Ethical challenges in global markets: preparing students for ethical decision-making

Conducting a business today is not the same as before when business owners had a sound knowledge of all their stakeholders. As businesses operate around the world, they face numerous ethical challenges such as corruption, bribery, exploitative global sourcing, relative versus universal ethical standards, greenwashing, and so on (Cavusgill, Knight & Riesenberger 2017; Ferrell & Fraedrich 2021).

At Haaga-Helia, we teach students how to successfully evade these challenges and equip them with the desired knowledge and skills to make ethical business decisions. We combine theory and practice to develop students’ ethical decision-making skills, empowering them to become responsible business leaders capable of tackling ethical challenges.

This blog article is intended for educators teaching international business management and ethics. It explores business managers’ ethical challenges in global business environments and offers strategies to better prepare students for ethical decision-making.

Ethical challenges in international markets and students’ learning approaches

Business executives encounter numerous ethical challenges while dealing in international markets. Some of them are described below along with students’ learning approaches.

Corruption and bribery

Corruption remains a major concern in global business operations. For a business executive familiar with Finnish or Nordic ways of working, corruption may appear to be a daunting challenge to overcome.

Finland fares well on the corruption perception index so it is assumed that corruption in Finland is minimal and business executives do not have to deal with such issues while working domestically. However, corruption can be rampant in most countries. In some countries accepting bribes is an acceptable part of doing business, which may be challenging for Finnish business managers. It is estimated that more than $1 trillion in bribes are paid worldwide every year to gain access to important markets. (United Nations 2018.)

Our students analyse real-world examples of bribery scandals and examine legal frameworks like the OECD Anti-Bribery Convention to understand how businesses navigate such challenges. Students discuss these issues in teams and suggest ways to deal with such challenges. It is interesting to note how students from diverse cultural landscapes engage in productive debates, which is reflected by their worldviews. For example, Finnish students advocate for universal moral principles, while other international students emphasize cultural context.

Exploitative global sourcing

As part of global supply chains, many multinational companies (MNCs) procure products from international suppliers. Companies outsource mainly to save costs. For example, MNCs outsource production to regions with weak labor laws. This outsourcing results in a myriad of problems such as sweatshop factory conditions, child labor, unfair wages, and unsafe work practices. Such problems must not be ignored.

Our students investigate global supply chains in industries such as fast fashion. A huge emphasis is placed on corporate responsibility and ethical sourcing. The Corporate Social Responsibility (CSR) narrative is explored thoroughly, and students understand the theories behind the concept and its practical application through company examples. Visiting industry experts discuss CSR in classes and share their first-hand experiences.

Relative vs universal ethical standards

Cultures have varying ethical norms, making it hard for companies to apply one approach to business ethics. There are two main approaches to this challenge: relativistic and normativistic.
The relativistic approach holds the belief that ethical truths are not absolute. In contrast, the normativistic approach suggests that ethical behavioral standards are universal and should be maintained by the companies. (Cavusgill, Knight & Reisenberger 2017.) MNCs generally have a balanced approach, where they find an intermediate path instead of being absolutely inclined to one.

Our students engage in a debate choosing the approach that suits their own beliefs and justify their opinions. Furthermore, they explore case studies of MNCs and study the strategies they adopt to balance culture with universal ethical principles, such as gender equality and human rights. In almost all cases, a middle-ground approach is adopted by the MNCs. Students learn how MNCs navigate ethical dilemmas by integrating relativism and normativism.

Greenwashing

Nowadays, all companies want to portray themselves as sustainable. After all, stakeholders such as customers, media, government, and investors expect businesses to be good corporate citizens. Sustainable companies gain an increased reputation and brand image. As sustainability can result in profits and a positive image, every company wants to appear sustainable. Therefore, they market themselves as sustainable, but numerous companies exaggerate and misrepresent their environmental impact and engage in greenwashing.

Our students study the companies’ sustainability reports and critically assess their efforts to differentiate between genuine sustainability efforts and greenwashing tactics. They analyse measurable goals and watch out for misleading marketing claims. Our students also investigate the media news and greenwashing scandals about the company, past lawsuits related to sustainability deception, and supply chain transparency.

A holistic approach to teaching ethical challenges in international business

In conclusion, a holistic approach to teaching ethical challenges in business is essential for preparing our students for ethical decision-making. The pedagogical methods we choose, such as real-world case study-based learning, inviting industry experts, fostering debates, and critical analysis of reports, promote a deeper understanding of ethical dilemmas.

The methods we use work in cultivating future responsible leaders who prioritize ethical business practices as they:

• Encourage students to engage with diverse perspectives.
• Apply ethical principles in multicultural contexts.
• Challenge our students to analyze real-world ethical dilemmas.

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