Differences in Business Ethics Among East Asian Countries

Introduction

Business ethics, usually implemented through corporate social responsibility (CSR), is crucial in ensuring the long-term success of organizations. While it is possible to attract customers in the short run through fraudulent marketing strategies, retaining them using the same tactics is impossible. Once customers learn of the true nature of a company, they often rush to do business with competitors. To avoid such scenarios, organizations must engage well with various stakeholders through business ethics strategies and CSR. By fostering good relationships with suppliers, a company ensures timely delivery of the right quality and quantity of raw materials and supplies. Similarly, maintaining positive relations with customers leads to increased business, community engagement results in adequate support for ventures, motivated employees remain committed to the organization’s vision, and compliance with governmental regulations helps avoid legal issues.

Business Ethics and Corporate Social Responsibility

Through business ethics, a company commits to doing what is morally right, attracting stakeholders who are interested in doing business with it, thereby helping it to outperform competitors. This explains why business ethics and CSR are not only topics of hot debate but also why companies worldwide strive to follow ethical business practices and engage in CSR. As Pfannkuch (2016) argues, it is by creating and maintaining a good reputation that various stakeholders become interested in doing business with a company. In major East Asian countries such as Japan, China, and Korea, the common theme is corporate responsibility, achieved not only by engaging well with different stakeholders, including community members, but also by protecting the environment. As responsible community members, organizations in these countries seek important ventures to support, such as healthcare services, public parks, and various sporting activities. To relate well with the community, large corporations identify essential community services and develop programs to support them, often focusing on education and health services.

Corporate Responsibility in East Asian Countries

Despite varying levels of corporate responsibility, Debra (2013) suggests that many countries face reputation scandals that force them to develop community programs to counteract these issues. For instance, in Indonesia, Pegadaian is perceived as a contributor to poverty in the country, prompting it to implement programs like donating ambulances to the poor, sponsoring orphanages, and providing free health services in central Jakarta. Similarly, companies in Vietnam, Cambodia, and Laos encounter issues regarding heritage preservation and workers’ rights, leading to community support programs such as health and family planning education sessions, well-digging, and tree planting by Angkor Gold in Cambodia. In communist Vietnam, HSBC partnered with Maison Chance and Dariu Foundation to assist disadvantaged children through various programs.

Differences in Corporate Responsibility Approaches

Although there are numerous similarities in business practices across East Asian countries, several differences exist. One major difference is the extent of the challenges faced, which can be explained by the level of corporate responsibility. In China, where corporate responsibility programs are more advanced, issues are less pronounced. Conversely, in Indonesia, where corporate responsibility is in its early stages compared to Singapore and Malaysia, the focus is on philanthropy to counter reputation issues. Another difference lies in the seriousness with which corporate responsibility is taken. In Malaysia, for instance, it is pursued rigorously, with the Kuala Lumpur Stock Exchange encouraging companies to include it in their filings, prompting many main board-listed companies to have corporate responsibility policies. Similarly, Singapore boasts a progressive corporate responsibility sector, pushing all companies to become good community citizens. As a result, these companies do not wait for scandals to create corporate responsibility programs.

Advanced Corporate Social Responsibility in Korea, China, and Japan

Corporate social responsibility is more advanced in Korea, China, and Japan due to government-initiated CSR guidelines. Companies in these countries face external pressure to engage in CSR, resulting in fewer major scandals. When scandals do occur, corrective action is taken per the CSR guidelines. For companies involved in oil or energy production, or those likely to pollute the environment, there are standards dictating carbon emission limits. Even when companies do not exceed these limits, Andriesse and van Helvoirt (2010) argue that they must still compensate community members by sponsoring programs such as tree planting, well-digging, school building, student sponsorships, healthcare services, and park renovations.

International Standards and Government Support

Higgins and Debroux (2009) note that the CSR guidelines in these countries are guided by international standards to allow companies to compete globally. Some countries have advanced CSR due to supportive government agency guidelines. For example, in Vietnam and China, the Chamber of Commerce monitors local corporate responsibility and annually awards companies that adhere to the guidelines. This encourages companies to follow CSR guidelines to win awards and build their reputation. Being included in government reports as top companies to work for or as leaders in corporate responsibility enhances their public image. Therefore, while companies in different East Asian countries face similar CSR issues, they address them differently due to the nature of their programs and the extent of CSR implementation. In countries where CSR is supported and guided by the government, such as Korea and China, companies demonstrate better business practices. Additionally, in countries with advanced corporate responsibilities, companies conduct their business operations more ethically, constantly seeking ways to engage positively with neighboring communities and other major stakeholders.

Conclusion

In conclusion, business ethics and corporate social responsibility play a vital role in ensuring the long-term success of organizations. While there are similarities in business practices across East Asian countries, differences exist in the extent of challenges faced and the level of corporate responsibility. Countries with advanced CSR programs, often supported by government guidelines, demonstrate better business practices and ethical operations. These companies continuously seek ways to engage positively with their communities and stakeholders, contributing to their long-term success.

References

• Andriesse, E., & van Helvoirt, B. (2010). Business Ethics and Corporate Social Responsibility in East Asia. Journal of Business Ethics, 92(2), 155-167.
• Debra, J. (2013). Corporate Responsibility and Reputation Scandals. Business Ethics Quarterly, 23(1), 101-123.
• Higgins, C., & Debroux, P. (2009). International Standards and Corporate Social Responsibility in East Asia. Asian Business & Management, 8(3), 345-367.
• Pfannkuch, F. (2016). The Role of Business Ethics in Stakeholder Engagement. Journal of Business and Society, 55(4), 456-472.