Development And Learning In Organizations: Cross Cultural Differences And Business Ethics

Discussion on the cross cultural differences between Australia, India and China

Discuss About The Development And Learning In Organizations?

Ethics and values are extremely important aspects of a successful business. Over the years values and principles have repeatedly emerged as important concepts in the business operations. It is important to mention that most of the organisations in the global market prioritise ethics and values that have been the pillars of their business practice. Values and ethics have been designed to help the business owners to manage business effectively and also make decisions in the best possible way. Ethics from the parlance of philosophy could be defined as the difference between what is right and what is wrong and acting accordingly. In the business operation ethics is important since effective ethical decisions makes a business achieve success[1] (Wild, John J., Kenneth L. Wild, and Jerry CY Han: International business 2014).

The aspect of ethics mainly involves correct and right business behaviors with the different stakeholders which would help to achieve the business objectives effectively. Ethical behaviors and values are important for the organisations and hence it is important to take into account the discussion of ethics and values through the perspective of the different authors. Values play an important role in the practice of ethics. The implementation of values is important in order to make sure that business is practiced ethically and grows ethically. Ethics forms the basic part of business even in the global business environment but there is difference as stated by authors in the way ethics is perceived. (Demuijnck, 2015) states that there is a universality in the use of values in international business ethics whereas Chaney and Martin (2014: 66) that the use of ethics or the standards of business ethics are not universal and might differ in different cultural situation. The present study will take an opportunity to discuss ethics, values and business management in cross cultural environment. The study will critically and reflectively discuss Australian business relationship with Indian and Chinese business culture.

In the last few years the global businesses have significantly and many countries have come together to work and exchange trade. When countries come together to exchange trade there are number of key aspects the come into play. The very first thing that comes into play is the cultural diversity that the companies from the different cultural locations to understand cross cultural business. In the wake of globalisation many Australian firms have started operating in India and China two of the most important markets in Asia. This clearly asks for a strong understanding of the cultural setting of the market which would help to make sure effective cross cultural strategies are developed to do business in cross cultural environment[2] (Ferrell, Odies and John Fraedrich: Business ethics: Ethical decision making & cases 2015).

Business Ethics and Cross cultural relations in business

The increase in trade between Australia and India and Australia and China have increased significantly over the last couple of decades or so which clearly makes it important for the western organisations to learn the cross cultural differences. The business relationship develops with the understanding of cross cultural aspects which is important to connect with people from different cultural background. There is a significant difference between these countries chosen for the essay. Australia is very straightforward when it comes to business. The Australian business culture is a clear and professional and hence the business houses mostly prefer to do business with straightforward strategy and ethics[3] (Ardichvili et al., 2012 cultures in large business organizations in Brazil, Russia, India, and China 415-428). The business culture of Australia is based on sheer professionalism. Most of the businessmen in Australia don’t believe in building relationships for a long time before getting into business relations and they are receptive to new ideas.  The Australian business companies are highly modest and understand their benefits and accordingly make business decisions and hence hate aggressive sales techniques and avoiding self importance.  The cultural difference that is there in their business is punctuality and timing. They are very particular about the timing aspect which also exhibits their professionalism.  The biggest difference in business culture in Australia is the timing of their business hours which basically starts from 8 o’clock and goes till 5. These are the basic cultural features which are found in the Australian business sector [4] (Cavusgil et al, 2014 International business).  

India and China being Asian business market have some similar features like they are more focused on building relationships with each other before business deals are made. Both the markets are highly focused on building business relationships effectively. Both the countries India and China have contributed to the global economy with their market and huge amount of business accommodated in the vast market. The business culture in India is based on building relationships which mainly help the organisations to go ahead for a long term deal. Apart from that it also helps the Indian and Chinese businesses to communicate with their counterparts to eliminate any kind of differences before a contract is signed[5] (Okoro, Ephraim. “Cross-cultural etiquette and communication in global business: Toward a strategic framework for managing corporate expansion.”  2012). The business houses in Asian companies appreciate the foreign businesses and are friendly and professional but the main difference in their business is the approach that they apply. When the Australian businesses do not focus on the relationship building and are highly professional then the Indian and Chinese counterpart focuses on relationship building. The greetings and pleasantry sharing are obviously different in both the countries and this displays their distinct cultures effectively. Even though their traditional cultural system don’t affect business with foreign countries it is important to make sure that cross cultural information are utilised effectively to get the best possible business results.  Language is also different in all the three countries but China and India tend to adapt to countries with whom they get into business relationships. At the professional level relationship building Indian business environment is friendlier whereas Chinese businesses are more formal with the relationships and hence it could be said that understanding of cross cultural relations in business is important for Australian businesses to maintain a strong hold over business in Asian market. Business operations in overseas conditions also need effective implementation of ethics and values and this is where the debate of international standards of ethical practice comes into the action[6] (Griffin et al., 2012 International Business). It is important to discuss whether standard ethical practice is effective to continue operations in culturally different regions and improve cross cultural business relations among countries like India, China and Australia.

There have been significant debates in the corporate world regarding business ethics and their utilisation in the practical field especially during cross cultural business. It can’t be denied that many authors have showed their views some similar to each other while some being distinct in their own ways. Business ethics stands to be extremely important for the organisations since it acts as the mainstay while doing business with organisations. The values that reflect from their business practice mainly show their honesty, integrity, morals and principles. Hence it is important that all the business organisations from the different parts of the world focus on reflecting their business ethics while doing business. The western and Asian business cultures are different and hence there is a strong question of whether the ethical standards of business remain the same with change of geographical boundaries. When naturally a person crosses the boundaries of his or her own nation the understanding of principles and morals often blurs due to the differences in laws and statutes. Often it becomes a problem that shared attitudes and familiar laws ethical practice becomes tough[7] (Crane, Andrew, and Dirk Matten: Business ethics: Managing corporate citizenship and sustainability in the age of globalization. 2016). To speak from the business parlance it could be said that the western businesses are more focused on developing a strong business infrastructure and focus more on aspects like the factors of production and marketing mix whereas the main issues emerge with pervasive factors like culture. Culture and its expectations clearly affect the business practice of the overseas business houses.

Australian organisations are largely influenced by the business ethics of Britain and United States whereas the Asian giants like China and India have followed mixed culture which are based on traditional cultural system and corporate professionalism. Hence it cannot be denied that even in the 21^st century not being able to manage culture could be a huge factor that leads to business failure in the Asian markets[8] ([1] Ho et al.,2012 A global analysis of corporate social performance: The effects of cultural and geographic environments 423-433). From the parlance of philosophy ethics stands to be an extremely important aspect. It is defined as the rules of conduct recognised in respect to a specific human class of action or culture. The Asian markets especially China and India are highly cultural and want others to respect their own culture, traditions which then lead to better relationship building and effective business deals, on the other hand Australia is influenced by US and Britain where mixed reactions could be found when asked about business relationship building [9](Chaney, Lillian, and Jeanette Martin.:  Intercultural business communication 2013). When the US is likely less interested in relationships then the Britain is focused on building relationships. In the last few years the trade of Australia has increased significantly with India and China in the Asian market which has showed that the Australian organisations have started understanding the importance of building relationships[10] (Curtis et al., 2012 A cross-cultural study of the influence of country of origin, justice, power distance, and gender on ethical decision making 5-34).

There are number of aspects that build up cross cultural business relations and ethics have to be put in the parameter list to develop a strong business relation. There are number of cultural factors that come into the picture while discussing about ethical practice in business and its impact on cross cultural business relations. India and China has become a huge marketplace in the global market and almost all the organisations from different regions want to start off their business here not understanding the ethical practices impacts their business practice. From researches it has been found out those executives from China, India and Australia have responded differently to the Geert Hofstede’s cultural dimension. They have acted differently to the ethical dilemmas presented to them[11] (Casmir, Fred: Ethics in intercultural and international communication 2013). The analysis showed that Australia even though influenced by US is extremely particular about individualism index which shows that they are individual minded, the power distance is unequal which means power lies with the rich and they are open to uncertainty which means they are receptive enough to face the uncertain scenario which means they want to avail new options effectively. China is completely different as they believe in equal power distribution, they are highly prudent about uncertainties and they are collective minded which means they want to flourish together not individually. India on the other hand has unequal power distribution with most of the power with the rich, it is clearly and individualistic minded country and definitely wants to experiment which is pretty typical of an emerging economy[12] (Floyd et al., 2013, Ethical outcomes and business ethics: Toward improving business ethics education 753-776).

The cultural conflict that rises in the Asian marketplace are illegal campaign contribution, bribery, selling defective products and other troubling acts. Firstly it is important to sell products with proper country of origin reflecting the origin of the product. In India there have been number of issues with this and even in Australia there have been issues with this aspect. China naturally focuses on this aspect effectively and hence there’s no possibility of illegal activities in China. The type of ethical conflict that rises in business definitely helps to understand the cross cultural relations in business[13] (Gesteland and Richard: Cross-cultural business behavior: a guide for global management 2012). Ethical conflict lies in business decision making as well. The organisational differences also play an important role in the development of cultural differences. When Australian businesses are focused on making decisions with the involvement of the upper management whereas in China business decisions are made involving representatives of different levels of the organisation and in India decisions are made similar to Australian counterparts[14] (Hill et al., 2013).

According to cultural relativism, no culture’s ethics are better than each other but they do differ significantly. The environmental laws in the emerging economies are different and hence this clearly shows that developed nations like Australia wants to trade with Asian markets like China and India.  The business culture definitely plays a significant role in building the relationship between organisations and hence it is important that organisations focus on implementing ethics as it is in the different countries[15] (Trevino, Linda K., and Katherine A. Nelson, 2016, Managing business ethics: Straight talk about how to do it right. 400-413). Ethical relativism cannot be implemented since it is also considered as ethical imperialism. Relativism mainly means applying same ethics in foreign countries but it is not possible and affects business relationships in cross cultural business collaborations. For instance relativism is based on a principle that is absolutism that people will express moral truth on any situation but it is not possible different organisational setting and hence similar ethical practice cannot be implemented in Australia, China and India. Another key aspect which is present in the countries like Australia is wages of the labors[16] (Deresky, Helen.: International management: Managing across borders and cultures, 2017).

In developed countries like Australia low wages is considered unethical but in China and India it is not considered as a huge aspect related to ethics and hence when Australian companies come to work in China and India they also start giving away smaller wages and this clearly shows that they deviate from their own ethical guidelines. Hence it could be said that any company from Australia or China or India trying to work in the western market and vice versa is likely to make a disastrous mistake focusing on absolutism as ethical practices are defined differently in different markets and hence following fixed ethical standard will definitely create problems for the western organisations working in Asian market and Asian companies working in Western market as they would be stricter in the developed markets like in Australia. To conclude it could be said that there is no particular ethical standards that companies could follow while operating overseas and hence universality of ethics and the validity of relativism could be questioned[17] (Bowie, Norman: Business ethics: A Kantian perspective, 2017).

Conclusion

To conclude it could be said that in order to establish an effective business relationship it is important to understand the cultural differences of the market an organisation is expanding in as standard of values in ethics cannot be implemented in culturally different markets. Taking clues from the Australian, Indian and Chinese market it could be said that there is a significant difference in cultural dimensions among these markets and hence implementing ethical relativism or absolutism might backfire and it could become a disastrous mistake for a western organisation willing to establish business relationship with Chinese and Indian market. It is recommended that the organisation should clearly understand the differences in culture and accordingly implement ethical practices in order to practice business effectively[18] (Saunders, Mark: Organizational trust: A cultural perspective, 2012). Overall it could be said that the as per Chaney and Martin it is established that standards of business ethics are not universal and differ in different markets and regions which means it is important to understand culture and accordingly implement ethical practice to get the best possible result from the overseas business operations and build cross cultural business relations.

References

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