International business ethics emerged quite late globally compared to the business ethics that came up in 1970â€™s. It was only in late 1990â€™s that the international business ethics came to the fore especially so after the economic developments that occurred on a global scale.
In 1990â€™s many businesses from the developing countries expanded their operations and became multinational. The transactions between businesses and the governments increased as a result, which gave rise to many practical issues. Culture and its relativity was one factor more prominent than the others. Other ethical issues in the context of international business are generally dealt with the laws of the land; although all of them fall within the ambit of international business ethics.
Globalization diminished the barriers between countries on the globe and also called for universalize of values for trade to occur smoothly. Universal values were perceived to control the behavior in the commercial space. This lead to ethical issues in the international business perspective, those that were unknown till date.
Other theoretical issues arise from the diversity of business ethical traditions in various countries across the globe. In addition, comparisons made on the basis of corruption rankings of a certain state or on the basis of gross domestic product of a certain economy also lead to ethical issues in the international arena.
Since religion brings in a wholly different perspective to the way we look upon things; the comparison of ethical traditions from the perspective of the latter also gives birth to ethical problems. For example, trade in Christian dominated countries is different from the trade in Islamic countries. Again depending upon how strong or profound the impact of the religion is, business practices are influenced proportionally.
In the international business arena, ethical problems also arise out mere international business transactions. Fair trade movement, transfer pricing, bio-prospecting and bio-piracy are examples of transactions that fall within the ambit of international business ethics. Similarly issues like child labor and cultural imperialism are controversial enough to call upon the attention of international business ethics.
Yet another arena for strong requirement of ethics would be when multinationals bargain to take advantage of international differences; For example when rich nations outsource their services to poor and developing nations at cheaper cost. Western nations were up till recently outsourcing many of services to third world nations where they could hire manpower for the cheapest prices. This led to a severe competition between developing nations with each one offering cheaper labour than the other.
Dumping is yet another way by which large companies are trying to kill the domestic players. Foreign players often sell goods and services at a cheaper price making it hard for the small players to survive the competition. Consumer durables and FMCG are biggest examples of such practices. The bigger threat here is the resulting monopoly which places the customer in a losing position. The international trade commission began for its search of its anti dumping laws from the year 2009.
All these are ways in which business at the international level can lead to ethical dilemmas. In absence of international business ethics it may become almost impossible to regulate business and create winning situations for people in the market place.