A world of difference

Across the globe, ethical standards can vary. Who is right and who is wrong, or is it simply a matter of perspective?

After working for his bank for seven years, Paul was offered the opportunity to take a position in an overseas office of his organisation. He saw this as an ideal opportunity to broaden his experience. Paul accepted the new position as business development assistant.

Paul’s office was in a small European country that had become independent during the 1990s. He was told the country was relatively poor but growing fast, as it was rich in mineral deposits that were only now being exploited to the full as new export markets opened up. Paul rented a small, comfortable apartment in the capital city and quickly adapted to his new environment.

Although he found the work and the culture of the host country interesting, several features of the business environment disturbed him. He expected the way business was carried out would be different, but saw that many of the standards of behaviour he was accustomed to at home were absent.

On several visits to clients, Paul’s driver (a full-time employee of the bank) was stopped by the police for speeding or at random checkpoints. Paul noted that these incidents often ended with the drivers paying cash to the police officers, with no documentation completed. More surprisingly, he learned it was common for the bank to give huge price concessions to businesses it dealt with, and highly favourable treatment to wealthy executives, while small local businesses were dealt with on standard terms.

On one of his trips home, Paul was told by the airport check-in assistant that his case exceeded the baggage allowance and he would have to pay for this. Despite Paul insisting the bag only weighed 18 kg while the allowance was 23 kg, the assistant was adamant a fee was due. When Paul asked to see the manager, the assistant made a telephone call before telling Paul he would not be charged on this occasion.

Paul’s impression of his initial period in the job was that the country and people were charming, but that there was a culture of corruption and sharp practices in almost every walk of life. He was very surprised that his employer, which published its own corporate code of ethics at home, was prepared to tolerate dishonest or illegal practices, or even do business at all under those conditions.

Paul shared his thoughts with Susan, a colleague who had worked in the country for over ten years. She replied: “Welcome to the real world! Our bank brings income and wealth to this country and if it did not acquiesce to the expectations of local politicians and others in authority, we would not make any money or create the opportunities we bring. The cops put the fines in their pockets and our drivers claim them back through petty cash. The wealthy locals pull the strings in the local economy, so if we do not treat them favourably we won’t do business at all, and that harms the rest of the population. The man at the airport earns the equivalent of US$75 per month, which is impossible to live on. What do you expect when he sees a comparatively rich Western European who needs to get on a plane?”

Paul agreed that all countries were different, but he did not feel that it was a good reason for the bank to compromise its standards.

His response is based on his values, and his perceptions of virtues. Although not perfect, the UK is relatively free of such overt acceptance of low moral standards. When gaps or inadequacies in public law are identified, they are often addressed by regulations or primary legislation. The FSA rules on soft commissions and the Bribery Act are good examples of this.

Virtues are the characteristics we see as good. If Paul responds positively to what he sees as virtuous, he will respond negatively when these characteristics are absent. He will see those who seek to gain through bribery, corruption or other dishonest practices as doing wrong.

Paul may also see his responsibilities, and those of the bank, in relation to duties. These may be universally accepted and therefore non-negotiable at home, being underpinned by the law, regulations, codes of conduct of professional bodies (such as the CIOBS Code) and his own employer’s corporate code. Essentially, Paul’s view is that if we are told we cannot do something, we should not do it, and if we commit ourselves to published minimum standards, we should do what we say we will do. Stepping outside his domestic environment, Paul has encountered a completely different set of values and perception of duty.

Susan has a consequentialist approach to Paul’s concerns. She sees what is right and wrong in relation to outcomes. If the bank does not tolerate local practices it will be impossible to do business. If the bank withdraws from the country altogether, even less income wealth will be created and those who currently benefit from the bank’s contribution to the economy will suffer. This does not justify the behaviour, but legitimises its effects. Susan sees most people benefiting while others are worse (or no better) off. It is unlikely all will benefit, as certain of the practices work to the detriment of some, such as the smaller businesses who cannot benefit from the favourable treatment afforded to more powerful players. Ultimately, though, Susan would argue that the latter create jobs and incomes, which benefit society generally.

These perspectives on ethical behaviour are open to subjective judgment. Fierce debate rages over issues such as this. Nearly everyone in the UK accepts that child labour is wrong, but few attempt to stop the small army of young people who act virtually as full-time carers for disabled parents. In a worldwide context, child labour polarises opinion between those who see it as exploitative, depriving children of education, and others who believe it is acceptable in some societies, or even see it as an imperative for survival.

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