Question 5

Through Internet research, find and explain a real situation relating to international business in which ethical behavior becomes the key issue in the decision making process.

The selected situation must be a clear example of cultural differences relating to ethical behavior and decision making.


An ethical behaviors refers to doing the right thing in Business, but sometimes its not so easy to do the right thing if you want to succeed or to expand your company, in the case of Pegasus International Inc, is one of the leading manufacturer of integrated circuits and related software for specialty markets of communications and mass storage, as well as PC-based audio, video, and multimedia. They wanted to expand their business to china, but in order to get the license they needed in order to expand to china, they have to do a “payoff” or bribe in every prefecture and they suspected that other companies that entered they Chinese market did pay the bribe, its not uncommon that Chinese takes bribes in from foreign companies that want to expand to this country, here is the part where ethical behavior is considered, its is worth it to lose part f the companies integrity in order to expand to this country, if they pay the bribes in order to get the licenses, they may get 100 million dollars in utilities from that country, but its against the values of Pegasus International Inc, these values are guided by these 4 rules:

• Be Honest With Yourself and Others
• Tell It All and Tell It Like It Is
• Protect Our Intellectual Property
• Face the Facts

In the Chinese culture its normal to pay some bribes in order to get what you want if you are a foreign company that wants to enter that market, but, in the united states its considered as an illegal activity and if an American company makes something that is considered as illegal or unethical, there will be series repercussion in the company image and stocks, it will take a lot of work to recover from such a scandal.

Another case where there is an important cultural difference is Google and China, Google wanted to open a server in china, but in china there are laws that regulates what should be seen and what should not be seen, at the beginning Google and china reached an agreement but later there were tension between both parties because of the censorship that was implemented in the Chinese server, this restriction was different that they were used to, this restriction was not very well accepter because in the other Google servers there was not a tight censorship and the countries in where they were servers where democratic countries, in the Chinese offices they examined the e-mails and web pages to search for cyber terrorist and oppositions against the Chinese government, in you opinion, is this an ethical decision by the Chinese government?

this video is from Dilbert and its about ethics, enjoy.






http://www.businessweek.com/technology/content/mar2010/tc20100324_284005.htm
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/13/AR2010011302908.html
http://www.redherring.com/home/26359
http://www.scu.edu/ethics/dialogue/candc/cases/million.html