Over the past 20 years the problems of business ethics increasingly attract the attention of researchers, managers and public figures. Ethical evaluation and reputation play today an important role in making transactions, selecting business partners, applying sanctions, etc. In general, business ethics is a set of ethical principles and norms, guiding the activities of organizations; it covers ethical assessment of internal and external policies of an organization, moral principles and professional ethics of its members, moral climate, and business etiquette. The highest level of corporate ethics is social responsibility of business, which is to support welfare and quality of life of the whole society (Donaldson, 1992).
In addition to understanding business ethics as social responsibility of an organization, there is a position of relativism, i.e. recognition that people are not able and have no right to decide what is good or evil. According to relativism, ethics is relative and depends on social and cultural circumstances, in which organization is located. Cultural relativism asserts that there are no universal moral standards, in accordance with which moral and ethical norms of another society/organization can be judged. If some corporate culture is based on certain believes, how can an outsider judge or criticize it (Lamond, 2008).
The concept of cultural relativism takes on additional significance, when it comes to the competition of companies on the global level. Multinational corporations often adhere to local laws and customs, which may contrast with ethical norms accepted in their countries. Discussions on apartheid involve the issues of cultural relativism, e.g. whether MNCs adopting cultural relativism philosophy can justify their participation in the extraction of gold and diamonds in South African mines, despite the usage of slave labor (Lamond, 2008).
However, cultural relativism suggests that diversity promises more opportunities than uniformity and homogeneity. The solution of contradictions in cultural relativism is seen in contracting on the equality of terms for all the participants of market competition.
Donaldson, T. (1992). The Ethics of International Business. OUP USA.
Lamond, D. (2008). Treading the lines between self-interest, cultural relativism and universal principles: Ethics in the global marketplace. Management Decision, 46(8), 1122-1131.