“Ethical Theory and Business” by Tom L Beauchamp and Norman E Bowie

Read the case study entitled “Foreign Assignment” on pages 621-622 of your text(Ethical Theory and Business -Tom L Beauchamp and Norman E Bowie, 2004).

After the meeting with Sara, Tom Fried emailed you. In the email, he explained the situation and asked your advice. In your email reply back to Tom, address the following:

What obligations do you feel the bank has to ensure that its employees are not harmed, for instance, by having their chances for advancement limited by the social customs of a host country?

What international moral code, if any, is being violated by the Bank?

Has the bank made the correct decision by opting to follow the norms of the host country?

How would you recommend that Tom handle this particular situation?

What steps should the bank take to avoid and resolve situations similar to this in the future when employees are offended or harmed by host country practices?

Foreign Assignment

* What obligations do you feel the bank has to ensure that its employees are not harmed, for instance, by having their chances for advancement limited by the social customs of a host country?

* What international moral code, if any, is being violated by the Bank?

In the case of Sara Strong and the Security Bank of the American Continent, the bank had an obligation to ensure that its employees did not have their chances of advancement limited by the social norms of Mexico. Sara Strong had this right protected under Title VII of the Civil Act of 1964 which prohibits discrimination in employment in any business on the basis of race, color, religion, sex or national origin. Title VII also prohibits retaliation from employers against employees who oppose such unlawful discrimination. Sara Strong’s case is further protected by additions to the statute in 1991 by the U.S Congress which ensure the protection of the citizens against the discrimination of the multinationals of the United States.

Under this statute, it is the obligation of the Security Bank of the American Continent to treat persons assigned for a station in a foreign country the same way as if it were on the American territory. Her rights are also protected by the Universal Declaration of Human Rights as put together by the United Nations under Article 23 section 1, requires that “everyone has the right to work, to free choice of employment, to just and favorable conditions of work …”(U.N General Assembly resolution 217 A (III) of 10 December 1948). Mexico and the United States of America are both member states of the U.N and consequently have pledged to co-operate in the promotion of these rights.

* Has the bank made the correct decision by opting to follow the norms of the host country?

I can see the dilemma that you are in whereby you have to deal with the preference of the bank’s customers and face a possible conflict with Sara Strong with a case where her rights are protected under U.S constitution under Title VII of the Civil Act of 1964 which deals with discrimination in employment and sexual harassment. According to Tom L Beauchamp and Norman E Bowie in Ethical Theory and Business, a multinational corporation has four options when the norms of the home country come into conflict with those of the host country, in this case the U.S and Mexico respectively.

These four options described above are, (1) to be patriotic and follow the norms of the home country, (2) to show respect to the host country’s norms by following their norms, (3) adopt whichever norm maximizes profit for the company, and (4) to do what is morally right by following whichever norm is morally best (Ethical Theory and Business -Tom L Beauchamp and Norman E Bowie, 2004). Of the four options, I believe none is better or stronger than the other but adopting any one of these options comes with consequences. I also believe it is the duty of any company adopting any of these practices to measure the consequences, any risk factors and possibly create an avenue to minimize any damages resulting from such policies.

* How would you recommend that Tom handle this particular situation?

Given these options, it is hard to determine which option is correct or incorrect but without considering other factors, it can be said that the Security Bank of the American Continent did not have a choice but to follow the norms of the host country in order to retain its customers and remain profitable. With this in mind, Ms Strong should have been informed of the moral and social requirements of working in that country and ideally given the choice for a similar position with equal reimbursement at a location whereby factors such as gender inequality are not tolerated or culturally accepted. U.S Supreme Court recommends mediation and arbitration to resolve conflicts when there is a difference in the discrimination law of use in The United States and that of other countries (Business & Economic Review/Oct.-DEC, 93 – Anita Cava and Gift Meyer). The Security Bank of the American Continent and Sara Strong can sign an agreement to show which country’s law is applicable in this conflict.

* What steps should the bank take to avoid and resolve situations similar to this in the future when employees are offended or harmed by host country practices?

A Code of Ethics is a business or an organization’s policy applicable to all its activities and relationships. It should identify principal responsibilities its stockholders, shareholders, employees and communities. Its main function is to provide guidance in cases of moral dilemmas. Many corporations have implemented codes of conduct that define unacceptable behavior and serve as a guideline for the practice of ethical conduct. This is a step in the right direction, but it is not enough for an organization merely to have written codes of ethics. Many business organizations are also taking a more proactive position in the area of promoting the practice of ethical behavior. For the Security Bank of the American Continent I believe it would be in its interests to implement a training program for employees working abroad to show the cultural differences of other countries as compared to America in a bid to prepare the employees to work in foreign countries.

I also believe that in as much as the bank has a commitment towards its customers, it also has a similar commitment towards its employees. It is therefore the responsibility the bank to try to bridge the gap between the social and cultural norms of the host country and those of the home country which the bank’s employees follow and were raised with. The bank should train the female employees in a manner that when clients are conducting business with them that they can sense and see the power and authority of the female employees. Though it may be hard for the clients to accept or acknowledge the authority of a woman and choose to bypass her for a male employee, in this case the male employee can act as liaison while the female employee continues to work with the client. Over time, the client will come to appreciate that female employees have as much power and authority as their male counterparts and can perform the job with the same effectiveness and ability.

References:

I. Gender Abroad Discrimination”- Business & Economic Review/Oct.-DEC, 93 Anita Cava and Gift Mayer

II. Ethical Theory and Business -Tom L Beauchamp and Norman E Bowie, 2004

III. Universal Declaration of Human Rights retrieved on 09/30/09 from http://www.un.org/Overview/rights.html

IV. Civil Act of 1964 retrieved on 09/30/06 from http://usinfo.state.gov/usa/infousa/laws/majorlaw/civilr19.htm

V. “Enforcing U.S. Anti-Bias Laws Abroad Brings Up Delicate Issues” By Brian Knowlton, International Herald Tribune 02/05/1996

VI. “The extraterritoriality issue: a Title VII case study” Janice R. Franke, Maria Whittaker; American Business Law Journal, Vol. 30, 1992