Understanding Business Ethics in Asia: a Study of Several Ethical Issues in Japan, Indonesia and Mongolia

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Understanding Business Ethics in Asia: A Study of Several Ethical Issues in Japan, Indonesia and Mongolia Anggita Putri, Nasa Lkhagvasuren, Takashi Ushijima
Brigham Young University

International business ethics has been an issue researched and understood by companies, government entities, NGOs, and other institutions worldwide. Understanding business ethics becomes more important as entities understand the significance of cultural values in different countries. De George (1997) describes that as business is going global and cultural values are becoming more evident, it is “more urgent for agreement on common values that make world trade and commerce possible without any party feeling or being exploited”. This agreement on common values has been achieved on some scale and level; however, in many parts of the world, cultural values and circumstances usually still hold more weight in the decision process. This paper addresses several ethical values in three representative Asian countries: Japan, Indonesia, and Mongolia. The three countries are located in three different parts of Asia with difference in economy, social, and culture values. Therefore, each country has its own unique way of approaching and overcoming ethical issues. For each of the different issues, we will provide background information and history and then we will discuss and develop the issue. First, the paper will address Nabakari-Kanrishoku (Nominal Manager) which is an ethical issue in the workplace in Japan. Second, the paper will discuss gratification giving in local and national government which is a prevalent ethical issue in Indonesia. Last, the paper will talk about the development of ethical standards in Mongolia. The conclusion of the paper will summarize the importance of understanding cultural aspects while implementing ethical standards in different countries, and discuss a few ethical theories that will help frame the ethical issues discussed.

Japan
Background Information
Since the birth of the idea of Capitalism, a conflict of interests has existed between employers and employees. In general, employers’ genuine best interest is to maximize their profits; whereas, the employees’ interests are to receive wages out of the least work hours. However, without regulations, laws, or rules, historically, the conflict has tended to favor the employers. Therefore, working long hours has been one major ethical issue in workplaces all over the world, especially in capitalistic countries. Nabakari-Kanrishoku (nominal manager)-hereinafter referred to as NK- is a unique phenomenon in Japanese society which represents the working-long-hours ethical issue in Japan. Labor Standard Act (hereinafter referred to as LSA) prohibits that working hours exceed 40 hours per week unless (1) the agreement exists between the employer and the employee and approved by municipalities (Article 36) or (2) the employer pays overtime rate to the employee (Article 37). Ethical Issues in Workplace in Japan: Nabakari-Kanrishoku (Nominal Manager) The dilemma exists between employers and employees under recession. Employers have to make sure their business runs appropriately and generates a sufficient amount of profits. In the case of a recession, employers/companies have to cut costs significantly because increase of revenue is rarely expected. In general, the large amount of expenditure is labor costs; therefore, cut labor costs, such as layoffs, increase the workload of each employee. However, the increase of workload often causes overtime work for each employee and the increase of overtime premium adversely affects the cut labor costs (Mizuno, 2012). Therefore, employers/companies have to face the dilemma of how extensive their cut labor costs will be while also dealing with the increase in employee workload and overtime work. Responding to such a dilemma, NK emerged in the Japanese business society as a loophole of LSA when Japan started experiencing recession in...
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