Business ethics is a critical concern for various stakeholders, such as customers and regulatory agencies. Organizations are increasingly finding it necessary to ensure that their activities in the business environment are not unethical since unethical business practices can significantly damage the reputation of firms in the marketplace (Kolk, 2016). American business organizations engaged in international business face various ethical challenges in foreign markets. One of the critical challenges is poor working conditions for workers in factories set up in developing and emerging economies. Many of these countries do not have regulations that ensure that employees work in safe conditions.
Additionally, poor implementation of the existing regulations encourages the unethical treatment of workers (Kolk & Van Tulder, 2010). To avoid reputational damage from unethical practices in their supply chain, American companies must develop strategies to enhance supply chain ethics and mitigate the poor treatment of workers. The business community should establish standards of engagement that ensure that suppliers and other stakeholders within the supply chain treat workers ethically (Lim & Greenwood, 2017). Such standards of engagement should be captured in contractual agreements to ensure that supplier contracts can be cancelled if they violate the terms of engagement. Furthermore, suppliers can be sued for violating ethical standards that are bound by contractual agreements in courts that have jurisdictions to determine such cases. Using legal means to compel suppliers to act ethically in the business environment reduces ethical violations (van Donk et al., 2010). Additionally, American organizations should establish an organizational culture that enhances ethical practices in the business environment.
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If the issue was domestic, the necessary state and federal agencies would apply penalties and charges for the violation of regulations focusing on the fair treatment of workers. The company would also report the violations to the authorities for action. Conducting business internationally, however, changes the dynamics hence the need to establish terms of engagement. Supply chain audit can also be used to ensure ethical practices within the supply chain in international business (van Donk et al., 2010). Ethics should be considered universally because there are shared human values that are not restricted to specific countries or regions. Such an approach would enhance business ethics in global supply chains. However, some ethical considerations are determined by culture. There is a need, therefore, to consider how culture influences ethics when engaging in international business.
References
Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business , 51 (1), 23-34.
Kolk, A., & Van Tulder, R. (2010). International business, corporate social responsibility and sustainable development. International business review , 19 (2), 119-125.
Lim, J. S., & Greenwood, C. A. (2017). Communicating corporate social responsibility (CSR): Stakeholder responsiveness and engagement strategy to achieve CSR goals. Public Relations Review , 43 (4), 768-776.
van Donk, D. P., van der Vaart, T., Awaysheh, A., & Klassen, R. D. (2010). The impact of supply chain structure on the use of supplier socially responsible practices. International Journal of Operations & Production Management , 30 (12), 1246–1268.
