When a Multinational Corporation Should Violate or Respect Local Cultural Norms

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Table of Contents

Introduction
Cultural relativism versus universalism
When violation of cultural norms is permissible
When a multinational should respect local cultural norms
Conclusion
Works Cited

Introduction

Workplaces are constantly learning about the importance of cultural diversity and then need to respect it. They also learn about the need to act ethically when a situation calls for it. However, ethical decisions must be based on certain moral standards. Sometimes one’s assessment of the truth, from an ethical perspective, may differ from that of others from a different culture.

Multinational corporations often face these situations and must decide whether to respect or violate cultural norms. Sometimes it is necessary to discern whether difference contributes to diversity or whether it is a violation of moral principles.

Cultural relativism versus universalism

Cultural relativism is a school of thought that claims that morally wrong or right actions are dependent on one’s culture. However, the stance poses a serious problem to multinational corporations. It would seem that institutions, which prescribe to the cultural relativist stance, would not care whether actions conducted within a certain country are right or wrong.

This would be because local cultures determine such values. Such an approach would disengage the multinational corporation from ever making any moral decisions because it would not have a standard against which to evaluate others. Ethicists like Donaldson and DeGeorge agree that cultural relativism is highly problematic to the intercultural player because it prevents him from correcting even deeply disturbing cultural practices like physical abuse (Holmes 152).

Bowie was right in stating that the stance contradicts moral language. Cultural relativism does not account for intercultural disagreements well. It has no room for cultural reformers because one would be right only if they act in accordance to their culture’s prescriptions. These adherents would label anti-slavery reformers as rebels unless they succeed in making their entire societies adhere to their beliefs.

Given these challenges in cultural relativism, it is easy to see why multicultural corporations ought to downplay the theory. On the flipside, one would also argue that ethical universalism would be the other extreme version of moral participation by multinational enterprises. Persons who hold this point of view would claim that all assessments of right and wrong are the same among all human beings.

Critics would state that this thinking is what led to imperialism in different parts of the world. Furthermore, some individuals believe that universalism rests on the premise that western culture is superior to all others (Holmes 148). Therefore, blindly prescribing one’s moral beliefs would be presumptive and overbearing.

For instance, if a multinational corporation went to a country in which people eat frogs or wear free-flowing gowns, the managers’ opinions on these beliefs would be inconsequential to the whereabouts of the moral actors. If they chose to prescribe their opinions on what locals eat, then this would be tantamount to cultural imperialism.

As Donaldson (10) explains, multinational corporations must strike the right balance between ethical judgment and tolerance. A middle ground must be sought when establishing the morality of certain actions. Multinationals must pick their battles by deciding whether a certain ethical violation meets the threshold of intolerability. When a society exceeds that threshold, then a business would be justified to defy those cultural norms.

When violation of cultural norms is permissible

Certain moral principles are indeed universal. Therefore, when a country violates those principles, then a multinational would be acting rationally if it opposed them. DeGeorge (3) explains that a business ought to respect key human values. This implies treating people as human beings rather than ends towards certain means. Additionally, it entails protecting their health or at least keeping them from harm’s way.

The process ought to involve giving these individuals a right to economic involvement. If a certain culture places minimal value on these principles or even abuses them, then a multinational would be justified to defy those norms. One way in which a culture would disregard basic human values would be by treating people as tools. Donaldson (9) cites a good example of Bangladesh, where child labor is acceptable.

Children in this community would have to sacrifice school time in order to work. Most of their families depend on their contributions to meet their daily needs. It may be argued that companies that hire these children are using them as tools. Furthermore, even the parents who forfeit their long term well-being in exchange for short term financial gains may also be seen as exploitative in nature.

A multinational would be justified in opposing this stance by refusing to hire these children, or offering them educational scholarships as they pursue work. Defiance of cultural norms would be understandable because local a disregarding a basic human right that directly concerns the institution.

Some cultures expose their citizens to serious health conditions in order to make a few savings. Europe and North America have strict regulations concerning the handling and manufacture of hazardous chemicals. Sadly, the industrial capital of the world; the Asian continent, does not abide by these principles. It is common for Chinese manufacturers to seek the most cost-effective means of making their products.

Sometimes this involves foregoing vital health and safety regulations. Factory workers may come in contact with toxic chemicals that damage their organs either directly or indirectly. Certain entrepreneurs may fail to purchase goggles, gloves and other protective equipment for their employees. These business owners may justify their actions by claiming that employees violated no laws.

Alternatively, since so many people are desperate for employment, it is understandable why so few of them would question these work conditions. International organizations that enter such countries must be courageous enough to violate these norms. Such an approach contravenes the health rights of its citizens and even puts them in harm’s way. Multinationals can act as voices of reason in such circumstances.

In certain situations, the cultural values of a society may be such that they hurt the long-term viability of a business. In such circumstances, a multinational should be permitted to violate those norms. Donaldson (6) compares software piracy rates between different parts of the world. In the West, these numbers are less than average while, in some Asian countries, even 100% piracy rates are possible.

A multinational working in such areas would be justified to violate these cultural norms by enforcing strict propriety laws. When the culture of piracy continues to thrive, most entrepreneurs may lack the incentive to invest in their businesses. They will not develop new software products as the investment will not yield substantial returns.

Therefore, if a multinational encourages the practice of piracy, it would be placing its own survival at jeopardy. The same may be said of other software companies that operate in such cultures. In cases where local cultures harm no one but place the well being of the industry at risk, multinationals should do the right thing and contravene that norm.

When a multinational should respect local cultural norms

It is sometimes necessary to respect cultural norms when one’s country of origin differs from the host with regard to the level of economic and social advancement (DeGeorge 5). Sometimes certain work policies may be permissible at one time in a country’s history and abandoned at another time. A multinational must ask itself whether a business in its country of origin would do the same thing as the host country, if both countries were under the same level of economic development.

For instance, countries like Angola have a range of multinational miners operating there. Most of them pay their workers marginal rates when compared to their counterparts in the developed world. A person, who does not consider the developmental background of these two regions, would claim that the foreign mining company is exploiting workers by paying them local wages.

However, if one considers the level of development in this country, one would realize that since employment levels are so high and the economic conditions in the country are dire, then it is best to pay them such wages. A multinational following these cultural norms would be respecting local culture because it considers the level of economic development in the country.

Sometimes a country’s level of development has little to do with whether the multinational will respect its cultural norms or not. When matters do not endanger the lives of other people, then a foreign business should consider respecting people’s traditions. Sometimes the source country may ascribe to liberal values, which may clash with conservative values.

Donaldson (6) gives an excellent example of a computer company that tried to transplant its sexual harassment classes from the US to a Saudi Arabian workforce. Individuals in this company did not edit their teachings to cater to the conservative tastes of their employees. In the end, the class offended the participants of the program and they missed the whole point.

Multinational corporations must respect local cultures when dealing with matters of etiquette, gender rules and the like. These traditions are such that they do not harm any individual or the business concerned. Instead of ruffling feathers and causing conflict, a business would be wise to respect this level of diversity.

Sometimes a tradition is so deeply entrenched that it becomes almost impossible to do business without it. For instance, gift-giving is typical in Japan and other Confucian cultures. One must consider the context in which these morally objectionable acts take place.

A westerner would refuse a business gift because he would interpret it as a bribe. However, a Japanese worker would think nothing of it because the gift does not signify anything special. Since the gift has minimal effect on the business bottom line or the wellbeing of workers, then the company should consider respecting it.

Conclusion

Multinationals should violate local cultural norms when those norms contradict basic human principles. If a practice places the health or life of others in danger, then it should be violated. Alternatively, if it undermines the economic viability of an industry, then it should also be infringed.

However, some norms should be tolerated when the level of development matches such practices. Furthermore, if the practice is a deeply-entrenched tradition that has minimal corporate or human rights consequences, then it should be respected

Works Cited

De George, Richard. International business ethics and incipient capitalism: a double standard. 2013. Web.

Donaldson, Thomas. “Values in Tension: Ethics away from Home”. Harvard Business Review 96502.2(1996): 3-12. Print.

Holmes, Robert. Basic moral philosophy. Belmont, CA: Cengage, 2006. Print.

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