Ethical Challenges in International Business
The ethical challenges that the organization faces is: effectively promoting human rights and respect for international law. This is challenging, because a variety of governments around the world engage in various human rights abuses in one way or another. Amnesty International takes a world view on human rights abuses. However, for the purpose of this discussion we will be focusing on China. (“Who We Are,” 2010)
A real or fictitious organization expecting to expand its operations to the region.
The organization that is expanding into the region is Jones LaSalle. They are real estate services firm that covers real estate transactions such as: closings and sales. The reason why they are expanding into China is: because of the rapid growth that has been taking place, in the commercial real estate market. This has been having ripple effects in residential housing, as the growing population and rising levels of income are creating a housing shortage. (Maloney, 2008) The ethical dilemma that the company faces is the Chinese government is controlled by the Communist Party. They have maintained control of power, since the 1949 Revolution and have been known for not following international standards on human rights. In the case of Jones LaSalle, the fact that Communist government is controlling the country means that they are helping to support a brutal regime. With the various taxes and laws that they follow as a part of doing business in the country, are serving as rubber stamp of the various human rights abuses. A good example of this can be seen with a report that was released by Amnesty International, which found that the rapid increases in economic growth have meant that the government has also been clamping down on human rights (most notably free speech). (“Censorship in China,” 2010)
Recommendations for the business
The issue of human rights is a problem, for Jones La Salle because their presence could mean that they are indirectly supporting the activities of the Chinese government. To address this ethical concern, there are a number of different actions that could be taken including: leaving the Chinese market and working with the Chinese government behind the scenes. Leaving the Chinese market would mean, that company could take a major loss and it may affect the competitiveness of the firm in the global marketplace. That being said, this action would deal with the ethical dilemma, but at a high price. Working behind the scenes with the Chinese government, could mean that company officials, can slowly influence public policy on human rights. Where, government officials will not feel the public pressure to change. This could help to address the ethical dilemma. However, if these concerns are addressed in the wrong way, this could outrage the government. At which point, they could impose severe restrictions on the company.
Select the most appropriate action and justify it.
The most appropriate action that the company could take would be to: work from behind the scenes with the Chinese government. Where, there would be an emphasis on addressing this issue in non-confrontational way. If this kind of approach can be used when dealing with the Chinese government, it will have a dramatic impact upon the company, by improving relations and helping the company to expand into other real estate markets. As they become a larger player in this area, they will begin to have more influence on government officials. The reason why, is because the economic impact of the company on the economy; could be so severe that it would be in the government’s best interest to address these issues. This strategy will work, if a long-term focus is taken and the company uses flexibility when dealing with government officials. These elements will help Jones LaSalle address the ethical issue, without hurting their overall bottom line.
Censorship in China. (2010). Amnesty International. Retrieved from http://www.amnestyusa.org/business-and-human-rights/internet-censorship/page.do?id=1101572
Who We Are. (2010). Amnesty International. Retrieved from http://www.amnesty.org/en/who-we-are
Maloney, L. (2008). Globe Trekkers. Multi-Family Executive. Retrieved from http://www.multifamilyexecutive.com/development/globe-trekkers-us-firms-expand-overseas.aspx
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