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Differences in Business Ethics Among East Asian Countries

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Business ethics usually implemented through corporate social responsibility is very important in ensuring long-term success of organizations. While it is possible to attract customers in the short run through fraudulent marketing strategies, it is impossible to retain them using the same. Immediately they learn of the true image of the company, customers rush to do business with competitors. To avoid such scenarios, organizations are forced to relate well with various stakeholders through business ethics strategies and corporate social responsibility. By relating well with suppliers, a company is assured of timely delivery of right quality and quantity of raw materials/ supplies. In the same manner, relating well with customers leads to increased business, community results to adequate support in its ventures, employees means highly motivated workers committed to the organization’s vision, and the government leads to avoidance of legal issues.

Through business ethics, a company benefits in the sense that it is committed to doing what is morally right. This way, stakeholders are interested in doing business with the company helping it beat competition. This explains why business ethics and corporate social responsibility are not only topics of hot debate but also why companies in all countries are striving to following ethical business practices and engaging in corporate social responsibility. This is based on the argument by Pfannkuch (2016) that it is after creating and maintaining good reputation that different stakeholders would be interested in doing business with a certain company. It is notable that the common theme in the major countries in East Asia including Japan, China, and Korea is based on corporate responsibility. This is done not only by relating well with different stakeholders including the community members but also protecting the environment. As good community members, organizations in these countries look for important ventures to support. These are ventures that would benefit the public including healthcare services, public parks, and supporting different sporting activities. In order to relate well with the community, the big corporations identify the most important services in the community and come up with programs to support them. This is usually in provision of education and health services.

Even though at different levels of corporate responsibility, Debra (2013) argues that many of the countries are affected by reputation scandals that force them to come up with community programs to counter this. For instance, in Indonesia, while Pegadaian is seen as the cause of poverty experienced in the country, it has come up with programs to fight these arguments including an ambulance donated to the poor, sponsoring three orphanages, and free health services in central Jakarta. In a similar manner, companies in Vietnam, Cambodia, and Laos are faced with issues of preservation of heritage and workers’ rights. This leads to community support programs including health and family planning education sessions, digging wells, and plating fruit trees by Angkor Gold in Cambodia. In communist Vietnam, HSBC partnered with Maison Chance and Dariu Foundation to help disadvantaged children via various programs.

Even though there are numerous similarities in business practices across East Asian countries, there are a number of differences as well. Among the major differences is the extent of the faced challenges, which can be explained by the level of corporate responsibility. Since this is the reason even though issues are faced in China, they are less pronounced because of the advanced corporate responsibility programs. On the contrary, with corporate responsibility being in its earlier stage in Indonesia compared to Singapore and Malaysia, more focus is on philanthropy. This is the reason in countries like Indonesia, initiated programs are meant to counter reputation issues. Another difference is seen in terms of the seriousness of corporate responsibility. In Malaysia, for instance, corporate responsibility is taken with a lot of seriousness. As a result, it is pushed for by the Kuala Lumpur stock exchange encouraging companies to include it in their filings. This has prompted many main board-listed companies in the country to have corporate responsibility policies. Similarly, Singapore has a progressive corporate responsibility sector pushing all company to look for ways of being good community citizens. As a result, such companies do not wait for scandals in order to create corporate responsibility programs to counter them.

It is also notable that corporate social responsibility is more advanced in Korea, China, and Japan because of the initiated government CSR guidelines. All types of companies in these three countries experience external pressure pushing them to engage in CSR. This is the reason companies in these countries do not have major scandals and in case they do, they have to engage in corrective action as per the given CSR guidelines. For the companies involved in oil/ energy production or likely to pollute the environment, there are standards dictating the limit of carbon emissions. Even when such companies do not exceed such limits, Andriesse and van Helvoirt (2010) argue they still have to compensate the community members by sponsoring community programs such as tree planting, digging wells, building schools, sponsoring students, providing health care services (building healthcare centers), and cleaning or renovating parks. When coming up with government CSR guidelines in these countries,

Higgins and Debroux (2009) note that they are guided by international standards in order to allow companies compete internationally. It is also notable that some countries have advanced CSR because of the supportive guidelines by government agencies. A good example is the case of Vietnam and China where the Chamber and Commerce monitors the local corporate responsibility and awards annually companies that adhere to the given guidelines. This way, companies are encouraged to follow the CSR guidelines to not only win the awards but also build their reputation. Once they are included in government reports as the best companies to work for or the best in terms of corporate responsibility, they have a positive public image. It is therefore arguable that even though suffering from similar CSR issues, companies in different countries in East Asia address them differently because of the nature of the initiated programs and the extension of CSR. For countries in which CSR is supported and guided by the government such as in Korea and China, companies have better business practices. In addition, in countries in which there are advanced corporate responsibilities, companies conduct their business operations more ethically. Such companies do not react to scandals but always look for ways of relating well with their neighboring communities among other major stakeholders.

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