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In a global economy, companies increasingly operate and travelers increasingly visit diverse social and cultural environments that create many ethical conflicts. Conflicts arise when foreign companies or tourists are confronted with local norms and behaviors, and fail to take into consideration the complexity of cultural values or religious traditions and beliefs of the host country, and vice versa. For example, as reported by the “Financial Times” in 2005, a conflict arose when the US fast food giant, McDonald decided to enter the Indian market, counting on its ‘‘fast food global formula’’: cooking French fries in beef fat and selling beef burgers without realising that almost 1 billion of the Indian Hindu population worship cows as holy creatures. Thus, what is an ethical practice in the foreign country may not be ethical in the host country.
When two or more practices conflict and there is no clear right or wrong, this is the moment when cross-cultural conflicts turn into dilemmas. Different research studies outlined that the main ethical dilemmas that have direct relevance to the tourism and hospitality industry are bribery and corruption, gender and racial discrimination, sexual harassment, exploitation of child labor, child sexual harassment, violation of human rights, harming natural resources, selling of unhealthy food, false and misleading advertising, nepotism, and even software piracy.
Bribery is remuneration for the performance of an act that is inconsistent with the work contract or the nature of the work one has been hired to perform. Bribery is not universally accepted as an illegal, immoral, or unethical business practice. In fact, bribery is sometimes the only way of doing business in certain cultures. Bribery is a common ethical business practice not only in the developing nations of Asia, Africa, and the Middle East, but also in the developed countries.
In their 1987 published book, Donald Becker and Hans Fritzsche stated that German managers often consider bribery a necessity – the price of doing business – whereas American managers view such behavior as illegal, unethical, and against company policy. They noted that in France, Belgium, Greece, Germany, and Luxembourg, deducting foreign bribes as business expense is a legal practice. However, American executives can be prosecuted within the United States if they are found guilty of bribery in another country.
As it is obvious, corruption is the misuse of authority for personal gain, which need not be monetary. Corruption includes bribery, nepotism, extortion, dishonestly appropriating goods, usually money, by one to whom the money has been entrusted (embezzlement), and utilization of resources and facilities which do not belong to the individual for his own private purposes. While many Asian countries consider corruption a necessity for conducting business, American executives see such behaviour as unethical and illegal. Despite such an outlook, both bribery and corruption are common in the US.
One of the areas in which individualistic and collectivistic nations differ most is that of gender equality. There is still discrimination between women and men in terms of their social role, responsibilities, working conditions, travel opportunities, and pay. In the United States and other developed countries, there are laws protecting women against discrimination. Many senior administrative positions are held by women. For example, in Norway, nearly 50% of senior administrative positions are held by women.
On the other hand, in Japan, Korea, and Saudi Arabia, there is gender inequality; men are favoured over women for senior positions in business organisations and renumeration. In Saudi Arabia, women, in the name of strongly held religious and cultural beliefs, are not allowed to serve as corporate managers. Their role is strictly limited to education and health care. In Korea, better employment opportunities and salaries are for men, even when women are more skilled and talented.
In many developed countries women are protected by equal opportunity legislation, however, women are often asked during employment interviews about their plans to start families and make child arrangements. Recent statistical data of the European Union indicated that in Italy, women are discriminated against in the workplace despite the issuing of Equal Treatment of Men and Women Act (ETA).
Child labor is one of the most important issues in the discourse of business ethical dilemmas. In poor countries some companies hire underage children as cheap labor. Many children are employed as kitchen-hands, cleaners, shoe polishers, and sales representatives. In developing countries, with their very high levels of unemployment, poor living conditions, and high level poverty, this is a legitimate practice. In the developed world, however, such practice is unacceptable.
In poor countries it is a common practice to sell underage children for sexual practices. In some developing countries, the commercial sexual exploitation of children is related to foreign child sex tourism. The possibility of relatively high earnings, low value attached to education and cultural obligation to help support the family make children vulnerable to physical and sexual abuse, drug abuse, child pornography and molestation. In the developed world such practices are unacceptable and called barbaric.
It is a frequent practice of companies in developing countries to favour relatives regardless of their abilities or suitability to work. For example, some companies in India and Asia offer their employees’ children the chance to join the company once they have completed school, even when other applicants are more qualified than employees’ children. In Western countries such favoritism is regarded unacceptable.
The attitudes toward environmental degradation and environmental responsibilities vary among different cultures. According to Donald Becker and Hans Fritzsche, while the majority of French and German managers may believe that pollution does not harm the environment, American managers believe that pollution is a significant threat to the environment.
Lying and providing other companies and customers with false information is a com-plex ethical dilemma. For example, lies, misleading information in travel brochures, and distorted media images are frequently used in advertising. However, nations differ in their attitudes toward lying and deception. Bambang Saee stated that while in collectivistic cultures such as Malaysia or Hong Kong, misleading advertising is considered acceptable, in individualistic cultures such as the United Kingdom, Australia, and the United States, misleading advertising presents a major problem.
Similarly, nations differ in their attitudes toward copyright violations. In Canada, the United States, and Europe, copyright violations are unethical. However, in Indonesia or Thailand copyright violations are acceptable. Many Indonesian and Thai businesses pirate copyrighted materials such as books, software, or DVDs and sell them in shops. This is regarded as acceptable and legal. They believe that they need cheap books and software to enhance their knowledge and thus assist their countries in future development.
On the other hand, Japan and the Philippines strongly oppose software piracy. Also, while padding expense accounts is considered a very unethical practice by Hong Kong Chinese and Malaysian managers, it is considered more of an ethical issue by American managers.