Business Ethics in a Global World: An Introduction to the
Issues
By Margaret Steen
Many Westerners may view China and India primarily as a threat
to North American and European middle class jobs. But this is
a distorted view of these two growing economic powerhouses,
said Aron Cramer, president and chief executive officer of Business
for Social Responsibility, at the Markkula Center for Applied
Ethics’ fourth biennial business ethics conference on March
9. The topic of the conference was Business Ethics in a Global
World, with a focus on China and India.
Cramer, who advises companies on issues of corporate social
responsibility in today’s complex global economy, noted
that how China and India manage their growth will have a huge
impact on many countries. “The questions matter for the
entire planet,” he said.
Cramer began by defining the aims of corporate social responsibility:
to use the market economy to address gaps in income distribution
and help pull people out of poverty, as well as to ensure the
sustainability of natural resources such as fish stocks and
water.
Cramer offered three perspectives on how Chinese and Indian
companies apply business ethics.
1. How have Western companies and Western expectations shaped
Chinese and Indian views of corporate social responsibility
and ethical business? Some people see corporate social responsibility
as Western countries trying to impose their own values on other
countries. Cramer disagreed, saying that in many disputes about
labor standards, for example, the problem is that the local
labor laws are not being enforced. Although he noted that there
are some cases where the issue is a difference in standards
– freedom of association in China, for example – much
of this debate would be toned down if more attention were paid
to simply enforcing local laws. “CSR is not a foreign import,”
Cramer said.
2. How do Chinese and Indian businesses think about ethical
behavior on their home turf, in China and India? Cramer noted
that in both China and India, the development of business ethics
is being shaped by a new generation of business leaders, some
of whom have been educated or worked in the West. In India,
corporate social responsibility is still seen primarily as an
issue of philanthropy – but that is changing. And although
China lacks some of the drivers toward business ethics that
are common in the West, such as an aggressive press, the country
is very aware that it needs to make its economy greener.
3. How are Chinese and Indian companies expressing themselves
in third countries, where they’re becoming more and more
influential? Many Western companies have made mistakes when
they tried to expand into international markets that they didn’t
understand, Cramer said, and now this is starting to happen
to Chinese and Indian companies as well.
Cramer also offered thoughts on global trends that will shape
the continuing debate over corporate social responsibility.
First, he said, climate change will continue to be a significant
issue. China and India have several advantages in addressing
this issue: Both are committed to developing their technological
expertise. Both have large domestic markets, which make developing
new services easier. And neither has legacy industries –
such as an auto industry built on cars that use gasoline –
to offer resistance to new technologies.
Cramer also predicted that the fragmentation of power and information
would continue. This presents real challenges for both India
and China. For example, the Internet is developing differently
in China than in the West, because of government restrictions
on free expression.
Finally, Cramer noted that companies are starting to see the
need for worldwide standards on everything from environmental
regulations to labor standards to corporate governance. But
it’s not clear how that will happen. “We don’t
have global rule-setting for the global economy,” he said.
He added, though, that China has become more engaged in some
of the efforts to set global standards, and that some Chinese
companies have started issuing reports on corporate social responsibility.
Now the question is how open the West will be to Chinese and
Indian perspectives on business ethics.
Margaret Steen is a freelance author
March 2007
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