Thursday, October 04, 2012

Business and Ethics in 5 Different Cultures

In Business Administration lesson, when we tackle with the cost and benefit analysis (CBA), we tend to assume that all economic agents in this world use the same formula of the CBA to make their business plan. So, we tend to ignore that not all economic agents share the same rationale of their business planning. This CBA formula is based on the utilitarian philosophy which regards highly of maximising the utility which is the total benefits minus the total costs. It takes account of all the costs and benefits accumulated from the time of this business establishment to the present time period (or possibly to the expected ending period).

Nonetheless, when we take a look of our real world, we eventually realise that many economic agents do not exactly follow this business model. Some of them incur the costs more than this CBA suggests. Some of them only focus on minimising the cost rather than maximusing the benefit minus the cost. Some of them even behaves extremely irrational owing to perspective of this CBA rationale.

The ethics basing this CBA introduced in Business Administration is the ethics of Anglo-Saxon and Jewish entrepreneurs. Anglo-Saxon and Jewish ethics has become the dominant mainstream in this world especially in various private economic activities since British Empire started dominating the world economy. The USA took over the world economic domination from Britain. So, Anglo-Saxon culture has been extremely influential. Furthermore, Jewish have been taking a huge part of the world economic activities. So, Jewish philosophy also participated in forming the mainstream ethics of the world economy. All in all, the mainstream world business ethics is based on both Anglo-Saxon and Jewish philosophical characteristics.

When we observe those who behave differently from what the mainstream business ethics suggests, the CBA analysis may eventually regards these economic agents are highly irrational. By contrast, we should realise that their business planning is based on their own different rationale of business ethics. In particular, since Germany became industrially strong, and the USA became highly influenced by her Germanic origins, German business ethics has been a very remarkable characteristics in the world economy. Even though it has not been the top mainstream, it formed one of the unique characteristics in the Western business models. Nowadays, on the top of Germanic influence, Nordic (Scandinavian) nations recently started having a strong influence over the world because of increase in the number of Nordic multinational corporations. We also cannot ignore Romanic culture (Latins and France) because it was dominant before British empire took over the dominance from it. Orthodox culture (Russia, many Eastern European countries, and Greece) is also unavoidable. In addition, some of the non-Western cultures have a strong impact on the world business ethics. Thus, regardless of right and wrong, we must analyse the various CBA analyses offered by the different business ethical models. This essay introduces 5 different influential models.

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