I would never have thought that the hardest part of this assignment was to find a good example of a business organization behaving ethically in an ethical dilemma. There are numerous cases of businesses behaving unethically. The list of businesses behaving illegally is similar to a who’s who of top companies. However, I did find one company that appears to have based their business on ethics. The 3M Corporation continually tries to infuse their ethics into their organization, even when they expand into other countries.
Applying Ethics in an Ethical Dilemma
In March 2011, industrial conglomerate 3M, formerly known as the Minnesota Mining and Manufacturing Company, started to build manufacturing facilities in Russia’s Tyumen and Samara regions. The total investment was approximately fifteen million US dollars. The new facility will produce an insulation material Thinsulate, a very thin, synthetic petroleum based insulation, used in clothing. All branches of the United States military use Gore-Tex cold weather gear and Thinsulate is one of the key materials used in the clothing (Romanova, 2011).
Building the plant was the easy part; the difficulty was getting into Russia. According to the Berlin-based Transparency International’s 2010 Corruption Perceptions Index, Russia is ranked 154th among 178 industrialized countries for its corrupt practices (Barr & Serra, 2010). One of the problems 3M faced was the managerial mindset in Russia. They do not recognize or reward their subordinates for exceptional performance. They only care about current profits and they do not plan. Because of the countries high levels of corruption and political instability, they try to get everything they can right now, because they are in fear of what can potentially happen tomorrow. Due to all these factors, most multinational companies have avoided investing in Russia (Shama, 1997).
The environment for business in Russian is full of obstacles. Corruption, bribery and paying of protection money are synonymous in business culture. 3M is different from the few other international companies that operate in Russia, that try to distance themselves from such practices by simply banning them. 3M Russia actively promotes not only ethical behavior but also the personal security of its employees. 3M Russia also strives to differentiate itself from competitors by being an ethical leader. For example, it holds training courses in business ethics for its customers and employees. (Langlois & Schlegelmilch, 1990). Ethical Framework Applied by the Organization
In order to understand the ethical frameworks that drive this corporation, I feel it is imperative to read their principle statement. 3M employees and third parties to which this principle applies must make good, ethical decisions based on 3M’s fundamental values of honesty, integrity, promise-keeping, fairness, respect, concern for others, and personal accountability. When the law and 3M’s Code of Conduct are silent on the issue, employees must nevertheless make decisions that are legal, ethical, and consistent with the Code of Conduct (Thulin, 2012). Initially, the ethical framework the 3M Corporation used appears to be the Utilitarian approach. Defined as, create the greatest good for the greatest number sometimes referred to as maximizing the good in the world (Dahl, Mandell, & Barton, 1988). In this theory, we weigh the positives against the negatives and against the cost versus risks. This theory emphasizes that all people should reap the benefits in a society, a community or a family. I believe 3M felt that since they were expanding globally into a new continent or country, they were trying to bring their solid ethics with them. 3M faced a difficult task of bringing ethics into a country that unfortunately, ranks low for their ethics (Barr & Serra, 2010).
Another ethical framework I believe the 3M Corporation used in establishing their new factories in Russian is the deontological approach. This states that actions judged as ethical or unethical based on the inherent rights of an individual and the intentions of the actor (Dahl, Mandell, & Barton, 1988). In Deontology theory, an individuals or organizations code of ethics is not supposed to be situational but they should be constant and always followed, to ensure that in when facing adversity their morals remain the same. When 3M went to Russia, they could have easily changed their ethics to fit the societal norm but they did not. They maintained the same high level of ethics as they do in other countries with less corruption, bribery and payments of protection money. They not only maintained it at a higher level, 3M even taught classes to their employees on ethics. For some, this was their first exposure to structured ethics training. Many deontologists believe that the rights of individuals reside in “natural law.” The individuals are a means and not end (Dahl, Mandell, & Barton, 1988). In their principles, all employees must apply honesty, integrity, promise-keeping, fairness, respect, concern for others and personal accountability (Thulin, 2012). They even emphasize when a situation occurs that is not covered by law or plainly outlined, they hold their employees responsible. They should make decisions that are fair, honest and above all in keeping with the company’s policy on ethics Negative Consequences of the Decision
Negative Consequence of the situation is that board members in Minneapolis Minnesota decided to enforce American ethics in another country. Although the decision, based on good intentions, begs the question, do we have the right to enforce or impress upon our workforce in another country American ethics. Often the United States and American companies receive accusations of nation building, or where we go into another country and try to impress American laws and customs onto the indigenous population. Do we have the right to endanger our employees to make ourselves feel better? Here in America, corruption, bribery, and paying of protection money is socially unacceptable. When that is the norm, do we have the right to force our beliefs on another country or culture? For example, when the United States Armed Forces works with a foreign Army or government, we try to follow the host’s countries rules. When I was in Iraq, it was illegal to possess, purchase or consume alcoholic beverages. It was illegal to possess, purchase, and download any pornographic material. Iraq is a strongly Muslim country, and those are two of its major offenses to their faith. We changed our policies to comply with the host countries norms and values. Should our businesses follow that same example, to protect its workers and its interests? Conclusion
Ethical Frameworks attempt to provide a guideline for how an organization or even a society should interact with one another. The strength of this analysis is that it showed that when an organization practiced good ethics, the principles are truly universal. The behavior of the 3M Corporation in their expansion into Russia should be the norm not the exception. When foreign organizations with different ethical codes of conduct meet, they should be able to create a common ethical cooperation framework, keeping strong basic values and adapting moral principles to best meet everyone’s needs.
Barr, A., & Serra, D. (2010). Corruption and culture: An experimental analysis. Journal of Public Economics, 94(11), 862-869.
Thulin, I. (2012, February 24). 3M Code of Conduct – Principles. Retrieved October 12, 2014, from http://solutions.3m.com/wps/portal/3M/en_US/businessconduct/bcmain/policy-/principles/
Romanova, M. (2011, March 11). American 3M to Expand into Russian Regions. Russia Briefing News. Retrieved October 11, 2014, from http://russia-briefing.com/news/american-3m-to-expand-into-russian-regions.html/
Shama, A. (1997). From exploiting to investing: A survey of US firms doing business in Russia. The International Executive, 39(4), 497-518.
Langlois, C. C., & Schlegelmilch, B. B. (1990). Do corporate codes of ethics reflect national character? Evidence from Europe and the United States. Journal of International Business Studies, 519-539.
Dahl, J. G., Mandell, M. P., & Barton, M. E. (1988). Ethical frameworks of “Tomorrow’s Business Leaders”. International Journal of Value-Based Management, 1(2), 65-81.