As I was thinking through the various areas of study from Business School, I wondered what might be a good topic to start an initial discussion of key management topics.  Marketing is certainly glamorous and important to those in marketing.  Operations is certainly key to those who practice in the area of operations.  But the area of Ethics is an often overlooked area that is critical to everyone in a business enterprise, especially between business enterprises conducting business internationally.

Ethics is an issue that is addressed in most professional disciplines.  In law and medicine they have specific codes of conduct that must be followed by members of the profession.  Ethics violations in these professions have repercussions.  A lawyer can be debarred and a physician can lose the right to practice.  Many businesses have codes of conduct to manage the behavior of their employees and violations can lead to dismissal.  At my university, I am required to complete a course on ethics every year.  There is a strict code of conduct that I am expected to adhere to.  I must execute a conflict of interest statement to assure the university that decisions that I make in awarding contracts are fair and appropriate.  On an annual basis I must submit a financial disclosure statement to show that I have no financial gain from companies that conduct business with the university.

With the advent of the internet, more and more small business have been formed and have the ability to do business virtually anywhere in the world.  While the majority of these business owners have a strong sense of honesty and integrity, there are those who lie, cheat and steal.  If they are caught, they may find themselves subject to legal prosecution.  Or they may simply move on to another set of customers and and proceed to operate in their own self interest at the expense of others.

Ethical behavior builds trust and trust builds valuable, enduring business relationships.  A major concern in international business is minimizing risk.  How is it possible to build trusting relationships when separated by thousands of miles, speaking different languages and coming from different cultures?  Which legal venue will judge a contract dispute? 

I have seen several situations where non-ethical behavior by one party has damaged another.  Many business owners who have been "burned" find it difficult to extend their risk and move on to safer markets.  I know of one business owner who visited a factory in China with the impression that the host was the owner of the company.  It was not until after placing an order with a large deposit that it was learned that they had been cheated.

Another major area of concern is security of confidential information and intellectual property.  The laws regarding these issues in the two countries are different.  The perceived risk of losing valuable information places limitations on trust and the development of good business relationships.

Recently a business person had a visitor to their office from someone they regarded as a good friend and business associate.  The friend ask to use a computer because he need to send an important email.  Later it was discovered that this individual had copied the computer files and emailed them to himself.  He did not hack into the computer nor did he break into the business under the cloak of darkness.  He walked in during the light of day, posing as a trusted associate only to be the worst possible example of ethical behavior.  But he was also clever in covering his tracks so as to avoid prosecution.

I don't have the answer as to how to install a code of ethics for everyone desiring to conduct business between China and the USA.  However, I think it is important for all of us who recognize the tremendous business opportunity to find ways to build trust and expand positive, enduring business relationships.  We must find ways to assure each other that unethical behavior will not be tolerated and that we will work jointly to call attention to it and wipe it out when we find it.