Ethics Case Study Ethical business behavior can be defined by business leadership. “Generally speaking, an action or choice can be considered ethically correct if it’s honest, fair, supports a beneficial outcome for both parties, and generally enables the overall corporate image and vision” (Definition of Ethics, 2002). In the following we will discuss how economic pressures on China, Jamaica, and America play a role in the ethical decision-making for financial, environmental, and cultural issues. Economic Pressures of China and Jamaica China 1.
Rapid growth of the Chinese economy 2. Emerging into major power status 3. The need to reconcile Confucian and Communist heritage with demands of 21st century business 4. Fueled interest in the process of economic transition and changes in types and methods of decision-making Jamaica 1. Continuing struggle to build economy and infrastructure 2. Capitalist influences are many but lack of development leads to frustration 3. Openness to change and the influence of capitalism 4. Bringing together diverse heritages of the people that do not share similar ethical backgrounds.
The above economic pressures play a role in the decision-making process of financial, environmental, and cultural issues. Based on the study that new technology would give the company a competitive edge but would produce excess air pollutants, Jamaica was more inclined to use the new technology than China and America even though 48. 7% of the country expressed a concern for the environment. China was the least likely to use the new technology with 46. 9% of the country citing it would be illegal but only 18. 4% expressing their concern for the environment. In Jamaica’s concern for rebuilding its economy and its openness to change, it is willing to tolerate more violations of pollution standards than are the other countries” (Fok, 2005). Based on the study of a bicycle company making a payment to a foreign businessman to gain access to his country’s market, only 8. 2% of China cited it was unethical, while 46. 9% cited it being just a price to pay to do business. Based on the study of an auto parts contractor facing bankruptcy if its buyer finds out that a part it sold is defective, 69. % of China stated the company had a responsibility to the public and only 4. 1% citing that causing injury or death are too great to remain silent. “Countries are using utilitarian approaches and are selecting the issues they will support based upon country/economic necessities rather than upon ethical concerns alone” (Fok, 2005). Positive and Normative Economics “Positive economics focuses on cause-and-effect relationships, avoids judgment, tries to establish scientific statements about economic behavior, and deals with what the economy is actually like” (McConnell, 2005, p. 1). The studies done are a reflection of positive economics. A hypothesis was formed, data was collected, and a conclusion was drawn based on scientific tests. “Normative economics incorporates value judgments about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal” (McConnell, 2005, p. 11). Because of Jamaica’s low level of uncertainty avoidance, it embraces change and has a willingness to change whatever related systems have to change for the reforms to be effective.
The Effect of Market Efficiency, Economizing, and the Market System on Ethical Issues “Market Efficiency entitles operating at an optimal point where the marginal benefit of each good is equal to its marginal cost” (McConnell, 2005, p. 33). This variance determines market prices. Sometimes the market will provide great returns on an investment, while other times it will provide above average returns. It is because of this that a country may forgo ethics in order to improve their economic markets. Economizing refers to using or managing scare resources to produce goods and services that satisfy the economic wants of society” (McConnell, 2005, p. 36). Countries must use what resources they have to make better decisions to improve their economy instead of the alternative of forgoing ethics to get what they need. “The market system allows for the private ownership of capital, communicates through prices, and coordinates economic activity through markets, resulting in competition among independently acting buyers and sellers of each product nd resource” (McConnell, 2005, p. 33). Competition forces companies to use a lower cost products and an inexpensive but efficient technique for production. “Economic profits cause efficient industries to expand; losses cause inefficient industries to contract” (Ch. 4, P. 69). Because of the many things that can influence decisions, managers and decision makers need to make well informed decisions based on what will benefit their company, country, and the people in it.
They must perform this task with a high level of ethics, taking into consideration all available information from economic pressures to business principles. References Definition of Ethics. (2002). Received from http://www. more-for-small-business. com. 2011 Voice Marketing Inc. Fok, L. , Hartman, S. , & Kwong, K. (2005, Winter). A study of differences in business ethical Values in mainland China, the U. S. and Jamaica. Review of Business. 26(1). 21-26. Mcconnell, C. , & Brue, S. , (2005). Economics: principles, problems, and policies (16th ed. ). New York: McGraw-Hill.