What ways can culture affect ethical standards & shape business behavior?

Written by asha kalyani
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What ways can culture affect ethical standards & shape business behavior?
Ethical standards are culturally influenced and shape business behaviour. (Thinkstock Images/Comstock/Getty Images)

Certain ethical standards are held up as good business practices in American business. But if you are going to do business with people of other cultures, you must understand that their cultures will affect their perceptions of what is ethical. The concept of "good business behaviour" is not universal, but depends on culture. Therefore, to do good international business, it is vital to be aware of the influence of cultures upon ethical standards in business.

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Business Dictionary defines ethical standards as: "Principles that when followed, promote values such as trust, good behaviour, fairness, and/or kindness." Certainly, in business, it is advantageous for the parties involved to trust one another and to think well of each other. So, holding ethical standards is important if you want to do business well. But what if you are doing business with people from other cultures? Can culture itself affect ethical standards? Does the appropriate business behaviour change based upon someone's culture? Yes. Depending on a person's culture, his ethical standards (and the business behaviour that follows those standards) can vary significantly.

Cultural Effect

So how does a person's culture influence his ethical standards? Religion, language, nonverbal communication, experiences and education are all part of a person's culture --- and all of these factors can influence a person's ideas of what practices are ethical (i.e., what practices will promote trusting, good business relationships). For example, Confucianism has a strong impact upon Chinese culture. A major emphasis in Confucianism is on maintaining good relationships and showing loyalty, respect and honour to those who deserve it. Therefore, in Chinese business culture (as in Chinese culture at large), saving face for yourself and others, as well as showing appropriate loyalty and honour, is important.

Business Behavior

People's business behaviour is certainly influenced by the ethical standards that their culture sets forward. For example, the Chinese are very formal and respectful in business, as respect is an underlying value in their culture. If you are doing business with a Chinese person, be sure to show honour. And whatever you do, do not make any remarks that would cause that person to lose face. You might poke fun at the suit your American colleague is wearing, and your remark would be taken as a good-natured joke that indicates you are friends; however, if you did the same to a Chinese colleague, you could be giving a real insult that would seriously injure your business relationship.


What are the implications of the strong effect that culture has on people's ethical standards and business behaviour? First of all, you must seek to learn the culture of those with whom you will be doing business. Then, as you learn their culture, act in accordance with their culture's ethical standards. Do and say the things that will express that you have the best interests of those around you in mind. Respect cultural values and their way of conducting business. Make sure to adjust your own business practices in a way that expresses deference for their customs. This willingness to adopt the standards of another culture is the best way to establish ethical and intercultural communication in business with people of other cultures.

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