Ethical Leadership in the Period of Globalization

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Table of Contents

Introduction
Changing dynamics of global business
Establishing ethical standards
Moral standards
Creating personal and organizational standards of practice
Conclusion
List of References

Introduction

The concept of globalization has led to an increase in cultural diversity across the world as more multinational companies from the developed nations continue to establish business entities in the developing nations. This has led to the need for leaders to understand the ethics and moral standards required by business entities and consumers from different parts of the world. The concept of globalization has further changed consumer behavior, and companies have to adapt to the changing preferences of consumers in the global market. This paper looks at the changing dynamics of global business from the developed to the developing nations. The paper places a close focus on the ethical and moral standards that leaders must develop in their organizations.

Changing dynamics of global business

The rapid changes in the global business have led to a shift in the growth from the developed nations to the developing nations. Many companies across the world have been forced to develop entities in the emerging markets, where the supply chain is affordable, and the availability of raw materials and affordable labor guaranteed. Many companies in different industries have focused on harnessing market share in developing nations because the emerging markets have proved to be lucrative (Cavusgil et al. 2014). The increase in trading activities between nations and the open character of the international markets has made it possible for companies to invest in different parts of the world. One of the requirements for companies to succeed in their respective host nations is the observation of the ethical standards set by the associated societies. The changes in global business have compelled companies to provide training and development programs to help the human assets in embracing the social norms in different nations. It is apparent that the ethical standards embraced by one society are different from the values held by other societies; thus, organizations have been forced to investigate the requirements of the people in their host nations before the establishment of business entities (Poruthiyil 2013).

Establishing ethical standards

The changes in the dynamics of global business have forced companies to embrace different ethical standards while working in different host nations. Most developing nations are yet to develop business policies and ethical standards that can effectively eliminate corruption. Most societies in the emerging markets have developed an interest in observing the commitment of the foreign companies in upholding business ethics. This constant evaluation has compelled most companies to refrain from taking part in corrupt business activities. The current state of global business has a strong link between business ethics and the reputation of an entity (Baskin 2006). The process of establishing ethical standards is an integral part of the task of the leadership in multinational organizations. The process of developing ethical standards for the leadership function entails establishing the required ethics, developing codes of conduct and ethical policies for the organizations and implementing the rules. The development of codes of conduct for the members of the organization should be reinforced with training and development programs to acquaint the employees with desirable behaviors. Organizational policies ensure that its members do not take part in corrupt activities. Ethical standards should be aligned with the social requirements of the people in the emerging markets so to facilitate the development of a CSR program that adds value to the company (Crane & Matten 2010).

Moral standards

The changing dynamics of global business have attracted the challenge of conflicts between business conduct standards between the developed nations and the emerging markets. Naturally, most companies believe that their home standards should prevail because their order is better than in the developing nations. However, global ethics norms dictate that the business entities from the developed economies should observe the moral standards set in the emerging markets (Michaelson 2010). This strategy should be treated as part of the risk management strategy of the multinational companies because it can determine the level of market share that the respective companies can harness in the emerging markets. Leaders in organizations should be charged with the responsibility to ensure the organizational policies set by their companies attain parallelisms with the moral requirements of their host nations (Michalos 2013).

Creating personal and organizational standards of practice

If an organization operates in the developed and emerging markets, the leader of the organization should look at developing different moral standards for the two business entities. The standards should be determined by the requirements of the distinct markets; hence, the leader should implement policies that foster ethical business activities in both markets (McPherson 2013).

Conclusion

The concept of globalization has facilitated faster growth for the developing nations because they are the emerging global markets. Their viability, in terms of business opportunities, has attracted many international business entities. The main challenge in the changing dynamics of global business for most companies is satisfying the ethical requirements of the societies in the emerging markets. Multinational companies should embrace the moral standards developed by the entities in the emerging markets. Organizational leaders should develop operational standards that align with the requirements of their host nations in the emerging markets.

List of References

Baskin, J 2006, ‘Corporate responsibility in emerging markets’, Journal of Corporate Citizenship, vol. 2006, no. 24, pp. 29-47.

Cavusgil, ST, Knight, G, Riesenberger, JR, Rammal, HG & Rose, EL, 2014, International business, Pearson Australia, Melbourne.

Crane, A & Matten, D 2010, Business ethics: Managing corporate citizenship and sustainability in the age of globalization, Oxford University Press, Oxford.

McPherson, D 2013, ‘Vocational virtue ethics: Prospects for a virtue ethic approach to business’, Journal of Business Ethics, vol. 116, no. 2, pp. 283-296.

Michaelson, C 2010, ‘Revisiting the global business ethics question’, Business Ethics Quarterly, vol. 20, no. 2, pp. 237-251.

Michalos, A 2013, ‘The business case for asserting the business case for business ethics’, Journal of Business Ethics, vol. 114, no. 4, pp. 599-606.

Poruthiyil, P 2013, ‘Weaning business ethics from strategic economism: the development ethics perspective’, Journal of Business Ethics, vol. 116, no. 4, pp. 735-749.

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