In recent years, more attention has been given to the less than ideal effects that can come as a result of business expanding — especially internationally. The spotlight that’s been put on situations in which businesses seem to take advantage of local populations has left many with a bad taste in their mouth when it comes to businesses expanding into different countries.
While the scrutiny that has come as a result of certain expansions has been beneficial in holding organizations accountable, it has, in some ways, made many feel as if ethical expansion is not possible for businesses.
This is far from the case, and it’s more than possible to expand a business, even internationally, ethically, and respectfully. Gaining insight into how this is possible can give one a more nuanced perspective of the process of business expansions.
The Three Categories of Ethics in Business
When it comes to ethics in business, there are three main types. Being aware of the various types of ethics is important when expanding one’s business into a new country. The three main categories of ethics in business are:
Compliance-based codes: These are typically government regulations that businesses must follow. Failing to follow compliance-based ethics can often result in punishments and legal repercussions.
Value-based codes: This type of ethics revolves around self-imposed rules which reflect the morals of a certain business. It typically promotes putting the public good above a business’s self-interest.
Professional codes: This category of ethics typically refers to trust between various business partners when it comes to fiduciary matters. As such, its function is to make sure that businesses are upholding the interest of their clients rather than themselves.
Establishing Ethics Prior to Expansion
For businesses interested in expanding their business internationally, it’s important to establish a code of ethics before making the expansion. This code can then be made to be a moral compass for those in leadership positions, ensuring that everyone with a position of power involved in the operation is aware of the guidelines for how they should be acting.
While it can be helpful to look to laws around labour and ethics in other countries, this should only act as a starting point. Businesses intent on making a smooth expansion into international countries should strive to go beyond the bare minimum and attempt to make their business a force of good in the country to which they are relocating.
Creating a Culture of Inclusion
Businesses planning on expanding internationally should aim to implement strategies to create a culture of inclusion in the workplace. When this is done, businesses can be sure that they are not alienating anyone in their operations. It is especially important to be inclusive and understanding of the locals in the country to which one is expanding.
When businesses fail to do this, it can result in situations that take on a flavour of ethnocentrism, which is bad for everyone. When businesses make a concerted effort to be inclusive of everyone working in their business, it is far easier to maintain high ethical standards with integrity.
Being Mindful of Cultural Differences
When expanding internationally, businesses should make a concerted effort to be mindful of cultural differences. This is an important part of ethics in international business, and disregarding this practice can result in a number of negative consequences. When businesses disregard cultural differences during expansions, they can create a number of problems for both themselves and the people who inhabit the country they’re expanding into.
This form of expansion makes it clear that a business has no intention of expanding ethically and can bring bad publicity and gain one’s organization a bad reputation. As such, it’s important to act in ways that are sensitive to local customs and attitudes rather than ignoring or disregarding them.
A way to be mindful of cultural differences is to have employees whose role it is to ensure that cultural cohesion happens during an expansion. This individual, or individuals, should speak the native language and be aware of the differences in culture between the expanding business and the locals of a country. Having someone in this role can help businesses expand internationally while maintaining a high ethical standard and integrity.
Vetting International Business Partners
When businesses are considering going into partnerships with international entities, it can be a good idea to vet these partners before moving forward. While companies will typically have reasonable labour laws, they are not always strictly enforced.
As a result, organizations sometimes take advantage of this lack of enforcement and engage in unethical business practices. These practices can range from child labour to employee abuse to having unsafe work conditions.
As such, businesses that don’t vet their potential business partners may be turning a blind eye to unethical conduct. For this reason, vetting partners is an important part of maintaining ethical practices when teaming up with international entities.
Ethical Expansion is Possible
While there have been innumerable examples of organizations expanding internationally in an unethical fashion, this does not have to be the way things are done. Businesses willing to put in the effort have the ability to expand their business internationally ethically and admirably. While it may take more effort, expanding ethically is more than possible when the right steps are taken.
