Viewpoint -- Global Business Basics

Dec. 21, 2004
Be informed and cautious when dealing with foreign legal systems.

Stealing, human-rights violations, graft, copyright infringement, discriminatory practices, and industrial espionage. All can land you on a legal stand in the U.S. court system. But in other cultures, any of these might be either commonly accepted behaviors -- or crimes punishable by death. What is criminal behavior? In Singapore, it can be something as seemingly trivial as chewing gum. Or in other cultures, it can be something as heinous as forcing women and children to labor over 70 hours a week in guarded compounds. Who is the judge of good vs evil worldwide? When a U.S. citizen leaves home, she or he encounters different cultures, value systems, and legal systems. These cultures often do not adhere to the same "absolutist" or "Manichean" ethics (behaviors that are divided into right or wrong, good or evil) that many of us prescribe to in the United States. Many international judgements are either gray, or totally different, depending upon the circumstances and the people involved. For the moment, let's just focus on one crime: stealing. In his article Values in Tension: Ethics Away From Home (Harvard Business Review, Sept/Oct 1996), Thomas Donaldson described a policy that was standard at home, but was disastrous elsewhere: "A manager of a U.S. specialty-products company in China caught an employee stealing. She followed the company's practice and turned the employee over to the provincial authorities, who executed him. Managers cannot operate in another culture without being aware of that culture's attitudes toward ethics." To us, that was a heinous punishment for a relatively minor criminal act, but in China he was judged based upon their own political, legal, and ethical codes. Another country is well known for taking a severe stand on stealing -- Saudi Arabia. Saudi Arabia is a theocracy, and most Saudis are Sunni Muslims. If the previously mentioned employee had been captured in Saudi Arabia, the punishment would probably have included the removal of the offending appendage. We all know that ignorance of the law is no excuse, here or abroad. But relatively few U.S. firms take the time to research local mores and regulations to protect not only themselves, but the local populace as well. Visitors from other countries can have similar problems interpreting legal and illegal behavior here. For example, copyright infringement, software piracy, and ignoring intellectual property law are acceptable in other locales, and not associated with the sin of "stealing". Hans Koehler, from the Wharton Export Network at the University of Pennsylvania experienced one of these situations several years ago. A student was required to write a paper on doing business with China. When the report was turned in, Herr Koehler considered it to be quite excellent -- good enough to distribute to several local firms. Subsequently he received a call from an organization in Washington, D.C., that asked him about the "study." He explained the process, and asked if the firm would like a copy. The caller responded, "Actually, I'm the legal counsel here, and we wrote it!" When Koehler confronted the Chinese student, he admitted the plagiarism, but seemed puzzled and rather unrepentant. Why? There could be several explanations (besides the obvious one that he just blithely ripped off someone else's work to get a fast "A").

  1. In some countries (i.e., many parts of Africa) -- if a student is writing a report, he works under the assumption that the teacher already knows far more than the student, and would be familiar with virtually any reference work that the student could find on the topic. It would be an insult to the professor if the student kept annotating his sources.
  2. Confucian culture stresses that individuals should share what they create with society. Therefore, not only should the original authors of the research be delighted that their work is incorporated into other materials, but the rights to any research should be freely made available to society as a whole.
This last view can help us understand why software piracy is so endemic in many Asian countries. However, it does not change the economic consequences of ubiquitous plagiarism. If intellectual property rights are not defended globally, software firms must seriously consider how much they want to invest in the new development of products when they will have very little return in large Asian markets. While many cultures believe in some variation of "The Golden Rule", there really is no detailed international standard of business conduct. But at the least, U.S. firms should establish company policies that take into consideration the principles of different cultures. It is clearly a balancing act to develop policies that define the ethics of the corporation, while understanding that codes of conduct vary across the globe. Successful multinational firms (such as IBM Corp., Motorola Inc., Cisco Sytems Inc., and others) not only define their policies, they understand that their managers must be able to adapt to a great deal of moral ambiguity in international assignments.

Terri Morrison is the coauthor of Kiss, Bow or Shake Hands: How to Do Business in Sixty Countries and several other books pertaining to doing business globally. For further information about her books or business -- Getting Through Customs -- phone 610/725-1040, fax 801/516-8774, or email: [email protected].

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