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Business Honzons (201 1) 54, 315—324 wwwv. elsevier. com/locate/bushor Engaging values in international business practice Sandra L. Williams College of Education, University of Illinois, 131 0 S. Sixth Street, Champaign, IL 61820, U. S. A. KEYWORDS International business; Ethics; Cross-cultural; Work values; Organizational strategy Abstract Managerial business arena have countries. The need f practice has been hei 8 Swip view nent page in the international ss cultures and s in business usiness scandals and ethical managerial lapses that have violated public trust.
Global businesses can Offer practical guidance and set ethical xamples for others to follow by establishing corporate values beyond written business codes. Four key work values (Honesty, Fairness, Concern of Others, and Achievement) known to be present in businesses across cultures, are put forth as a baseline start for multinational corporation leaders. Offered is a process for making the core values unique to an organization, and for adopting and training managers in the use of core values. Presented is evidence of managerial implementation of the core work values, and managers’ alignment of work values with organizational strategies. addressing the values and principies of their workplaces, international businesses can achieve cross- cultural ethical practices, managerial alignment, and global social responsibility. # 2011 Kelley School of Business, Indiana constantly face professlonal decisions that have ethical implications related to organizations, employees, and customers (Tepper, 2010). As organizations expand and conduct business globally, those decisions affect a broader marketplace and a more diverse employee population.
On What basis can managers make professional decisions that honor diverse cultures, yet uphold thical business standards? How can managers know E-mail addresses: slwillims@illinois. edu, slwilliamsphd@aol. com What is right? What professional standards can be referenced when ethical decisions are not clearcut? Recent changes in international markets and networking technology have led to an explosion of corporations with global operations (Asgary & Mitschow, 2002). The need for global guidance on ethical business practices has grown commensurately.
This article suggests the engagement of workplace values as a practical guide to ethical decisions by managers. Examples of individual managers erspectives on workplace values within multinational business settings are provided. Also outlined is a process for determining, adopting, and reinforcing workplace values for managers operating in diverse business organizations. 0007-6813/$ — see front matter # 2011 Kelley School of Business, ndiana University. AII rights reserved. doi:10. 1016/j. bushor. 201 1 . 02. 004 316 S. C. Williams the development of the organizational forms of the future.
Corporate values and the corporate expectations of managerial and employee conduct can be expressed in a policy document identified as a corporate code of ethics (Cressey & Moore, 1983), a code of conduct (White & Montgomery, 1980), or a business code (Kaptein, 2004). The latter defines the conduct a corpora 28 & Montgomery, 1980), or a business code (Kaptein, 2004). The latter defines the conduct a corporation expects of its employees (Kaptein & Wempe, 2002) and clarifies the norms and values the organization upholds (Kaptein, 2004).
In a study of the business codes of 200 multinational corporations, Kaptein (2004, p. 29) concluded that on paper, many companies “have an eye for responsible treatment [sic] along with the principles of values nd norms that ground sound conduct,” but that the content of corporate business codes was highly varied. While organizations may explicitly state expected behaviors and ethical actions in business codes, a key factor in implementing any code is an environment that encourages employees to observe the code (Benson, 1989; Kaptein, 2004).
Values at the organizational level are influenced not only by the content of each organization’s respective business code, but also by the process through which the code is established and institutionalized (Kaptein, 2004). Without clear expression regarding the extent to which the usiness code denotes actual ethical behavior, implementation can be influenced by a corporate desire to be politically correct or to meet minimum regulatory standards (Sekerka, Bagozzi, & Chamgo, 2009).
Organizational values for purposes of establishing written business codes have been identified as lists of generic beliefs regarding people, competitiveness, customers, quality, and productivity (Humble et ala, 1994) that a variety of individuals can agree with and which do not offend. Donaldson (1996) reported that of all Fortune 500 companies have codes of conduct, and 70% have statements of visions and values. The Better Business Bureau of Chicago and Northern Illinois, have statements ofvisions and values.
The Better Business Bureau of Chicago and Northern Illinois, however, discovered that less than 32% of its surveyed business members provided any training on values or ethical behavior to employees or managers (T. C. Joyce, personal communlcation, September 14, 2010). Typical organizational values such as having integrity, providing high quality, being mindful of diversity, and achieving a profit have become standards of service for businesses. These are not true values because such lists do not guide ethical manager behavior r employee action; rather, they only reflect a performance benchmark or service standard.
Two decades ago, Nash (1 991 ) declared that the topic of business ethics and the need for managerial guidance on ethlcal decision-making would be 2. Prior research advances understanding of work values Over the last 25 years, research has significantly increased our understandlng of individual workplace values (Agle & Caldwell, 1999), and there continues to be research interest in the role values play for persons and organizations (Agle & Caldwell, 1999; paliding, 1 965; Mumford, Heiton, Decker, Shane connelly, &
VanDoorn, 2003). Workplace values have identifiable importance because they determine, regulate, and modify relations between individuals, organizations, and institutions (Agle & Caldwell, 1999). n particular, discernible research progress has been made to more clearly define and understand both individual work values (Meglino et al. , 1989; Meglino, Ravlin, & Adkins, 1989, 1991; Ravlin & Meglino, 1987a, 1987b, 1989) and the values an individual employee holds (Conner & Becker, 1979).
Individual work values have been found to influence job satisfaction (Megl 4 28 (Conner & Becker, 1979). Individual work values have been found to influence job satisfaction (Meglino et al. , 1989), organization commitment by individuals (Posner & Schmidt, 1 993), and satisfaction with a leader (Meglino et al. , 1991). Work values as useful ethical decision-making critena at the individual level and in guiding ethical behavior choice (Akaah & Lund, 1994; Singhapakdi & Vitell, 1993), particularly a manager’s decisions of integrity (Mumford et al. 2003), have also been identified. At the organizational level, culture has long been recognized as closely related to values (Agle & Caldwell, 1999; Conner & Becker, 1979; Deal & Kennedy, 1982; Goshal & Bartlet, 1997). Schein (1985) discussed organizational culture as the existence of shared meanngs, beliefs, and values, with values at the core; further, Tichy (1982) defined organizational culture as shared values.
Work values that are shared by employees have been linked to organizational performance (Deal & Kennedy, 1 982; Hambrick & Brandon, 1 988), organizational commltment (Posner & Schmidt, 1993), and organizational strategy (Humble, Jackson, & Thomson, 1994). Waddock, Bodwell, and Graves indicated that “interest in corporate social responsibility, sustainable business ractice, corporate governance, business ethics, and compliance management has grown markedly in the past decade” (Kaptein, 2004, p. 13).
Corporations have acknowledged the need to pay greater attention to the norms, values, and principles of their workplaces in order to achieve social responsibility recognition and sustainability. Research suggests that, as Agle and Caldwell (1999) indicate from their review of literature on the subject, work values continue to be an important c from thelr review of literature on the subject, work values continue to be an important construct not only in understanding he organizational contexts of the past, but also in influencing Engaging values in international business practice ongoing.
Despite continued efforts, managerial behavior reflecting unethical practices has actually become more frequent (Tepper, 2010). Interest in the practice of workplace values has been heghtened by major business scandals and ethical executive lapses that have violated the public trust (e. g. , Enron, WorldCom, AIG Insurance, Fannie Mae). These events indicate that business leaders have not accurately addressed expected ethical behavior in the workplace, yet values are clamed to permeate and nfluence every stage ofthe business process (Humble et al. 1994). While values are generally found to impact organizational practices such as commitment by managers (Posner, Kouzes, & Schmidt, 1985) or Job perceptions (O’Reilly, Chatman, & Caldwell, 1991 specific influences and findings are inconclusive (Agle & Caldwell, 1999) because measurement of values has been dificult (Ravlin & Meglino, 19875) and values have multiple effects simultaneously (Agle & Caldwell, 1999). 317 culture of the global organization (Humble et al. , 1994), little has been done to make work values operative at a practical level.
The importance of clear corporate values to business success also resonates with MNC business leaders because the culture on which values are based is seen as a vital influence on strategy implementation (Humble et al. , 1994). Organizations and firms that align their business strategies with strong work values in very deliberate, explicit, and regular ways can clarify the ethical le 6 with strong work values In very deliberate, explicit, and regular ways can clarify the ethical level of expected business actions for a global workforce (DeGeorge, 1993) and move multicultural rganizations toward success (Humble et al. 1994). The recent business fascination with strategy, visioning, and change unfortunately fed the mistaken belief that developing exactly the right strategy would enable a company to compete globally without regard to diverse MNC values and practices. To compete effectively, plans need to be executed, and an effective way to execute the plan is to get people on the same behavior pattern based upon common values (Humble et al. , 1994). However, managerial practices have not been found to address the interactions of multinational employee behaviors, attitudes, or alues (Choy, 2007).
Many of today’s business leaders do not know houv to approach values to address executing a business plan in an international environment. 3. Current value practices Today, managerial actions and decision techniques increasingly cross national borders and cultural boundaries (Bowring, 1993; Choy & Lee, 2009). Changes in internatlonal markets have led to an explosion of corporations with global operations, and subsequently the need for a global model of international business ethics (Asgary & Mitschow, 2002) and international business codes (Kaptein, 2004).
Companies that operate across orders have traditionally brought the culture and history of their home operations into the international arena (Holden, 2001 More recently, the employment of local and foreign staff has transformed the demographic profile of the multinational corporation (MNC) workforce into one characterized by multiculturalism and of the multinational corporation (MNC) workforce into one characterized by multiculturalism and diversity.
This demographic change has had significant implications for management practices because of the interaction of employee behavior and values (Choy, 2007; Choy & Lee, 2009). Thus, todays corporate cultures consist of historical work values (Holden, 2001), the values and beliefs of multicultural members of the work team (Choy & Lee, 2009), and the organizational visions for future success (Humble et al. , 1994). Yet, ethics education and ethlcs training in multinational organizations continue to focus on regulations and enforcing compliance (Sekerka et al. 2009), rather than determining and engaging common values and beliefs. While international business leaders recognize that definng and implementing corporate work values is a top priority, and a vital influence on the ethical . Values In operation at work Values in a collective state within societies, or terminal values, are desirable end-states of existence for humankind that manifest themselves in the collective good; such as equality, safety, wisdom, peace, and freedom (Rokeach, 1973).
Values in an instrumental state, unlike those in a collective condition, are not end-states of benevolence and welfare, but modes of behavior that guide a person’s choice of action (Rokeach, 1973; Schwartz, 1992). For individuals, thinking about personal values IS a result of learning, inspiration, and personal experience (Rokeach, 1973). For business managers, thinking about values is likewise shaped by ethics training programs, professional work experiences, and the explicit expectations of the organization as wrltten in a business code of conduct.
Work values are speci explicit expectations of the organization as wrltten in a business code of conduct. Work values are specific individual behavior guides important to interpersonal stability when compared to an alternative; for example, acting responsibly vs. irresponsibly on the job. By providing a standard for selecting a behavioral course of action, work values in an organization influence individual erformance decisions (Ravlin & Meglino, 1987a).
Values important to any work environment 318 are modes of behavior that foster productivity because values imply standards of competence and expectation (Schein, 1985). Individuals are better able to predict performance and productivity behaviors of others at work when work values are known and shared (Posner & Schmidt, 1993). Work values have also been linked to individual ethical decision-making (Akaah & Lund, 1994) and have been cited as positively related to ethlcal decisions by managers (Mumford et al. 2003). Most cholars agree that discretion represents a key aspect of the role of manager (Mumford et al. , 2003), with managers expected to choose among alterative courses of action to address the percelved needs of the collective group (Mumford & Connelly, 1991 By providing standards for evaluating alternative courses of action (Ravlin & Meglino, 1987a), work values influence managerial decisions (Ball-Rokeach & Loges, 1994), including managers’ ethlcal decisions (Mumford et al. , 2003).
Work values, therefore, have become a central construct in the understanding of business as a collective group outcome (Agle & Caldwell, 999) and been noted as a key determinant of ethics in business decisions by managers (Mumford et al. , 2003). S. C. Williams fairness and respect for S. C. Williams fairness and respect for others, yet recognize that the roots of any economic system need to be based upon fundamental human values. Drawing upon a literature survey and class discussions, Asgary and Mitschow (2002) designed an International Business Code of Ethics that consists of 16 principies. ese include, but are not limited to, the following: Trust; Fairness; Do not cheat; Honesty; Full disclosure; Responsibility; Respect for national sovereignty; Support for conomic goals of the host country; Respect for social and cultural values and traditions; Respect for human rights and fundamental freedoms; Provide equal opportunity; Uphold integrity of your company; Be respectful to every person contracted; Uphold environmental laws and regulations; Be fair and take action not to discriminate; and Honor contracts, agreements, and assigned responsibilities.
These principles mlx the characteristics of human values with both business values and commercial/legal directives for business operations in an international environment. While a recommendation was made o put policies and procedures in place that addressed these principles and directives (Asgary & Mitschow, 2002), the link between human values and business code directives or behavior requirements was not identified.
Indeed, many businesses confuse codes of conduct with core values and ethics (Donaldson, 1996; Kaptein, 2004), and assume that codifiying expectations results in employee behavior. The studies of Meglino and colleagues have revealed important individual work values. Ravlin and Meglino (1989) cite Cornelius, Willman, Meglino, Czajka, and McNeely as the basis for several subsequent studie 0 DF 28