Business ethics is the study of business strategies and practices, such as Corporate governance, fraud, bribery, discrimination, social responsibility and fiduciary responsibilities. Business ethics are shaped and guided legislation that can in some cases to provide a base point (e.g. the minimum wage), while fuller set of responsibilities and requirements. The main purpose of business ethics to ensure that trust is established between companies and consumers. Whether a business deals with a partner or a new client, business ethics suggests that the same level of service should be offered.
Business ethics is an important subject when a company decides to expand internationally. Business ethics may vary in many respects across countries and industries. Some companies strive to be the gold standard of business ethics in the industry, while others do the minimum required by law. In the context of globalization of business, it is important for companies to establish policies and practices at national and international level in relation to business ethics.
When a company goes abroad, he often finds that the business practice that would be illegal, or at least frowned upon, the house is often informally allowed or tolerated. In many countries in Latin America, for example, bribes and kickbacks are an integral part of doing business. In some Asian Nations, insider trading is not a crime.
There are two approaches that can be adopted when conducting business in foreign countries. The business can work internationally with the policies and procedures it has developed at home, or she can take their own practice to the norms of each of the foreign countries where it operates.
Creating the same standards in offices around the world, it may be advantageous to ensure compliance across the organization. Management and workers are less likely to engage in risky and illegal behavior, if it is clearly prohibited in written policy and procedures of the company. Companies can ensure compliance with the demand from employees to read and sign your policies and procedures and successfully complete a yearly test.
The second approach is for the company to create various policies and procedures of business ethics in foreign countries. Different countries have different country-specific risks. In some countries child labour is acceptable and normal, but not approved in the United States. If multinational companies have discovered that the use of child labour, it could be a PR nightmare and lead to a decline in sales in the domestic market.
It is important for companies to create their own philosophy of management. Although many people often use a management style and philosophy interchangeably, they are different terms. Your management style, how to manage your labor force, while your philosophy is, why you need to manage your workforce in this way. For example, your management style can be authoritative, but your philosophy may be designed to ensure that everyone follows the rules in a highly regulated industry such as financial services.