Ethical business is good business. A global survey by Nielsen reported that 50% of consumers are willing to pay more for goods and services from companies that have implemented programs to give back to society. Consumers think better of the products a firm sells when the organization behaves ethically
Business ethics are rules of conduct that guide actions in the marketplace; these are the standards against which most people in a culture judge what is right and what is wrong, good or bad. These universal values include honesty, trustworthiness, fairness, respect, justice, integrity, concern for others, accountability, and loyalty.
Of course, notions of right and wrong differ among people, organizations, and cultures. Some businesses believe it is OK for salespeople to pull out all the stops to persuade customers to buy, even if this means they mislead them; other firms feel that anything less than total honesty with customers is terribly wrong. Because each culture has its own set of values, beliefs, and customs, companies around the world define ethical business behaviors quite differently. For example, one study found that because of differences in values Mexican firms are less likely to have formal codes of ethics and they are more likely to bribe public officials than are U.S. or Canadian companies. However, because of different attitudes about work and interpersonal relationships, these companies also are more likely to treat lower-level employees better than do their northern neighbors.
These cultural differences certainly influence whether business practices such as bribery are acceptable. Since 1977 the Foreign Corrupt Practices Act makes it illegal for American executives to bribe foreigners to gain business. The Organization for Economic Cooperation and Development (OECD), to which most industrialized countries belong, also outlaws bribery. Still, these practices are common in many countries. In Japan, it’s called kuroi kiri (black mist); in Germany, it’s schmiergeld (grease money), whereas Mexicans refer to la mordida (the bite), the French say pot-de-vin (jug of wine), and Italians speak of the bustarella (little envelope). They’re all talking about baksheesh, the Middle Eastern term for a “tip” to grease the wheels of a transaction.
Giving “gifts” in exchange for getting business from suppliers or customers is acceptable and even expected in many countries. These norms may put American companies at a disadvantage, but you’ve got to play the hand you’re dealt. Rules of business etiquette may dictate that a thank you gift is appropriate, but not if the deal hinges on it.