The Following is an excerpt from the PhD Proposal for the ‘Future of Business Ethics’ PhD Project that I am part of and will start with 6 others, Beginning Jan 2015. (
China (and India, Indonesia) are bringing are rising as an economic powerhouse in the business world of today. With the rise of the economic power the self-awareness of these countries with their own culture in doing business is rising as well. In combination with the struggle to keep operational costs low in the fierce competitive market, Western Companies who are active in Asia struggle to find a balance between profit and their international business codes (business ethics guidelines), as Asian Countries often lack strong regulations (or lack the governance) on environmental and labor protection. Recent business Scandals across Asia have shown us that Western Companies are struggling also to do what is right, be it in the field of competitiveness (Nestle in China), Supply Chain management and Labor rights (the Textile Industry in Asia) or violations of labor laws by main suppliers (Foxxon, Apple in China).
In this struggle Western Companies often have a unique role as International and local NGOs, but local governments as well, look at Western Companies to set the right example in carrying out international guidelines on Environmental protection, labor rights, fair wages etc. Even more so in the Chemical Industry in Asia, where the impact of said Industry is substantial in terms of economic and environmental impact. There is a huge pressure on Western Chemical Companies to do the right thing, in a very competitive market, a market where State Owned Companies are often strongly supported by Government, and regulative external structures are failing or are not in place. Also, when things go wrong in the Chemical Industry, the Environmental damage can be significant, and the costs for environment and society substantial. Therefore, if Western Chemical Companies would come to understand what a more effective way would be to implement their international business codes, they would not only help themselves by abiding their approved rules, they would have a positive effect on their surroundings be it their clients and suppliers, the environment and people who work for them, but also as setting a positive example for the non-Western Chemical Industry in Asia.
(For Example: BASF and East China University of Science and Technology sign MoU to raise sustainability standards in chemical industry supply chains, Shanghai, China – June 9, 2014)
Main Research Question:
What is the most effective way for Western Companies in the Chemical Industry, to implement their international business codes in Asia?
In implementing global standards, which factors are important for Western Companies. These Factors can be the structural ‘input’ side of the process (legal, formal structure of the company), The internal and external process (who communicates what) , the strategy factor (what and if a company has a strategy for each different Country they operate in) . What strategies are there to teach business ethics in Developing Asian Countries as China, Indonesia and India for Multinational Western Companies? What kind of strategy is most effective in implementing international guidelines?
The research Process
Since 2000, the research in business ethics in Asia has risen significantly(). May studies have been conducted on the nature of business ethics in Asia, on the differences in business cultures between East and West, and the problems that arise in doing business in Asia(). There have been some studies on implementing a business code in Asia, describing the problems Western Companies in general face in that process. ()
To be able to make a valuable and practical contribution to the research of business ethics, the scope of the research will be in one industry sector: By focusing on one sector, with its specific challenges, global appearance but similar business structure around the world, it is possible to benchmark the ethical standards and behavioral outcome for that industry. The advantage of this form of study is that it will be more suitable for the Industry to take the research results to heart and discuss it within its company and industry network (see Graafland and Smid, Graafland and Zhang for research in general on the effectiveness of CSR programs in China: for effectiveness, to have CSR programs in itself is not enough to see effect in company CSR outcome). To be able to compare the business ethics standards, issues and implementation, the study will be done with this one Industry Sector: the Chemical Industry. Reasons for choosing this Sector are the following:
– The Chemical Industry operates worldwide, but is especially active in Western Europe, the US and the upcoming economic powerhouses in Asia. The Chemical Industry has enough multinationals in its sector to compare results within the companies themselves and between companies worldwide. Also, the chemical multinational industry has a vast communication network on information on HSE standards and business codes which is necessary to be able to do research on CSR implementation (Stevens 2007). For the research in the implementation of business codes for the Chemical Industry, there has been more research done in the field of sustainability () than in business ethics and Corporate Social Responsibility.