpleasure among all people affected by this action. This means that choosingaction that has consequences that bring about the greatest happiness for the greatestnumber of people is the most moral thing to do. Based on this theory, one canunderstand why paying low wages to someone in a developing country is ethical,even though the wages are substandard compare to what employees at thedeveloped country are getting paid.
Although paying low wages may be consideredunethical in rich, advanced countries, developing nations may be actingethically if they encourage investment and improve living standards byaccepting low wages. One might consider the difference between wage standardsin 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 oilrig, can the company pay them lower wages than it pays U.S. workers in the someother location? Using the utilitarian point of view, people would argue thatyes, the U.S.
company can pay the Mexican workers lower wages, if thealternative for Mexico is the loss of both the foreign investment and the jobs.Anothersimilar example to this situation comes from the Levi Strauss Company 1. In theearly 1990s, it was discovered that two of its suppliers in Bangladesh wereemploying children under the age of 14, a practice that violated the company’sprinciples but was tolerated in Bangladesh. In this case, the suppliers agreedto pay the children’s regular wages while they attended school and to offereach child a job at age 14. The company also agreed to pay the children’stuition and provide books and uniforms. The company realized that forcing the suppliersto fire the children would not have ensured that the children received aneducation, and it would have caused serious hardship for the families dependingon the children’s wages. The arrangement allowed Levi Strauss to uphold itsprinciples and provide long-term benefits to its host country.
As mentionedbefore, developing countries may accept wage rates that seem inhumane to moreadvanced countries in order to attract investment. As economic conditions in adeveloping country improve, the incidence of that sort of conflict usuallydecreases. Because the companies in the developed world are obtaining theirproducts at a lower cost by paying lower wages to the employees in thedeveloping country, and because the people in the developing country areobtaining the resources they need have a higher quality of life than they wouldwithout having a job, then it can be concluded that, according to theutilitarianism mortal theory, it is ethical to pay lower wages to people indeveloping countries. Voicing and enacting ethical values is about findingcreative ways to reframe issues, while recognizing and respecting the characteristicsof the culture where the company is operating 7. One must be thoughtful ofthese characteristics, as they are what make the culture unique, which bringsdiversity to the engineering solutions that are presented daily.
Respectingdifferences is a crucial ethical practice.