The business ethics climate in Latin America Written by Florien H. International Business Semester 2013 Course: Business Ethics The business ethics climate in Latin America A problem for international companies, taking Peru as an example! The Spanish saying: “El queue no trans no banana. ” (One that doses ‘t act unethical will not proceed), unfortunately describes best the prevailing immoral way of doing business in the Latin American region. Despite various approaches to achieve a mutual acceptance of those values among society, attempts were carried out neither tit economies of scope, nor state support.
The efforts stayed in vain and even were adumbrated by corruptive example and bribery which are still considered as a form of remuneration. Though in Latin America business might follow different moral principles, ethics can be defined as a rigorous analytical business tool which applies least clarify those moral issues which typically arise in business (E. Sternberg; 1995). When going abroad, those distinct ethical values often blur and suddenly are inclined to appear as values in tension.
For Donaldson, the key of acting ethical, when ongoing business outside your country’s borders, is a balancing act somewhere in between “cultural relativism” and “ethical imperialism”, always heeding human values. Considering the first extreme, no culture ‘s ethics is better than any other and accordingly a relativist would always adapt the society’s habits in which he currently operates. However this liberal attitude stumbles once the issue becomes more crucial. A cultural relativist would even accept a business action which violates human values. In 2010 Peru for instance was plagued by a major flooding.
Especially he region around Mach Fichu, an area with a high proportion of tourists was affected. All roads and rails were impassible which neither made it feasible for tourists to leave, nor ensure the steady supply of aids from outside. The reckless business practices and impotence of the government led the shop-, restaurant-, and hotel owners to raise their prices, which compelled many tourists to sleep outside, being robbed, and suffering from hunger (BBC_news). Since cultural relativists would not collide with this business conduct, Donaldson calls them morally blind (Donaldson, 2003, p. 1 16).
The second extreme, an “ethical imperialist”, would always direct the people to proceed as it is common in the home country. Antipathy to this behavior also sounds from the South American world: “This cultural diversity raises very difficult philosophical questions, and some criticize the “ethical imperialism” that they perceive the US and Europe to try to impose on the rest of the world” ( O. Shiplap-Pieta, 1995, A region in transition). The theory behind it is absolutism which entails three core problems: The first challenge is that the different cultures should always be respected although attitudes may differ from country to country.
The second issue describes how people should demonstrate moral truth using only one set of concepts: “We all learn ethics in the context of our particular cultures, and the power in the principles is deeply tied to the way in which they are expressed” (Donaldson, 2003, p. 1 18). Finally, context must always shape practice, believing in a global standard of ethical behavior (Donaldson, 2003). Human values, which Donaldson describes as the minimum ethical standards that must guide manager ‘s actions as a benchmark for all companies (Donaldson, 2003, . 21), always have to be respected and preserved. They include three core values: Firstly, the respect for human dignity by creating and sustaining a corporate culture, like the right for good health offered to every employee. Secondly, the respect, support and protection for basic human rights, like health, education and an adequate standard of living. Finally, good citizenship is essential to support and three serve as a moral compass for all companies, formulating and evaluating standards of an ethical conduct.
Although values, honesty, religion, and respect actually seem to be attractive heartsickness of the Latin American people, the image is besmirched by corruption, fraud, bribery, and the disparity of wealth distribution. “Low ethical standards in the politics have had deep impact on individuals, organizations and the economic system” (M. Radar, 1997, p. L). With an area of about 21 million square kilometers, and an estimated population of more than 590 million people, primarily speaking Spanish and Portuguese, the Roman Catholic dominated zone divides into 19 countries, with Peru being one of it.
Despite a ninety percent proportion of this about religious denomination participating in religious orientated associations like UNIVAC, even Monsignor Oscar Rodriguez, the president of CLAM, the Latin American Bishop ‘s Conference, expressed the church ‘s anxiety about the distressing situation: “Corruption has become a way of life in Latin America” (C. Morsels, 1997, p. 7). The faith in the church ‘s paradigms, especially in integrity “the steadfast adherence to a strict moral or ethical code” (Defenestration. Com) and social responsibility, is regrettably often very distant and betimes leads to dichotomy.
The excessive consumption, materialism and selfishness, prevailing in the relatively small upper layers of society, often clashes with real poverty, caused by a lack of education. According to Radar the aim should be to strengthen the religious formation in order to reach a larger proportion of the population and let their activities be guided by the resulting moral principles. Business desire for short-term gains and a corruptive environment, even practiced by state executives, is not despised as unethical but rather as an acceptable cultural habit.
It seems as if irruption, presumably the most complex problem of the Americas, has struck deep roots through all layers of society (O. Shiplap-Pieta, 1998). Those unsounded economic policies endured and poor governance even made it worse by impairing the establishment of market competition. In 1995 corruption in Argentina, was believed to account for a proportion of 20 billion$ out of the total GAP of 300 billion$ (Ernest Garcia, 1995). Chile officiates as an example for the Latin world, a country which dedicates high importance to the promotion of private companies since the 1980 ‘s.
Those entities advance the responsibility of business ethics, not only among their company, but for the Chilean society as a whole. Oscar Shiplap-Pieta derives two objectives for a sustainable implementation of business ethics in the Latin American society, especially for Peru: First of all, it is extremely important to set high and solid standards of accountability, which go far beyond the minimal legal requirements, currently prevailing. Although clear rules and laws already exist, only a few regions in these countries enforce compliance. Complicity and connivance in equines are so common that in general the South American public profoundly distrusts business and government… Following the lead of many political and business leaders, and acknowledge that many individuals from higher social classes go unpunished, many ordinary citizens of South American countries Justify unethical business ethics programs, especially for transnational companies, need to be implemented. “Ninety percent of all Fortune 500 companies have codes conduct, and seventy percent have statements of vision and values, but don ‘t stick to it in business” (Donaldson, 2003, p. 24). Those can, opposed to the current opinion, offer a win-win situation thus the company will differentiate itself from the competition. Still one has to acknowledge that during the last decades exactly the Latin American region has undergone an impressive process towards democracy and fairness in politics and economics. Peru, the third largest country of South America is now, after a period of turbulence, making remarkable steps towards reforming its current political system and rise in both, the development and confidence in the business sector.
It still holds true, that many business people find it imperative to recover the ultra and religious traditions and especially the young generation reveals a higher interest in fair business practices. Accordingly the number of students participating in ethic courses has been rising constantly (Russo/ SSTГјEagleburger, 2012). Further examples of organized initiatives for a moral renewal are the “OAKS” and its ratified sub-organizations, and a still very active meeting of businessman from all over the world, the “Coax Round Table”.
All are constantly seeking for processes that identify shared values and perspectives on business behavior acceptable to and honored by al (Coax Round Table. Org). Although the attitude towards time is less rigid than in other cultures and Peruvians even distinguish between: “la hoar persona” and “la hoar angles”, Latino in general are known for their warmth and friendliness which they initially express by greeting with hugs and kisses. Muff may even be startled to have a Latin businessman hold your elbow while conversing, or walk down the street arm-in-arm” (blob.
Starchiness; 2012, The Touchy Feeling). Over time they actually care about your personality and try to develop an individual business connection of rust and intimacy. It is essential to understand the culture and adjust your expectations accordingly and soon you will find a very enjoyable place to do business in. In conclusion, Latin America has despite all positive development achieved, still a profound backlog of actually putting the theoretical bases into practice. Struggling with economic problems and corrupt political institutions, it appears difficult to change the founded habits of society.
Examples like Chile and various associations fighting for a solid acceptance of core business values, combined with the honesty, elisions ties, and respect as the most significant properties of the Latin American people, will attract foreign companies respecting core values and promote a sustainable change towards a mutually accepted value system. Business Leaders. Its goal is to promote, in the light of the Christian Social Teachings, a vision and a deployment of Corporate Social Responsibility serving people and the common good of the World. (Univac. Org) the AS uses a four-pronged approach to effectively implement its essential purposes.