Guidelines for Cross-Cultural Business Ethics
By Larry Sharp
This article is designed to help with decision making for business owners working cross-culturally in developing countries. It recognises that there are few absolute standards which apply to all contexts all the time and thus hopefully these guidelines will assist business owners in making tough decisions on matters related to ethics, corruption, morality, bribery and similar themes.
Some would like to believe that the Bible gives a single definitive perspective for all situations. While this is not true, the Bible does give us principles for decision making, thus in preparing for decisions it is important to understand Biblical absolutes in the light of:
- Biblical culture
- Our own culture of socialization
- Our host culture of doing business
Ethics may be defined as the moral philosophy of knowing the difference between what is right and wrong and acting accordingly. It includes a moral duty and obligation to do good, a statement which seems straightforward but which is complex in light of diverse cultures. Ethics has its root in the Greek word “ethos” which means character; therefore an ethical framework is a systematic set of concepts which provides guidelines for correct behaviour that demonstrates ideal individual and corporate character.
It is important that we treat these guidelines as just that – “guidelines” that are a means to guide our customization in the application of God’s principles to contextual situations in our modern world.
The foundation of ethics for the follower of Jesus is not rules but the changeless character of God: “Christianity operates on the notion that ethics (the study of human character) logically follows theology (the study of God’s character)” (Hill, 2008, p.14). Actually theology and life are inseparable. Three of God’s divine characteristics are directly relevant to ethical decision-making and they are repeatedly emphasized in the Bible. These are holiness, justice (righteousness) and love.
A second presupposition is that since man was created in the image of God (Gen 1: 26-27) we have a need to live an integrated life, with God’s ethics and values in all aspects of our life. Therefore business ethics are integral to other aspects of our life, thus refusing a sacred-secular dichotomy between faith and the way we live in the marketplace. As the former Christian CEO of Alaska Airlines says, “CEO is what I do. It’s not who I am.” This concept can be understood by noting the differences between our occupation and our vocation. An occupation is what we do and our vocation is what we are called to do.
These guidelines presuppose that our work is a high and holy “calling” and is no less of value to God than a “calling” to priestly or clergy work. “We should accustom ourselves to think of our work as sacred…” (Martin Luther). A proper theology of work suggests that all work (i.e. vocation) is a calling (i.e. vocation) and we fulfil our vocation by submitting to God’s will and serving humanity – something much bigger than our job. For Christians there is no artificial division between work and life. We are to be the same wherever we go, and whatever we do (Hill, 2008).
Fourthly, these guidelines acknowledge variant cultures lying between two extremes: “rule-based cultures” and “relationship-based cultures”. While not negating the clear nature of Biblical ‘absolute rules’, it is important to realise that those same Biblical rules sometimes look different in “relationship-based cultures”. For example, behaviour such as cronyism (which would seem to violate I Tim 5: 2) that is corrupting in rule-based cultures (conflict of interest) may be functional in relationship-based culture (which builds trust in the relationship). It is important to observe carefully and learn to appreciate the manners, mores and behaviours of local people, testing them against ethical principles that are noble, right, pure and lovely (Phil. 4: 8).
God established the Ten Commandments through Moses but the Israelites developed hundreds of rules to “clarify” and ensure compliance. What this legal framework did was to prove that we are all sinners. When Jesus came he simplified it all by boiling the law down to two requirements: 1) Love the Lord your God with all your heart, soul and mind; 2) Love your neighbour as yourself. Thus Jesus establishes a higher standard and a guide for decision-making.
It is important to realise that with all the emphasis on corruption, bribery and political hostility, ethics is a much broader topic extending to issues of fair wages, caring for employees, avoiding exploitation of workers, discrimination, stewardship of creation, etc.
Factors Undermining Ethical Behaviours
It is critical to be so close to Jesus and dependent on the Holy Spirit for wisdom that we follow his leading on a moment by moment basis. The tactics of the evil one are geared to get us to compromise and weaken our hearts for the time of decision, so we must give attention to our heart. John Maxwell (2003, pp.55-70) in Ethics 101: What Every Leader Needs to Know provides a list of five factors to watch for:
- Pressure (to take shortcuts, compromise, break promises, etc.)
- Pleasure (to succumb to the hedonistic focus on what feels good to us)
- Power (is for the purpose of service, not to be kept at all costs)
- Pride (CS Lewis believed pride to lead to every other vice)
- Priorities (“Things that matter most must never be at the mercy of things that matter least” Goethe)
A Practical Decision Making Process
The following process is suggested by Wong and Rae (2011, pp. 187-8) as a way to go about our thinking process.
1. Gather the facts and take stock of what we know and what we need to know, thus eliminating communication problems, misunderstandings or strategic issues.
2. Identify the ethical issue – who are the parties involved, what are their interests and what are the values underlying them? The reason for the conflict is tension between values.
3. Clarify the values and virtues that are involved. What moral principles and biblical virtues should be brought to bear?
4. What are the alternatives that could bring a win-win situation? Try to be creative and realise that sometimes the best solutions are ones few people have thought of before.
5. Weigh the values realising that some values are more influential than others, something Jesus modelled for us (Matt 23:23).
6. Consider the consequences. What happens if you do; what happens if you don’t? This will not resolve the dilemma but consequences should still be considered.
A basic ‘starter kit’ of questions to consider when facing ethical decisions
1. Will the decision negatively impact the Gospel and our testimony? It is vital that our proclamation of the “good news” by what we say is correlated consistently with who we really are in our testimony. Integrity must be paramount because it is our actions that open doors for understanding and sharing the hope that is within us. Daily we must trust God that our conduct will not discredit our Saviour. Decisions must not be made based on short-term gains or expediency but on long-term operations, goals and relationships that allow us to proclaim the whole gospel.
2. Will the decision demonstrate our identity in Christ? It is Jesus whom we seek to please and any compromise in the direction of being a “people pleaser” or pleasing a “grade giver” will result in lost potential for optimisation of our life and testimony. Short cuts to spiritual maturity invariably are a result of a lack of trust in God. Driving toward ethical decisions demonstrates a strong identity in Christ and that we have our priorities straight and our spiritual formation is on target.
3. Will this decision violate the moral authority and principles of God? This of course requires we be students of the Word and always growing in the ways of God. As we understand more and more of the character of God (see presupposition 1), we learn what His holiness, justice (righteousness) and love look like in the scripture, in our own culture, and thus can more easily apply that to the culture of our business.
Rotary International works hard to promote ethical practices and decision making in every society and every nation and every cultural and religious context. They have adopted “The Four Way Test” for everything they say, think or do. It aligns with God’s moral principles:
- Is it the truth?
- Is it fair to all concerned?
- Will it build goodwill and better friendships?
- Will it be beneficial to all concerned?
4. Does this action violate a law? While a law is a human standard and not benchmark to holiness, justice and love, it is important to acknowledge and respect the law, while at the same time understanding that it is not exempt from divine authority. “A just law is a man-made code that squares with the moral law or the law of God.” (Welch ed, 1987, pp.153-4) Keep in mind that “… in free societies law is a moral floor, providing only minimal standards for acceptable behaviour” (Wong & Rae, 2011, p.98).
For example, Americans doing business abroad need to be familiar with the Foreign Corrupt Practices Act, the sanctions of the Office of Foreign Assets Control (OFAC), Export Administration Regulations (EAR), Taxes and Limitations on Overseas Investments, US Rules on Controlled Foreign Corporations (CFC), the pros and cons of choosing the right business structure, HR considerations on how to conduct business in the host country, etc. Local, international and American laws must be understood and operations planned and executed in compliance with these laws. Legal and accounting experts often need to be retained to interpret these laws in the given context. Decisions should be made to ensure we aim for the highest standards, especially when local standards might be minimalist in terms of benefits to the local society or the environment.
5. Can you proudly tell anyone about the decision? The idea here is that you should have nothing to hide and if investigative reporters or legal entities showed up to ask about the practice, you can readily and honestly reply, “Glad you asked!” You would know your conscience is clear and you have done your best to be honest, forthright and honourable. Some call this the “New York Times Test”. “If you would not feel comfortable with everyone you know reading about what you are currently doing, don’t do it.”
6. Can I put this decision to the same rigour as financial analysis and auditing standards? Everyone in business agrees that financial analysis needs the highest degree of rigour. The annual audit is a common business event. We should strive to be as disciplined morally as we are financially and consciously analyse our actions from a moral perspective the same way we analyse our actions from a financial perspective. Consider writing down the standards you want to practise and use them as principles metrics similar to the regular fiscal evaluation.
Michael Josephson (2010) of the Josephson Institute says, “Ethical executives acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies and their communities.” Every decision and action must demonstrate honesty and integrity. Develop a welcoming attitude to all kinds of audits as they help identify potential shortcomings and develop more robust systems.
7. Have I subjected questions of bribery and extortion to the Biblical test and then contextualised them to the culture of the business? Noonan defines a bribe as “an inducement improperly influencing the performance of a public function meant to be gratuitously exercised” (cited by Yung, 2010, p.16)
- Does a bribe create partiality? The Old Testament commands us to not “show partiality to the poor or favouritism to the great.” (Deut 17: 1). Likewise in the New Testament, “…keep these instructions without partiality, and do nothing out of favouritism.” (I Tim 5: 21). If the activity causes one to be unfairly advantaged or disadvantaged, the decision is likely unethical and unfair.
- Is the activity based on greed and does it oppress the powerless? If a gift or “bribe” causes you to be advantaged and another to wait unfairly, the act has oppressed the powerless and is strongly condemned in the Old Testament (Isa 1: 23; Eccl 7: 7). Friedman (2003) uses the Old Testament to provide principles for businesses such as “Helping the Needy and Powerless”, and “Fair Treatment of Employees”, and “Not Engaging in Dishonesty and Immoral Business Practices.”
- Does the activity clearly result in doing something illegal? While it is difficult to determine what the law really is in many developing countries, it is important to determine some standard to follow through your own research or by following trusted national experts. Take the position that it is never right to sin or disobey a law in order to accomplish a good purpose. When a developing country does not have laws as robust as developed countries, don’t jump at the opportunity to take advantage of lenient local laws but use it as an opportunity to consider what is right and operate accordingly.
- Does the activity “pervert the course of justice” (Prov 17: 23, Ex 18: 21)? Another definition of bribery suggests it is the “bestowing of money or favour upon a person who is in a position of trust (for example a judge or government official) in order to pervert his judgment or corrupt his conduct.” In quoting this Falkiner (1999) states, “Perverting justice through bribery can take the form of paying for an unfair advantage, such as buying entrance to a school that has limited enrolment, or fixing a traffic ticket, or receiving a visa for which one is not qualified. The common denominator is that a perversion of justice has taken place.”
With regard to bribery and extortion, the Bible seems to promote the morality of paying a bribe or giving a gift for something clearly legal or good. Likewise the Bible seems to never condemn giving a bribe though it does clearly condemn taking a bribe. Proverbs speaks positively in terms of gift giving (18: 6, 21: 14). There are cases where gifts (bribes?) are not a way around the law (which is wrong) but an incentive for officials to do their prescribed jobs, or to expedite what they should be doing anyway, or to encourage justice. Bribery in the Old Testament is condemned if it exploits or oppresses the poor. It is condoned if it establishes a relationship. (Adeney, 1995, p.153)
In relationship-based cultures which are poverty stricken, sometimes “bribes” may be helpful to officials who have not been paid for months, and need encouragement to do their rightful job. Clearly there are difficult cultural nuances at play here, and careful study of scripture, the laws and culture are important.
In a relationship culture, gifts can be a way of developing a friendship and working relationship. Many non-western cultures expect an incentive gift as a way of solidifying a relationship and, when not perverting justice, this can be a healthy way of living in a culture. One way to test this would be to ask: can it be given openly as opposed to subtly? “A tip is for proper performance of a job; a bribe causes a person to betray a job.”
“Be wise and give serious thought to the way you live.” (King Solomon in Proverbs 23:19)
Larry Sharp is the Founder and current Director of Strategic Training and Partnerships of IBEC Ventures. Larry served 21 years in Brazil and then 20 years as Crossworld VP of Operations and as Vice President of Business Partnerships. He is currently a VP Emeritus and consultant with Crossworld. Since 2007 he has devoted energies toward Business as Mission (BAM) and currently is a consultant on BAM and education themes. Larry travels within North America and globally speaking and teaching in conferences, colleges and churches on themes related to BAM and missions, crisis preparation and management, and team building.
This article was first published in BAM Think Tank Issue Report: BAM in Hostile Environments (Appendix J). This piece also appears as the In depth Article in the Corruption Toolkit – visit the Toolkit for more practical resources on fighting corruption.
Hill, A. (2008). Just Business. Downers Grove, Illinois: InterVarsity Press. page 14
Wong, K. L. & Rae, S. R. (2011). Business for the Common Good. Downers Grove, Illinois: InterVarsity Press.
Welch, D. ed. (1987). Law and Morality. Philadelphia, PA, Fortress. pp.153-154
Josephson, M. (2010) 12 Ethical Principles for Business Executives. Retrieved from josephsoninstitute.org/business/blog/2010/12
Falkiner, S. (1999). Bribery: Where are the Lines? Evangelical Missions Quarterly, 35(1), pp.22-37
Friedman, H. H. (2003). Creating a Company Code of Ethics: Using the Bible as a Guide. Electronic Journal of Business Ethics and Organizational Studies8(1).
Adeney, B. (1995). Strange Virtues. Downers Grove, Illinois: InterVarsity Press. p.153
Yung, H. (2010). Bribery and Corruption. Singapore: GraceWorks Ltd. p. 16. Yung is the best author on the ethics issue from a non-Western perspective.
Maxwell, J. C. (2003). Ethics 101: What Every Leader should KnowNew York: Center Group. pp. 55-70.