Business Ethics in the USA and China Term Paper

Whenever a crow finds a piece of meat it shouts to the top of its voice, calls its friends, and then eats his bread. It is unethical for a crow to eat alone. Ethics has received due importance since the advent of humankind that God has taught each of its creatures to follow them. Today, it has lost its meaning, especially in business world. Business ethics is a set of ideas and principles that each person associated with a particular business needs to follow in order to earn a fair and just income. It is easier said than done. In this fast growing world, each and every man encounters situation where a decision has to be taken – a decision that on one hand, demands honesty and good conduct and hard work, whereas, on other hand, it gives many ‘easy ways’ of attaining ‘success’.

There are people who go to gym to give their muscles good tone and people who suffer from marasmus and kwashikor (diseases in which muscles are not built due to protein deficiency). For a fish to survive, it has to feed itself onto other fish’s babies. If ethics are in nature than using others for personal, benefit is also in nature! What is right and wrong is remained an unanswered question!

Let us begin by talking about the snacks industry. Each year, chips, biscuits, soft drinks, sweets and chocolate industry earns millions of dollars. There will hardly be any man on earth who will claim that he does not like eating these. Moreover, most of the people know that these bring with it many associated health problems, yet they consume it keeping their health at stake. Snacks are not the necessity of life.

According to the World Bank, there will be severe poverty by 2015 in the world, if investments are not made in agriculture industry. Why is this happening? It is because that the advertisements we see affects a lot. Drinking a particular drink will bring a beautiful woman, a BMW and lots more with it. Is it ethical to play with the psychology of the consumers and coerce them to buy these products? How will they earn? It is surely impractical to change an occupation or profession.

Today, when at most places many unethical practices are prevalent, pressure is being laid upon being as ethical as possible. There are several agencies, which keeps a check on quality of products and information given on the labels. However, what does it take to remove a label and replace it or probably change the expiry date? Fruit juices, which remain unsold and expired on the shelf of developed countries, are exported to developing countries with expiry date either erased or changed.

These millions of packs, if discarded, the companies will soon become bankrupt, but a less educated citizen of developing country will fell privileged to drink a juice from developed country and will not even bother to check the expiry… and all juices sold! As the world economies are, globalizing businesses all over the world are becoming uniform. However, business ethics are globalizing very slowly. Recently events related to some US organizations have reminded the memories of 1970’s and 1980’s with the ethical misguidance of their executives and boards of directors because of collapse between a retailer and a US technology company. (Gagan, n.p.).

“As we know about the Fortune 50 company that made it its practice to utilize its jet aero planes to retrieve lobsters from the fishing docks in Bar Harbor, Maine for four executives. Those trips had a purpose of only lobster transportation at $1,400 per aircraft operating hour approximately, during repeated eight hour round trips”. (Brian, n.p.).

Moreover, there are some big companies whose financial operation had been solely depending on the distinctive “cookie jar.” In addition, there are companies that record revenues when their product’s purchase date has just executed and then certain companies’ executives receive vendor kickbacks. Some companies keep on recording revenues with their products being transported just to the warehouses and without any knowledge of their sale or some other destination. These are wrong, unethical and illegal practices. (Brian, n.p.).

The different kinds of companies described above are examples of a very clear violation of the S.E.C. and I.R.C. “Regulations and provide a sample of violations like the use of special purpose entities, engineered balance sheets, fraud, and veiled embezzlement”. (Brian, n.p.).

White-collar crimes in businesses are increasing in the Unites States mainly, because there are more business laws and regulations to violate. May be the investors, journalists, and the American citizens are more involved in business ethics may be because, there is more violation of rules in business ethics than in any other economy of the world. (Brian, n.p.).

Obviously, from top to bottom every person involved in organization’s activities must fulfill their duties. In this area, many researchers have agreed on the fact that unethical activities in lower level management occurs when upper level management tends to show lazy behavior towards their responsibilities. Certainly, a company’s efficiency depends on day-to-day operations carrying out by all employees.

In this regard, no organization can achieve their targeted plans if their employees indulge themselves in unethical activities.. (Brian, n.p.) “Close evaluation of the board and committee membership, to ensure that board members individually spend meaningful time within company locations and terminate board members who have missed more than one board meeting or board commitment during any one year”. (Brian, n.p.).

Sustain healthy participation and quick reactivity to domestic communities and media publications like magazine and business publications. Open communicate at both internal and external level nearly all-commercial activity that are not relatively confidential. However, the trend of companies to be close-lipped and non-antiphonal with respect to their internal regulations and external surroundings inclines to be straightly proportional to the happening of nonstop ethical and legal violations. As a matter of fact, the complexity and the challenges can differ when distinguish one company with another. (Brian, n.p.).

However, China’s business ethics are somewhat different by United States. China’s main motive is to earn money and the generation profit. The problem there in China is the low literacy rate among people, media reports that many of the laborers in China are forced to work and many of the victims are children. The illiterate people are motivated by a single motive “MONEY”, these pitiable people are unaware of the fact that how this idea of only making money can disturb their health and mental circumstances.

Many of the people work only for money; they do not even bother about the business ethics and social responsibilities. Due the low level of education in China, many people has inadequate knowledge about the products, for instance, they are ignorant of the piece of information of a certain product that may not contain healthy ingredients or might have some harmful chemicals, as, many disadvantageous effects does not have an immediate effects but they react slowly in the human body.

This scrutinizing to a business sector from a public sector is not so strong in China. Apart from the literacy rate, the government sector is also weak in China. The government supervision is fragile; the government officials are not so interested about the needs of their public. They are more towards the meeting standards and the benchmarks set by the developed countries..(Tadla, n.p.) The Chinese view their contracts as a win-win, profit and a long-term relationship.

This is only possible when trust is there-Guanxi (trust me) as a major ethical principle for Chinese, which is difficult to establish, as winning someone’s confidence takes time. The opposite party should also have a positive attitude, if both the parties work in the same manner for mutual benefit only, then a win-win situation can occur. They believe that trust is a very important part, when dealing with money or doing any sort of transaction. Nevertheless, for building trust, one should give time and repeated meetings are important.

As mentioned earlier, U.S Treasury Secretary, Henry Paulson visited China over seventy times while being the chair of Goldman Sachs. He has excellent guanxi with the current Chinese leadership.” But, had no result due to the lack of trust from the province”. Many government officials waste their time, energy and money due to lack of trust and go disappointed. (Tadla, n.p.).

It was reported on Tuesday 10^th, 2007 that the United States was not so happy with China’s performance; the government filed two (WTO) World Trade Organization Charges against China. The complaints were related to the property rights and the rights of protection. The United States claimed that China is not controlling the constant copying of the movies, trademarks, patents and many other sensitive materials, and it was claimed by the US that China’s intellectual property is not protected by them anymore.

This complaint was valid, because China had broken many laws related to copyrights and they are jamming U.S. products, which is harmful for the United States, in response; United States is allowed to claim any trade barriers on Chinese products. China was upset with United States and came back with verbal challenges after such a turn down in their surpluses. “Wang Xinpei, a Commerce Minister in Beijing stated against the consensus reached between the two countries’ leaders on developing bilateral trade relations and property handling trade problems”. (The New Business World, n.p.).

Any business- small or big can survive only, if they are working ethically. Business ethics are important when the entrepreneur wants to enjoy profits. Business ethics are a set of ideas and principles that each person associated with a particular business needs to follow in order to earn a fair income. (The New Business World, n.p.) Until now, we have discussed some of the basic principles and several past incidents that have been observed in the United States, as well as, Chinese business communities. Now, the paper will try to discuss and compare some of the fundamental ethical principles of both countries, in order to understand their beliefs and related practices while doing business with each other, as well as, with rest of the globe.

In order to understand the business ethics of China, the implementation of foreign models should be avoided which can result in unavailability of the required results, and thus, waste of time. A number of studies meant for the understanding of Chinese business ethics evaluated that wants of becoming a global power has been noted significantly in the Chinese businesspersons. In this regard, dishonesty and corrupt practices will have to be eliminated from their business community.

In the previous years, it has been observed that rich Chinese people entered into the business community, and started to expand their business with their money power, and by corrupt means. However, recently, this practice has been changed, and MBA is being pursued by a vast number of students in the China, which has shown significant changes in the behavior of businesspersons in the country. In addition, one of the basic principles of the Chinese is the avoidance of any influence from the Western countries, which are rushing towards the Asian countries for this purpose.

Instead, the concept of an initiation and leadership has been practiced in the China, and steps are being taken by the government, as well as, by the private sector to emerge as the global leaders in the business world, as well as, in the formulation of business ethics at a global level. One of the reasons of these concepts in the Chinese business community is that a role of an economic powerhouse is being played by the China due to involvement of heavy investors from around the world. Thus, the whole business world can be easily impacted by the Chinese business standards. (Brian, 2005).

One of the other business principles in the China is that Western experts and professionals are allowed as minimum as possible during the collaborative projects in the country, which results in the Chinese dominance over the different functions of a business. In this respect, only financial investment has been allowed by the Chinese community, and this strategy has been implemented to overcome the problem of Western influence in their community.

In addition, it has been observed that Chinese professionals often become harsh with the Western partners. For instance, distribution of a Chinese code was done by an American counterpart after its translation into the English language. In response, thanks were expressed and the code was pitched away by the Chinese firm.

On the other hand, a new Chinese code was introduced to the American counterpart, the identification of these codes was taught to the American managers, and then, the distribution was done in the distributive areas. Thus, it has been evaluated by this example that the ethical standards of the Chinese businesspersons have not allow the involvement of Western influences in their region, and even, outside their region. Moreover, the philosophical traditions of the Chinese people have played a crucial role in deteriorating the ethical standards of the business community. (Gagan, 2005).

For many years, consideration of family members for high posts and profits has been a traditional practice by the Chinese people, whether it is a monarchy, or a post of manager in the firm. This has resulted in corruption in the Chinese firms, and a number of Chinese fresh graduates have been discouraged by this practice. The teachings of Confucius have been related by the Chinese businesspersons in their defense, as family members were given more importance and responsibility by him. In the result, at some places, this traditional practice has still continued, and have corrupted a number of other ethical standards that are considered and practiced all over the world.

Now, we will try to discuss and relate some of the fundamental principles and standards of business that have been considered and practiced by the American business community. It is believed by most of the American trade organizations, as well as, American businesspersons that common points and similarities can be found by the understanding of different cultures around the world, which is quite diverse with the concepts of Chinese business community. In this regard, steps are taken by the U.S. businesspersons to identify similarities that can support their business activities in other parts of the world.

Moreover, some of the sources of benefits and profits are the honesty and consistency of products and services that are provided to the customers. In this regard, American counterparts do not depend on the quantity, and concentrate on the quality material, which is once again, different from the China, which merely works on the bases of high volume and huge profits, as already discussed in the paper. In addition, study of different viewpoints of different people and communities has been encouraged in the United States, which results in a number of new opportunities for them. In other words, viewpoints and perspectives of other communities are given due consideration by the American businesspersons, which results in the diversification of the United States and Chinese business ethics.

In the United States, one of the smartest investments is the colleagues that are appreciated and respected by the high officials of a U.S. firm. On the other hand, Chinese people do not regard the colleagues at a lower level, which results in a gap of understanding. It has been observed that American firms work in a family-based environment, and respect and positive reception is provided to almost every person in the firm. On the other hand, this practice has still not being encouraged in the Chinese business principles. However, the Chinese government is making efforts to incorporate this practice in their culture also, in order to strengthen their power in their region, as well as, around the globe.

In the U.S. firms, provision of healthy and safe environment of working has been considered as one of the major parts of the business ethics in the United States. In this respect, every firm that considers the ethical principles has formed a committee for the provision of healthy workplace to their employees. Conversely, we have studied earlier during the paper that this kind of concept has not been encouraged in the China, as it may reduce the profit margin.

Thus, employees are considered as machines, and the ‘money’ is the only provision that is given by the Chinese firms. However, this practice has not been found in every Chinese firm. A number of Chinese firms have incorporated the abovementioned American, and several international principles in their firms, but most of the Chinese business community has bound themselves for the generation of high profits, and less costs of the products. Until now, it has been evaluated by the comparison of the United States and China that most of the practices that are based on the business ethics are quite diverse in nature.

Furthermore, transparent performance has been considered as one of the major constituents of the business ethics in the United States. Employees are shared with the previous performances, and opinions and new ideas are appreciated and encouraged from the employees. In the result, a trustful relationship is the outcome of this transparency. However, Chinese firm works are based on more privacy, and less sharing. Only the high officials of firms are considered for the sharing, as well as, giving new ideas and opinions. (Brian, 2005).

In the United States, competition is encouraged, and it is taken in a fair manner. Competitors are provided with enough space to represent their work and make their profits. On the contrary, Chinese firms do not allow any competitors in their region, and monopoly is regarded by them. Establishment of social security system has been introduced in the American world, which has considered the reduction of gap of different social classes of the country. Thus, business ethics in the United States appreciate this practice, which has not been encouraged in the Chinese business world. (Gagan, 2005).

Conclusively, a number of similarities are there in both countries, in terms of their business ethics and moral principles that are considered for the running of business functions. However, the United States and China share more diverse characteristics in this respect, and different business standards have been considered and performed by the Chinese and American firms in their region, as well as, around the world. It has been hoped that this paper will help the professionals, students, and experts in the better understanding of business ethics, and particularly, the implementation of business fundamentals in the United States and China.

Works Cited

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“Business ethics”: Definition and Much More. 2007. Web.

Gagan B. 2005. “An Experiential Perspective On Business Ethics In The United States”. 2007. Web.

Manuel V. (n.d.). “Business Ethics” Concepts and cases. Pearson Education Limited.

Onora O. “A question of Trust” The BBC Reith Lectures 2002. Cambridge University Press.

The New Business World. 2007. “Battle of Intelligence & Trade: U.S. vs China”. 2007. Web.

Tadla E. n.d. “China Lesson Five: Guanxi, Trust Me.” 2007. Web.