Why is Culture So Important in the Study of Business Ethics?
Cultural perceptions significantly affect the concept of business ethics. The cultural context of business ethics depends on such variables as economic, legal, ethical and philanthropic considerations. Some variables are more prominently highlighted in certain cultures while the same variables tend to be overlooked in other cultures. For example, the US culture primarily focuses on the economic factors. Meanwhile, the European culture prioritizes the legal factors.
Economic responsibilities of an organization focus around its ability to provide a suitable return to investors, safe and well-paid jobs to employees, and top quality products to customers. In the US, economic responsibilities are very important; therefore, if a division of the business is loss-making, it would be closed. In Europe, on the contrary, a loss-making division may be supported in deprived economic areas, as closing the division would result in a bad public image.
Legal responsibilities involve following the laws of the country in which the organization operates. The organization must follow all applicable laws and codes of operation accepted within the industry. In the US, the role of Government and its regulations is seen to be minimal, while in Europe governments and laws are required to regulate organizations. Governments enforce the law, even where those laws appear to be excessive and potentially damaging to organizations.
Organizations fulfill their ethical responsibilities when they act in line with expectations of society above what is required from the economic or legal standpoint. Ethical responsibilities relate to doing what is seen to be right compared with doing what is simply legal. In the US, organizations are normally seen to be acting ethically, and there is greater public trust towards businesses than in Europe.
Philanthropic responsibilities involve actions wanted by the organizations, but not required. Examples include sponsoring the arts, providing daycare facilities to employees’ children, and making charity donations to hospitals. In the US, organizations voluntarily focus on doing major philanthropic acts. Meanwhile, in Europe businesses are less involved with charities and are more focused on fulfilling particular regulatory requirements.
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