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What Is Involved in International Business Ethics?

Esther Ejim
By
Updated May 17, 2024
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International business ethics is a term that refers to the application of ethics in the conduct of business on the international scene. The concept of ethics in general is one that is largely founded on a bedrock of moral principles and integrity as opposed to commercial law or labor law. This is mainly due to the fact that ethical considerations with regard to international business are mostly universal since most of the ethical principles are applicable in different countries, unlike business law, which is generally more individual. Even though international business ethics have a lot of similarities, there are still some points of variation due to the application of the tenets of different belief systems as well as cultural and religious considerations.

One of the general rules of international business ethics is for business men and women to try as much as possible to apply an acceptable moral code when conducting business overseas. A good illustration of applying basic morality in order to practice international business ethics can be seen in the area of child labor, since the practice might be illegal in certain countries and allowed in others. For this reason, the management of organizations from countries that do not allow this practice might purposefully go to another country where it is allowed for the sole purpose of taking advantage of the cheap child labor. In this situation, the management of the business knows that not only is child labor reprehensible ethically, but also that such a practice would lead to possible jail terms and the closure of the company in its home country. Here, it is clear to see that the application of international business ethics is lacking, even if the act is not strictly illegal.

Scenarios for the application of international business ethics abound and are often encountered by those who engage in international business. For example, assuming a customer in a country orders some goods from a manufacturer located in another country, ethical considerations require such a manufacturer to keep to the terms of the agreement between he or she and the consumer. As such, if the consumer orders a stated number of expensive televisions and the manufacturer tries to shortchange the customer by using inferior components to make the televisions, clearly the manufacturer has violated the norms of international business ethics. In this case, the violation of ethics has a legal implication since the customer can sue the manufacturer at the receipt of the substandard television.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Esther Ejim
By Esther Ejim
Esther Ejim, a visionary leader and humanitarian, uses her writing to promote positive change. As the founder and executive director of a charitable organization, she actively encourages the well-being of vulnerable populations through her compelling storytelling. Esther's writing draws from her diverse leadership roles, business experiences, and educational background, helping her to create impactful content.
Discussion Comments
By SteamLouis — On Jul 17, 2014

International business such as shopping from other countries can be a problem. I had several bad experiences where I was cheated by sellers. There were missing items and items with problems.

By ysmina — On Jul 16, 2014

@fify-- I don't think it's difficult to say what is right in this situation. It's obvious that it's wrong to use child labor, just as it is wrong to overwork employees or pay them lower rates because they can get away with it.

I recommend you to read various ethics theories. Ethics is a universal concept as the article said and it depends on the action not the result. It doesn't matter if an action will cause a business to succeed and maintain its position in a market. Regardless of whether the end result is good or bad, an action is wrong if it's unethical. There is just no justification for it.

By fify — On Jul 16, 2014

I remember when it was discovered by the public that some of the best known American multi-national corporations take advantage of child labor in some countries. It was appalling to Americans that their shoes or their electronics were made by over-worked, underpaid children in less developed areas of the world.

International business ethics was an issue before this but it became a great concern after this realization. I personally think that this is partly due to the global economy. Competition in the global economy has increased because of developing nations that have entered the market. They can produce goods at lower costs which endangers American businesses that have trouble competing. So in order to compete and not lose business, some American businesses are engaging in unethical practices like child labor. It's difficult to say in this situation what is exactly right.

Esther Ejim
Esther Ejim
Esther Ejim, a visionary leader and humanitarian, uses her writing to promote positive change. As the founder and...
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