Facilitation or Bribery? - Cultural and Ethical Disparities Each nation has a distinctive culture and consequently distinctive beliefs about what business activities are acceptable or unethical. One of the most ethical issues related to cultural differences is the question of whose values and ethical standards take precedence in negotiations and business transactions. When conducting business outside their own country, should Geletax impose their own values, ethical standards, and even laws on people from other cultures? Or should they adapt to the ethical values, ethical standards and laws of the country in which they are doing business? The company's code of practices differ from its US operations to its operations in other countries such as Lima, Peru; Stockholm, Sweden; Bombay, India; as the district managers in these countries view bribery as a necessary cost of conducting business calling it an established practice.
Several factors help explain why people give or accept bribes. The following table groups these factors into 2 categories: home and host country. Home Country Factors Costs of doing business in certain countries An established practice in certain countries, no other way to get around. Encouragement by Pentagon to buy "influence" to pursue Atlantic Alliance. Pressure from top management to achieve results.
Increasing competition in international markets. Host Country Factors Lure of easy money. Political involvement in decision making. Token of appreciation. Friendly gesture Fair "business" deal Source: F. Friedrich., Business Ethics: ethical decision making and cases, pp. 159 Lima district manager defended his decision to give 'high commissions' by saying, "Look things are different here. We " ve got a job to do" so his reason for giving bribe was that this is an established practice in this country and there is no other way to get around.
He further said, "if the company wants results, we " ve got to get things moving in any way we can" reflecting that he was under pressure from top management to achieve results. District manager in Bombay gave similar reasons when questioned about bribing government officials. The district manager in Sweden defended himself by saying "In Scandinavian culture giving jobs to children is part of doing business' In other words buying 'influence / contacts ' is not unethical. The decisions made by the three district manager's places them in the second stage of Kohlberg's cognitive moral development that is 'The stage of individual instrumental purpose and exchange'. In this stage an individual no longer looks just at specific rules, but evaluates behavior on the basis of its fairness to all.
Bribing is against Geletax code of ethics but distract managers in other countries decided that it would not be fair to apply ethics overseas, which are designed for operating in US. The district managers are behaving like 'Act Utilitarians' who examine the action itself, rather than the rules governing the action, to determine that it will result in the greatest utility. Rules such as 'bribery is wrong's eve only as general guidelines to act utilitarians. In the case study the district manager of Peru would believe that Geletax would not win the contract unless a kickback was paid moreover if the firm does not get a contract, it will have to lay of 100 workers.
The district manager might therefore argue that bribery is justified because saving a hundred jobs creates more utility than obeying a law. Infant Formula in Developing Countries The Nestle case study raises the question - Is it ethical to promote unsafe products or implement advertising campaigns that are untrue or against consumers best interest? The marketing of new products often brings business into conflict with society, especially when the products have moral overtones for certain groups. Nestle advertisements of 'infant formula' crossed the thin line that exists between puffery and deception by its explicit endorsement of bottle-feeding on poorly educated third-world women who live in unsanitary conditions. The unfair and deceptive practices in advertising used by the Nestle Corporation were- 1. Misleading comparisons - that the infant formula is the modern healthy and western way to feed babies 2.
Visual distortion - In the maternity ward of Philippine hospitals there are full colored calendars and posters depicting bright healthy babies next to large cans of nestle 'Lactogen and Pelargon' formulas. 3. False portrayal - nestle hired 'mother craft nurses's een as medical authorities promoting infant formula. When a medical product is advertised on the basis of misleading, incomplete or simply untrue technical information then seemingly simple 'truth in advertising' becomes a moral imperative and ethical principles (if not the law) have been violated. The Nestle Corporation's decision to promote / advertise infant formula in developing countries places them in Kohlberg's first level of moral development where the Nestle company is concerned with its own immediate interests which is to make a profit even at the expense of children's health. The company can be seen as an egoist as when in an ethical decision making situation of whether to market / advertise their product in underdeveloped countries or not, they choose to do so as it contributed most to their self interest of making profits.
A major moral del imma for marketing managers is having to choose a profitable decision over a socially responsible one (A bratt & Sacks 1988). The stakeholder analysis helps marketing managers in these morally questionable situations by identifying stakeholders and understanding effects and consequences of profits and services on their lives. Balancing company profitability with human rights and interests is a moral responsibility of marketers.