One of the challenges companies face when entering the multicultural, international marketplace is maintaining meaningful and consistent ethical practices.
Businesses that support ethical standards of behavior enjoy better reputations across multiple cultures.
Ethics vary between markets, and they certainly vary between the many diverse cultures found among the many nations and geopolitical subdivisions around the world. One critical ethical element for players in the international space is consistency.
Without some formally defined ethical standard, companies cannot expect their employees to consistently behave in a positive manner. That is not to say that posting the “golden rule” or similar maxims in conference rooms is all that is required.
Ethical considerations impact many business practices. There are the obvious things, such as bribery and corrupt business practices, but there are also discounting, outsourcing, working conditions associated with low-cost labor sourcing, offshore suppliers, natural resource exploitation, as well as many others.
It is difficult for a company to embrace an “ethical” mission statement if those ethics are not applied in every business location and with every business transaction completed. The benefits of supporting environmental issues around Omaha will be completely undone if your company is using exotic woods illegally harvested from an ever-shrinking Amazonian rainforest.
The critical elements for players in the international space are consistency and effectiveness.
Ethical Practices – Where to Start?
Kate Gerasimova spent her early working life in Russia during the waning days of the Soviet Union and the early days of the Russian Federation. She saw firsthand the effects of corrupt and scandalous business behavior as the private sector emerged in this wide-open, economic Wild West, free-market environment.
Gerasimova’s article, GothamCulture.com, “The Critical Role of Ethics and Culture in Business Globalization,” identifies three steps companies must take to ensure their employees understand the organization’s ethical requirements:
- Identify, document and share with all employees a list of specific core values that will serve as a guide for decision-making in the field as well as the boardroom.
- Provide training for employees that helps them question and seek out the cultural knowledge necessary to align decision-making with the stated core values of the organization.
- Build flexibility into these processes that allows employees to use their imaginations to make good decisions that are at once not only aligned with the stated values, but also not handcuffed by doctrinal restrictions.
The last point may make you want to scratch your head. Gerasimova clarifies this later in her article by making the point that being culturally sensitive also means accepting that the “right way” in one country may differ from the “right way” in another.
Applying Digital Technology to Foster Ethical Behavior
While it is easy to post lists of ethical standards in conference rooms and building lobbies, the actual implementation and promulgation of organizational ethical values is somewhat more involved.
Some companies misdirect these efforts by treating them as a PR project with the goal of educating and enlightening the public about how virtuous the company might be.
While it may provide some benefit to the company in terms of image and public perception, the real value is in educating the employees and enabling them to incorporate these values in their day-to-day business practices.
Complex organizations require and use digital technology to automate and enhance all manner of processes necessary to accomplish the business goals of the organization.
ERP systems link up and attach assorted siloes within the organization to ensure the delivery of information and other resources to critical points within the enterprise as needed and when needed. CRM and marketing automation systems provide tools and data related to addressing markets and executing specific plans related to achieving objectives within those markets. CPQ systems provide a three-axis intersection between product, price and message for each product within each specific market addressed by the enterprise.
All three of these systems have the capability of providing positive alignment forces to people, processes and ethical values professed by the organization.
Here are some examples.
ERP and supply chain management systems are ideally positioned to align values related to renewable resources, low-cost labor or exploitative labor environments when identifying sources for assorted raw materials and supply parts. White-list/black-list assignments for supplier partners will ensure that your next batch of widgets was not produced from some non-renewable resource fabricated in a sweatshop.
Your CRM system will maintain large amounts of data related to individuals and companies. How you disseminate that data and who has access to that data should reflect any privacy standard required by law within the context of your ethical values. Sharing information, selling lists of contacts and other exploitative practices should align with your stated position relating to individual privacy.
CPQ systems facilitate automatic discount structures relating to volume purchases and customer status such as GSA or national accounts. Specific messaging used in proposals and sales presentations can also be formalized within the proposal generation capabilities in CPQ. This facilitates the consistent application of standardized discounting, and it eliminates the random “get the order” discount or extension of quid pro quo discounts on a local level by unauthorized persons. Messaging is consistent as well with automatically generated proposals that reflect corporate values.
Businesses that support ethical standards of behavior enjoy better reputations across multiple cultures. This includes cultures that may not necessarily share all of the same values or place the same emphasis on certain values that the businesses profess. The most admired companies in the world do this transparently and effectively.
Technology can help deliver the benefits of maintaining ethical standards worldwide.