LDR 6135 Paper One Case Analysis of Values in Tension Article

Running Head: Case Analysis of Values in Tension Ethics Away from Home Article

Case Analysis of the “Values in Tension: Ethics Away from Home” Article

Ardavan A. Shahroodi

Northeastern University

LDR 6135 The Ethical Leader

Dr. Hernan Murdock

Thursday, October 2, 2014

Case Analysis of Values in Tension Ethics Away from Home Article

Introduction

The “Values in Tension: Ethics Away from Home” (Donaldson, 1996, pp. 48-62) article

creates an ethical universe for managers and leaders composed of “core human values” (pp. 52-

54). These values that are concerned with “respect for human dignity” (Donaldson, 1996, p. 54),

“respect for basic rights” (p. 54) and “good citizenship” (p. 54) will guide managers and leaders

in making ethical decisions in host communities and countries away from familiar surroundings.

However, ethical decision making and behavior is also depended on organizational cultures

where leaders conduct themselves in an ethical fashion and standards of conduct are clear and

specific. All the same, Donaldson (1996) emphasizes that the intention to engage in ethical

conduct must also be accompanied with a genuine respect for the culture of the host community

and country in order to remain effective in view of the challenges that will be presented to the

organization.

The Key Lessons Learned from the Article

The “Values in Tension: Ethics Away from Home” (Donaldson, 1996, pp. 48-62) article

analyses the ethical dilemmas that companies/organizations experience when operating in

foreign lands. These ethical dilemmas present themselves when “familiar laws and judicial

procedures that define standards of ethical conduct” (Donaldson, 1996, p. 48) are either missing

or dissimilar to one’s own country of origin. These dissimilarities may be rooted in the host

country’s particular approach towards the importance of protecting “civil and political rights”

(Donaldson, 1996, p. 48), upholding non- “discriminatory employments practices” (p. 48) and

observing “environmental…health” (p. 48) or safety standards. Here, the challenge for

companies becomes the adoption of the types of “principles that can help them work through the

maze of cultural differences and establish codes of conduct for globally ethical business


practice” (Donaldson, 1996, p. 48). This challenge is also frequently related to operational

conditions where the “host country’s ethical standards seem lower than the home country”

(Donaldson, 1996, p. 48). Donaldson (1996) observes that hypothetically there are two

traditional philosophical approaches that companies may rely on to formulate organizational

practices that would guide them in coming to term with the aforementioned challenges.

Donaldson (1996) refers to the first approach as the “cultural relativism” (p. 48) mode of analysis

where a company resigns itself to the mindset that “no culture’s ethics are better than any

other’s; therefore there are no international rights or wrong” (p. 48). As an example, in this

scenario, activities such as “bribery…insider trading” (Donaldson, 1996, p. 48) or conducting

business in an environmentally irresponsible manner are not viewed as “morally repugnant” (p.

48). Rather, cultural relativism accepts the view that “when in Rome, do as the Romans do…

especially when failing to do as the locals do means forfeiting business opportunities”

(Donaldson, 1996, p. 48). The factors that worsen the ethical character of these environments

may also have to do with a “combination of ineffective enforcement and inadequate

regulations… [that lead] to behavior by unscrupulous companies that is clearly wrong”

(Donaldson, 1996, p. 48). Donaldson (1996) rejects a culturally relativist ethical disposition and

holds that “there are fundamental values that cross cultures, and companies must uphold them”

(Donaldson, 1996, p. 49). On the other extreme of ethical world view, very much distinct from

cultural relativism, Donaldson (1996) brings attention to what he labels as “ethical imperialism,

which directs people to do everywhere exactly as they do at home” (p. 49). Donaldson (1996)

contends that ethical imperialism is supported by the theory of “absolutism, which is based on

three problematic principles” (p. 49). First, absolutists argue that “there is a single list of truths”

(Donaldson, 1996, p. 49) rejecting the posture “that different cultural traditions must be


respected” (p. 49). Secondly, absolutists hold that the aforementioned list of truths “can be

expressed only with one set of concepts” (Donaldson, 1996, p. 49) such as “the language of basic

rights” (p. 49) thereby failing to adequately appreciate that “we all learn ethics in the context of

our particular cultures, and the power in the principles is deeply tied to the way in which they are

expressed” (p. 52). Thirdly, absolutists “call for exactly the same behavior around the world”

(Donaldson, 1996, p. 49) and believing in a “global standard of global behavior” (p. 52)

neglecting to acknowledge that “context must shape ethical practice” (p. 52). Donaldson (1996)

observes that “cultures have different standards of ethical behavior—and different ways of

handling unethical behavior” (p. 52) and consequently “there is no international consensus on

standards of business conduct” (p. 52).

The remedy that may rectify the aforementioned ethical dilemma, Donaldson (1996)

proposes, is in companies assisting “managers distinguish between practices that are merely

different and those that are wrong” (p. 52). Here, he emphasizes that “for relativists, nothing is

sacred and nothing is wrong…For absolutists, many things that are different are wrong”

(Donaldson, 1996, p. 52). Both these postures are inherently inadequate in truly understanding

the “real world of business decision making” (Donaldson, 1996, p. 52). In exchange, what

Donaldson (1996) calls for are three overarching principles that must shape ethically oriented

business decision making. The first principle is “respect for core human values, which determine

the absolute moral threshold for all business activities” (Donaldson, 1996, p. 52). The second

principle resides in “respect for local traditions” (Donaldson, 1996, p. 52) and the third principle

promotes the “belief that context matters when deciding what is right and what is wrong” (p. 52).

Donaldson (1996) holds that ethical behavior must take into account a genuine respect for

“differences…respect for local traditions” (p. 53) as distinct from a culturally relativist position


since “some activities are wrong no matter where they take place” (p. 53) such as recklessly

contaminating the environment. In endeavoring to describe the principle of core human values

such as the “Golden Rule” (Donaldson, 1996, p. 53) which Donaldson (1996) believes must

“define minimum ethical standards for all companies” (p. 53), he asserts that “despite important

differences between Western and non-Western cultural and religious traditions, both express

shared attitudes about what it means to be human” (p. 53). Here, Donaldson (1996) utilizes John

Rawls’ (1971) notion of “overlapping consensus” (as cited in Donaldson, 1996, p. 53) to observe

that in evaluating various cultural traditions “seemingly divergent values converge at key points”

(p. 53). The resulting analysis point towards the understanding that all cultural traditions accept

the core human value that “individuals must not treat others simply as tools; in other words, they

must recognize a person’s value as a human being” (Donaldson, 1996, p. 53). Donaldson (1996)

calls this core human value as the “respect for human dignity” (p. 54). In addition, Donaldson

(1996) argues that a second core human value is the imperative that “individuals and

communities must treat people in ways that respect people’s basis rights” (p. 53). Furthermore,

Donaldson (1996) introduces the core human value of “good citizenship” (p. 54) emphasizing

that “members of a community must work together to support and improve the institutions on

which the community depends” (p. 53). Donaldson (1996) states that the aforementioned core

human values must be regarded by companies as an organizing set of platforms where they may

“formulate and evaluate standards of ethical conduct at home and abroad” (p. 54). However, he

asserts that companies must create “specific guidelines” (Donaldson, 1996, p. 54) on

expectations for ethical conduct that will “translate core human values into core values for

business” (p. 54). Accordingly, companies are able to “respect human dignity by creating and

sustaining a corporate culture in which employees, customers, and suppliers are treated not as


means to an end but as people whose intrinsic value must be acknowledged, and by producing

safe products and services in a safe workplace” (Donaldson, 1996, p. 54). Core human values

also require that companies “respect basic rights by acting in ways that support and protect the

individual rights of employees, customers, and surrounding communities, and by avoiding

relationships that violate human beings rights to health, education, safety and an adequate

standard of living” (Donaldson, 1996, p. 54). Lastly, core human values necessitate that

companies act as good citizens in “supporting essential social institutions such as the economic

system and the education system, and by working with host governments and other organizations

to protect the environment” (Donaldson, 1996, p. 54). The aforementioned core values must act

as a “moral compass for business practice” (Donaldson, 1996, p. 54) that will distinguish

“acceptable” (p. 54) behavior from “intolerable” (p. 54) conduct such as “dumping pollutants…

lying about product specifications” (p. 54) or utilizing forced labor.

Donaldson (1996) emphasizes that the realization of ethical business conduct on the

organizational level is facilitated only when managers are “guided by precise statements that

spell out the behavior and operating practices that the company demands” (p. 54). However, in

realizing an ethical business culture, it is not sufficient to merely possess “statements of values

and codes of conduct” (Donaldson, 1996, p. 55), rather “living up to them…when the temptation

to behave unethically is strongest” (p. 55). This requires codes of conduct that are “explicit…

but…also leave room for a manager to use his or her judgment in situations requiring cultural

sensitivity” (Donaldson, 1996, p. 56). Donaldson (1996) cites the example of Motorola whose

code of conduct states that, “Employees of Motorola will respect the laws, customs, and

traditions of each country in which they operate, but will, at the same time, engage in no course

of conduct which, even if legal, customary, and accepted in any such country, could be deemed


to be in violation of the accepted business ethics of Motorola or the laws of United States

relating to business ethics” (p. 56). Donaldson (1996) argues that the adoption of statements of

values must only be regarded as an initial stage in bringing about an ethical business climate to

be followed by leaders referring “often to their organization’s credo and code and must

themselves be credible, committed, and consistent” (p. 56). Most importantly, organizational

leaders must act in ways “as though ethics…matter” (Donaldson, 1996, p. 56) and only then

“company’s employees” (p. 56) understand and behave in a similar fashion.

Donaldson (1996) proposes that ethical judgment must also take into account the need to

come to terms with “moral ambiguity” (p. 56) in situations where Thomas Dunfee refers to as

“moral free space” (as cited in Donaldson, 1996, p. 56). In these cases, “managers must chart

their own courses—as long as they do not violate core human values” (Donaldson, 1996, p. 56).

Nevertheless, Donaldson (1996) strongly argues that the act of “bribery” (p. 58) must always be

understood as unethical on the basis that it “undermines market efficiency and predictability,

thus ultimately denying people their right to a minimal standard of living” (p. 58) in addition to

the very fact that it “undermines essential social and economic systems” (p. 58). In a powerful

statement, Donaldson (1996) asserts that “some degree of ethical commitment—some sense that

everyone will play by the rules—is necessary for a sound economy” (p. 58). Irrespective of the

issue of bribery, Donaldson (1996) holds that managers must learn to “distinguish a value in

tension with their own from one that is intolerable” (p. 58) in environments where “the host

country’s ethical standards not only are different but also seem lower than the home country’s”

(p. 58). On occasion this is a conflict that Donaldson (1996) labels as a “conflict of cultural

tradition” (p. 58) rooted frequently on “strongly held religious and cultural beliefs… [and] not

likely to change (p. 58). In other situations, “ethical standards” (Donaldson, 1996, p. 58) may


conflict due to the “countries’ different levels of economic development” (p. 58). Donaldson

(1996) refers to these scenarios as one being effected by a “conflict of relative development” (p.

58). An example of a “conflict of relative development” (Donaldson, 1996, p. 58) are “wage

rates that seem inhuman to more advanced countries” (p. 58). In these occasions, managers must

ask themselves: “Would the practice be acceptable at home if my country were in a similar stage

of economic development?” (Donaldson, 1996, p. 58). These conflicts diminish as “economic

conditions improve in a developing country” (Donaldson, 1996, p. 58). However, there are

occasions when “a host country’s standards are inadequate at any level of economic

development” (Donaldson, 1996, p. 60) such as lax or nonexistent “pollution standards” (p. 60)

that “would considerably increase a person’s risk of developing cancer” (p. 60) or inadequate

regulatory structures that would expose patients to “dangerous side effects of a drug treatment”

(p. 60). Donaldson (1996) proposes “when relative economic conditions do not drive tensions”

(p. 60) managers “should deem a practice as permissible only if they can answer no to both of

the following questions: Is it possible to conduct business successfully in the host country

without undertaking the practice? And is the practice a violation of a core human value?” (p.

60). As a result, in his evaluation, the Japanese practices of “gift giving” (Donaldson, 1996, p.

60) provided that it is restricted “in its scope and intention” (p. 60) will be an acceptable mode of

conduct as distinct from bribery which is never permissible due to the very fact that it is

inherently destructive to core human values.

Donaldson (1996) contends that organizations must create a “culture that rewards ethical

behavior” (p. 60) and promote a “global ethical perspective among managers” (p. 60). In this

pursuit, companies must “treat corporate values and formal standards of conduct as absolutes”

(Donaldson, 1996, p. 60) and do not “waver on its principles either at home or abroad” (p. 60).


Secondly, Donaldson (1996) holds that companies must “design and implement conditions of

engagement for suppliers and customers” (p. 60) that will delineate standards that must be

followed when garnering or securing such partners. Thirdly, companies must “allow foreign

business units to help formulate ethical standards and interpret ethical issues” (Donaldson, 1996,

p. 60) thereby ensuring that these thresholds remain relevant within the parameters of the local

conditions. Fourth, companies must “support efforts to decrease institutional corruption”

(Donaldson, 1996, p. 62) in the host country of operation since “individual managers” (p. 62) by

themselves are unable to “wipe out corruption…no matter how many bribes they turn down” (p.

62). Fifth, companies must “exercise moral imagination” (Donaldson, 1996, p. 62) by

endeavoring to resolve “tensions responsibly and creatively” (Donaldson, 1996, p. 62).

Crucially, organizations must consistently remind themselves that “in a global business

environment, values in tension are the rule rather than the exception” (Donaldson, 1996, p. 62)

requiring a level of unwavering “commitment” (p. 62) that offers their managers a sound and

resilient “foundation for behaving ethically” (p. 62).

A Reflection of How this Article Can Help You Improve Your Ethical Decision Making

Skills

The “Values in Tension: Ethics away from Home” (Donaldson, 1996, pp. 48-62) article

helps me better understand and compose strategies that one may devise in order to engage in

ethical conduct in potentially unethical environments. This indeed is not an unfamiliar dilemma

for me or my family. As I conveyed in Week One Discussion Board Initial Post, the career of

my mother as a leader in the educational field was irreparably harmed due to her persistent

refusal to engage in unethical conduct in a land tainted with incessant corruption and nepotism.

Although this ethically oriented behavior offered her a stellar reputation among her colleagues in


the educational profession and with our acquaintances, this moral posture also affected the

financial fortunes of our family extremely negatively. Nevertheless, in reflection, I would have

taken a similar ethical path and placed the same moral criteria in my decision making process

and actions. In my own career in the Hospitality and Tourism Industry, my most fundamental

goal was reflected in my desire to render exceptional and beyond the call of duty service to our

guests, coworkers, those within the purview of my responsibility, my employers and the larger

community. In reading Donaldson’s (1996) article, I could clearly detect the deep respect for the

“core human values” (pp. 52-54) that energized the performance of our work and the

maintenance of our work oriented relationships. The value of “respect for human dignity”

(Donaldson, 1996, p. 52) inspired us not to “treat others as tools” (p. 53) and “recognize a

person’s value as a human being” (p. 53). Specifically, in relations to guests, we placed strong

emphasis on rendering very attentive service to the elderly, the disabled and families. Our

intention was to make certain that they receive the best of our service and not possess a perpetual

feeling that they are being hurried or for that matter neglected by the establishment. I

specifically warned our associates that their service must be absolutely free of all preconceived

notions of stereotypes that they may have formed in their minds in the past or the present. All

guests, it was emphasized, deserved to be treated with the outmost respect and deference. The

response that we consistently received from our customers was simply astonishing. Even today,

I am surprised by the magnitude of the positive feedback that we would receive from our guests.

With respect to our employees, I took special pride that those who were in my responsibility

were treated fairly and respectfully. We placed a unique level of performance oriented pressures

on ourselves and it was only fair that such dedication is rewarded in a genuine manner. I also

felt that I am in the service of those who are in my responsibility organizationally. I would


continuously encourage our employees to pursue educational opportunities in other professional

disciplines in addition to helping their career growth internally. Nevertheless, it must be noted at

this juncture that the great majority of those who were trained by our teams and moved to other

sectors of the operation, would eventually leave our organization in order to pursue successful

careers in other occupations. This affected me very deeply; however I was unable to reverse this

trend due to my limited power outside our own sectors of operation. Among those associates, I

do remember so many exceptional employees. In regards to my employers, I have never

understood that relationship on the basis of monetary compensation, but rather on the basis of

duty, honor, loyalty and responsibility. Many over the years, have commented on the degree of

deferential treatment that I offer to the members of our teams while simultaneously maintaining a

sincere sense of loyalty towards my employers. However, on occasion, when I have ascertained

that certain factors beyond my control have restricted my ability to offer the aforementioned

level of service to guests and employees, I have simply left the given organization. In these

situations, for many years, on the municipal level, I trained entering service providers on a

volunteer basis in order to improve their chances of success in the working world (My present

responsibilities have deprived me of the opportunity to continue this volunteer work, although I

look forward to engage in other volunteer work in a different setting in the future).

Donaldson’s (1996) core human value of “respect for basic rights” (p. 53-54) was of

particular importance in the performance of our work. This respect was evident in the diligence

that was exercised in asserting to the members of our teams the significance of strictly following

anti-discrimination statutes in their dealings with each other and guests. In general, Hospitality

and Tourism organizations enjoy a very diverse employee population and as a result attention to

reinforcing anti-discriminatory practices was of unique significance. I am convinced that my


career path in the field of Human Resources will offer me a much wider and deeper opportunity

to contribute in this particular area. Donaldson’s (1996) core human value of “good citizenship”

(p. 53-54) has been an inherent aspect of my relationship with my places of employment and

community. This was precisely the reasoning underlying years of volunteer service, teaching

and preparing entering service providers so that they may enjoy successful careers in addition to

ensuring that the community receives a professionalized standard of competent service. Most

importantly, I have always felt that there exists a seamless relationship in between how I respect

other human beings’ sense of dignity and basic rights and my endeavors to engage in good

citizenship conduct and practice. In my mind these are interdependent, interrelated and

interconnected concepts and activities. The exercise of any one of these core human values in

conjunction with each other or separately ensure that other core human values in our list are also

observed, strengthened and implemented. In this dynamic, good citizenship is a naturally

occurring phenomenon when human dignity and basic rights are respected in individual

relationships, organizationally and at the societal level.

Donaldson’s (1996) exhortations underscoring the crucial importance of “creating an

ethical corporate culture” (pp. 54-56) will be of particular importance in the improvement of my

ethical decision making skills. Experience and history have illustrated to me that the

effectiveness of my work is directly related to the degree of ethical conduct and practice

emphasized in the organization. In this light, when core human values have been protected and

promoted in the organization, I have been able to contribute more effectively to the performance

and vitality of the workplace. Whereas, in situations when leadership is “not living up”

(Donaldson, 1996, p. 55) to the “statements of values and codes of conduct” of the organization

and thereby has forfeited “credibility” (Donaldson, 1996, p. 55), the degree of my service


oriented effectiveness has also been compromised. As a result, I must always remember that in

potential leadership positions, I must persistently practice what I have preached to the

organization and be a model of ethical conduct in the workplace. In addition, I must be

cognizant that effective standards and statements of values “must provide clear direction about

ethical behavior” (Donaldson, 1996, p. 55) and be “unambiguous” (p. 55) in addition to being

“explicit” (p. 56) in order to be “useful” (p. 56) for the employees and the organization. All the

above is a reminder that “corporate values and formal standards of conduct” (Donaldson, 1996,

p. 60) must be regarded and treated as “absolutes” (p. 60) absent of any “waver” (60) in their

implementation. Nevertheless, as Donaldson (1996) has consistently emphasized, this level of

diligence must also be accompanied by respect for other cultural “traditions” (p. 52), a

realization that “context matters” (p. 52), the inclusion of other “business units to help formulate

ethical standards and interpret ethical issues” (p. 60) and “moral imagination” (p. 62). These all

involve a leadership temperament of listening and creativity combined with understanding and

tolerance. This also must include a leadership approach acknowledging that the “ultimate truth”

does not always reside within oneself; however it may be garnered through cooperation with

others in the organization and the society at large.

The Top Five Key Actions You Would Implement Assuming You are Starting a Business

Engaged in International Business

The first action would concentrate on creating a type of organizational culture that

practices and promotes truthfulness, fairness and respect in relations with our employees,

customers, suppliers and the greater society. The standard of truthfulness will be observed by

offering products that are not harmful to our customers. This standard will also be observed by

ensuring that our employees are not harmed, injured or become ill in the process of producing


our products in addition to making certain that the natural environment of the mother or host

country is not negatively affected by our business related activities. We will concentrate on

making a fair and reasonable profit honestly while our employees will be compensated justly

with a living wage and benefits including health insurance so that they are able to provide

comfortably for their families. We will not under any condition whatsoever resort to bribery in

order to gain unfair competitive advantage and we will not entertain and accept any such

requests accordingly. Our organizational leaders, managers and supervisors will be instructed

unequivocally that their performance reviews will be influenced negatively in the event that it

will be ascertained that they have been disrespectful to their subordinates. In addition, we will

not tolerate any discrimination, prejudice, intimidation or exclusion on the basis of protected

categories such as race, ethnicity, religion sex, gender national origin, disability, etc.

Furthermore, we will insist on a level of performance from our organizational leaders and

associates that would render our customers a valuable product or service. Above all, we will

promote a constructive open communication atmosphere in the organization based on

truthfulness and respect.

Secondly, at the first available opportunity, we will engage in a type of outreach activity

that would specifically include the construction of a health clinic for the mothers and children of

the community. In the event that such a facility is already in existence in the host community,

we will do all that we are able to do in order to support that clinic financially and with our

resources. The services that will be offered in such a facility must include prenatal/post-natal,

infant and mother/child care in addition to nutritional assistance.

Thirdly, we will cooperate and work closely and energetically in partnership with all non-

profit, non-governmental (NGOs) or governmental organizations in order to improve the health


of the host community. Again, this will include supporting financially establishments that are

already serving the needs of the host community. We will also enthusiastically participate and

support programs in partnership with other organizations intended to reduce poverty and hunger

in the community.

Fourth,

We will also cooperate and work in partnership with all non-profit, non-governmental

(NGOs) or governmental organizations in order to protect and improve the health of the air,

water and the natural environments of the host community and country. We will work on behalf

of threatened species and make certain our business related activities do not harm their living

habitats.

Fifth, we will refuse to cooperate and underwrite those sectors or interests in the host

country who promote undemocratic principles, oppress the poor and exploit the defenseless.

Conclusion

The “Values in Tension: Ethics Away from Home” (Donaldson, 1996, p. 48-62) article

upholds three core human values that enable individuals, leaders and organizations to act

ethically in foreign lands and away from the mother country. Here, “respect for human dignity”

(Donaldson, 1996, p. 54), “respect for basic rights” (p. 54) and “good citizenship” (p. 54)

underwrite and facilitate the type of behavior that will be considered ethical universally and

among all cultures. Simultaneously, Donaldson (1996) emphasizes that in pursuit of creating

cultures where such conduct is practiced, organizational leaders must loyally practice what is

expected form subordinates in ethical conduct. In addition, organizations must also provide for

their associates clear and specific guidelines and expectations in regards to ethical conduct.


Finally, Donaldson (1996) asserts that the desire to engage in ethical behavior must also be

accompanied with deep respect for the culture of the host country and community in order to

generate the type of decision making that will be effective in resolving the ethical dilemmas of

managers and leaders.


References

Donaldson, T. (September-October 1996). Values in tension: Ethics Away from Home, When is

different just different, and when is different wrong. Harvard Business Review. LDR 6135, The

Ethical Leader. Retrieved September 21, 2014 from College of Professional Studies,

Northeastern University Blackboard Website:

https://nuonline.neu.edu/webapps/portal/frameset.jsp?url=%2Fwebapps%2Fblackboard

%2Fexecute%2Flauncher%3Ftype%3DCourse%26id%3d_2249305_1%26url%3d .

Dunfee, T. (n. d.). In T. Donaldson, Values in tension: Ethics Away from Home, When is

different just different, and when is different wrong. Harvard Business Review (September-

October 1996) (pp. 48-62). LDR 6135, The Ethical Leader. Retrieved September 21, 2014 from

College of Professional Studies, Northeastern University Blackboard Website:



Rawls, J. (1971). A theory of justice. In T. Donaldson, Values in tension: Ethics away from

Home, When is different just different, and when is different wrong. Harvard Business Review

(September-October 1996) (pp. 48-62). LDR 6135, The Ethical Leader. Retrieved September

21, 2014 from College of Professional Studies, Northeastern University Blackboard Website:



https://nuonline.neu.edu/webapps/portal/frameset.jsp?url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCourse%26id%3D_2249305_1%26url%3D






LDR 6135 Paper One Case Analysis of Values in Tension Article

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