Application of Ethical Business in Globalized World


Students are to explore rationales and application of Ethical Business in a Globalized World in detail.Write a 3-page paper on how do US corporations run their business ethically in globalized world? 

Sample paper

Application of Ethical Business in Globalized World

Businesses are operating in an increasingly globalized environment, and more organizational leaders are finding themselves facing serious ethical challenges in the complex international operating environment. While organizations may only experience a few ethical issues in the local environment, managing ethics in a globalized world becomes more complex and difficult. Organizational leaders have to deal with certain ethical issues in foreign nations that may be totally absent in the country of origin. For instance, differences in culture, insufficient regulations, and corruption are just but some of the things that lead to global dilemmas among leaders in globalized environments. This paper is a discussion on how US corporations run their business ethically in a globalized environment.

US corporations run their business ethically by creating a corporate-wide ethical policy to guide their operations. Codes of ethics refer to detailed organizational guidelines that help managers and employees to make the right decisions when facing dilemmas (Nakhle & Davoine, 2016). Codes of ethics help in defining what is legal or what is unacceptable as per the business practices. Codes of ethics have long been used as important tools in controlling employee behavior especially in subsidiaries. According to Nakhle & Davoine (2016), the code of ethics is a concept originally from North America. The North American codes of ethics thus act as the universal rules of behavior in multinational corporations. The internal codes of ethics for American corporations could thus be interpreted as the international business ethics.

Still, corporations often aim at developing and enforcing a global corporate culture. A global corporate culture refers to the application of codes of ethics in a global context (Olaru & Gurgu, 2009). In developing a global corporate culture, an organization not only applies the global principles of ethical conduct but also integrates local culture and policies. The global principles are a reflection of an organization’s corporate culture while adopting to the local policies and culture shows the management’s commitment to respect the local culture. For instance, a corporation’s global culture could prohibit employees from receiving any forms of gifts (Olaru & Gurgu, 2009). However, in certain locations where gifts are a sign of respect and embedded in the local culture, the management may allow the receiving of gifts in such locations.

US corporations run their business ethically through training of employees on ethical conduct (Olaru & Gurgu, 2009). Without training, a corporation cannot achieve ethical conduct from its management or employees. Ethics training is important in instilling an ethical culture among employees. It is only through training that the leadership gets a chance to influence employee behavior as well as their decision-making approaches. It is integral to ensure training of the expatriate organizational leaders and employees. Training helps expatriates in adjusting to the new culture by learning the basics of the new culture (Olaru & Gurgu, 2009). Training enables the expatriates to know how to handle different situations such as the issue of bribery in highly corruption nations. Training helps employees to comply with a corporation’s codes of ethics while transacting on behalf of the corporation.

Another way of running corporations in an ethical manner is compliance to local regulations and laws. It is important for a corporation to comply to the local regulations and laws in order to avoid problems with the law. Each country has a set of unique laws and regulations that guide how businesses operate. Common laws guiding business include antitrust laws, anti-corruption laws, privacy laws, trade laws, and licensing. Antitrust laws are those governing competition practices by businesses. Anti-corruption laws prohibit businesses from issuing bribes and kickbacks. Privacy laws concern data protection needs of a corporation. Trade laws guide businesses in export, import, and general manner of operating. Lastly, a corporation must obtain all relevant trade licenses.

US corporations engage in corporate social responsibility as a way of ensuring ethical business conduct. Corporate social responsibility involves going beyond the profit motive to ensure that the business acts in a responsible manner (Eijsbouts, 2017). Most corporations have elaborate corporate social responsibility programs that help in self-regulation and maintaining ethical conduct. According to Eijsbouts (2017), corporate social responsibility codes enables companies to develop norms, rules, and basic values that guide the behavior of the top management, employees, and even suppliers. Corporate social responsibility means that corporations are mindful of the welfare of the society rather than solely focusing on profitability. This is critical in ensuring that corporations engage in ethical practices.

US corporations run their business ethically by advocating for the observation of international human rights. Respect for human dignity is a critical aspect in organization’s operations. Respect for human dignity or rights calls upon corporations to exercise ethical behavior in different parts of the world. Corporations can show respect for human rights by treating employees well, preventing local environment pollution, and developing safe products for use.

In summary, corporations are operating in an increasingly globalized world. US corporations are able to run their business ethically through various ways. Creating corporate-wide ethical policies helps them in determining what is right or wrong for the employees. A global corporate culture helps in adopting an organization’s practices to the local area culture or policies. Other ways of achieving this include corporate social responsibility programs, employee-training programs, conformance to local laws and regulations, and lastly respect of international human rights.


Eijsbouts, J. (2017). Corporate codes as private co-regulatory instruments in corporate governance and responsibility and their enforcement. Indiana Journal of Global Legal Studies, 24(1), 181-205. doi:10.2979/indjglolegstu.24.1.0181

Nakhle, S. F., & Davoine, E. (2016). Transferring codes of conduct within a multinational firm: The case of lebanon. EuroMed Journal of Business, 11(3), 418.

Olaru, S. D., & Gurgu, E. (2009). Ethics and integrity in multinational companies. Review of International Comparative Management, 10(1): 113 – 121.