Business Ethics in China

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BusinessEthics in China

Ethicsor rather morals entail mechanisms that defend, systematize as wellas recommend conceptions of right or wrong. Many organizationsdevelop ethical codes to ensure employees and employers as wellunderstand the difference in doing right or wrong. In that respect,ethics are an essential aspect in the success of any business. Apartfrom defining right or wrong, they also give an outline on how anorganization should be run to ensure success i.e. adequate profits.Ethics ensure employee’s productivity levels are up to the requiredstandards. It also assists them to know their rights andresponsibilities. Additionally, employers as well as any persons inmanagement are guided by them to ensure they provide transparentleadership. International business ethics on other hand outlines howdifferent countries conduct exchange of products and services. Forinstance, a country can stall from exchanging goods due to differentethical issues such as cultural values.

Ethicalissues are quite vast across the globe. They differ from country tocountry but most have the same impacts. Though they vary across theglobe, some aspects are common among many nations. The most commonethical issues include corruption, dishonesty, lack of integrity anddeficiency in social responsibilities among others. Most of thisethical issues are experienced in many nations in differentcapacities. For instance, the corruption levels in Asian countriesdiffer from their American counterparts. The levels also tend todiffer when compared to the African countries. Though the degree maybe varying, they all lead to the same impacts i.e. limited profits,misappropriation of funds that can even lead to closure of abusiness. This paper will look to outline the ethical aspects ofbusiness in China. It is vital to understand the ethicalconsiderations in China i.e. the standards required in establishing abusiness as well as international exchanges. In establishing thesame, this paper will illustrate the different challenges withrespect to ethics. The cultural aspects that interfere with exchangesbetween China and some other countries is an important point to lookat. Providing recommendations on the ethical challenges will also bea major undertaking within this paper.

Drivingfactors that have necessitated business ethics

  1. The scandal argument. Scandals tend to provoke outrage and in many circumstances calls for better practices in the environment are made. Though they get too much publicity, they do not result in a long-term change in business practices.

  2. The economization argument. It is evident that business is playing a huge role in the social lives or rather “economization” of the society. Economic thoughts and acts are quite dominant in the current life domains i.e. only aspects that count economically as yield profit as well are relevant.

  3. Good ethics signifies good business. Evidently, a good business go hand in hand with good ethics. Ethical conduct is a vital unifying and motivational force in the competitive international market.

  4. Future challenges. Working in an anticipatory, entrepreneurial and proactive manner is quite vital in facing challenges. This because future challenges are inevitable and bound to happen.

Ethicsin China

Chinacan be viewed as an emerging economy over the last decade or so. Infact the emergence of China as a major economy has been one of thegreatest difference within the global economy in the 21stcentury. The nation’s role as an economic mainstay in the currentworldwide business environment has stimulated a change from outdatedneoclassical and competition-driven contexts like Porter’sarchetypal of transnational business towards the assimilation ofother societal science-based schemes of exchange from areas likecultural studies, sociology and anthropology. Evolving economies likeChina face greater levels of business improbability or ratheruncertainty, making it vital to use varying analyses mechanisms thanthose utilized in assessing mature economies. This is because maturemarkets are able to coordinate among the exchange partners evenduring periods of uncertainty. This is not the same for emergingeconomies [ CITATION Ron14 l 1033 ].

Inan international environment characterized by great uncertaintylevels, accessing dependable information as well as other resourceslike societal capital is quite vital. According to various researchworks on global co-operative relationships, uncertainties of whethera party will realize its commitments, expectations and duties is akey concern in nations where the legal structure is still weak andunpredictable like China’s case. In a global business scenery, thestrain lies in ascertaining the different party, as well asestimating the value or content entailed in the product or service inexchange. Even though parties may agree on the value of product andservices, interferences can emanate from communication distortion,varying ethical behavior due to diverse cultures, mutualinterpretations as well informational limitations. The major setbackis whether the transacting parties have unshared or shared identitiesor values hence have predictable behaviors. It therefore calls formutual commitment from the parties involved [ CITATION Ron14 l 1033 ].

Businessethics in China are developed on “guanxi” basis. It is thefundamental practice and principle underlying the entire Chinesesocietal fabric. Relationships as well as the moral obligationscoming from the set relationships are placed above any otherconsiderations, even the written laws in the Guanxi setup. Guanxidescribes how businesses are operated in China across all levels.They also outline how the Chinese perceive ethics.

Challengesin China in relation to international business Ethics

Thestandards of ethics of several organizations of the American originportray a notion that welfares of the business come first. Theemployee in this case has an ethical duty to place the interest ofthe company before personal interests. Therefore, for instance,purchasing properties at higher prices from a close colleague orfriend can be viewed as the principle of corruption. This culture isunanimously implicit within the American business culture. Thoughthis practices exist within the Western business world, they cannotbe regarded as ethical conducts. This represents a culture differencewhen compared to the Chinese aspect. In that respect, Americancompanies trying to establish within China find it hard acclimatizingto the different cultural ways [ CITATION Sta10 l 1033 ].

Thecultural diversities in ethical conduct can be viewed in differentways. For instance, a behavior which an American would see as an actof corruption may be different in the Chinese perspective. A Chineseworker on the other hand may deem it as a natural, normal, andethical method of doing business. The end outcome is social harmonyand adequate profits. On their part, the Chines may deem the Americanmechanisms of assessing the business relationships in a financialmanner and supposing all its workers to do the same on behalf of thewestern employers as a corrupt behavior. Additionally, expectingChinese employees to follow the American way of doing business tendsto undermine the company’s loyalty [CITATION Ray18 l 1033 ].

Thecultural clashes develop a major issue for western organizationsconducting their businesses in China. It is evident that westernbusinesses are centered on cost reduction rather than maintainingbusiness relationships. The ethical ideologies of western businessesi.e. upholding low costs of products and services for customers andsubsequently increasing the shareholders’ value go head to headwith the Chinese code of guanxi frequently. Guanxi unswervinglyundercuts the business practice by commanding costs or rather pricesthat have a probable negative effect on competitiveness [ CITATION DrB09 l 1033 ].

Stampingout corruption deeds in western business processes within China isbasically trying to extinguish guanxi. It has almost zero chance ofever happening. Any attempt to eradicate the same may lead toincrease in costs. This because, it will tend to increaseinefficiency thereby making the Chinese more stealth in theirbehaviors [ CITATION Jud12 l 1033 ].


Chinacannot be entirely viewed as a corrupt nation, instead it is adifferent society. Many companies make a mistake of viewing China asa corrupt nation hence instill their cultural ways of undertaking abusiness on them. Accordingly, they end up spending more on stampingout corruption than the cost of corruption itself.

Culturesdiffer across the globe. Therefore, any company venturing into theChinese markets has to understand the Chinese culture. They have tooblige to the guanxi and base their principles on the cultural waysof China. China is an ethically sound nation in terms of businessperspective companies should not be entirely afraid to conduct theirbusinesses with ease.

Thekey to security lies with the Chinese investigators that arecontrolled by the business. It is therefore safer for westerncompanies in China to employ security personnel who are Chinese andensure they are well paid. This will tread a long way in maintaininga corruption free environment using limited resources.


Irwin, J. (2012). Doing business in China: an Overview of ethical aspects. Doing business in China: an Overview of ethical aspects, 1-22.

Raydwell Consulting Inc. (2009). . Business Ethics in China, 1-8.

Ron Berger, R. H. (2014). The evolution of Chinese business ethics. The evolution of Chinese business ethics, 776-791.


Toffler, D. B. (2009). International Business Ethics Review. International Business Ethics Review, 1-16.

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