Acc 557

Ethics Case Study
Dien Huynh
University of Phoenix
ACC/557 Accounting Ethics
Instructor: MICHELE SCOTT
11/16/2012

Ethics Case Study The case study of Lillian Fok, Sandra Hartman and Kern Kwong in 2010 about differences and similarities in business ethical values has been done to examine ethical values that underlie business decisions in the U.S., China, and Jamaica. China transforms from a socialist based, command economy to a free market economy. Because of the transformation, China needs to change their mindset or probably their ethical values to adapt to the change. On the other hand, Jamaica has been already a capitalist country but it struggles to build the economy because of its colonial status from Great Britain (Fok, Hartman & Kwong, 2010). This paper will discuss how ethics plays a role in decision making for financial, environmental, and cultural issues, how positive and normative economics reflect in the case study, and how market efficiency, economizing and the market system affect the ethical values of the three countries: U.S., China and Jamaica. Roles of ethics in decision-marking for financial, environmental, and cultural issues U.S., China and Jamaica have different economic and cultural background, so their business decisions are influenced by different ethical standards. China is transforming from the socialist economy from capitalist economy, so there will be clashes between individualism and collectivism mentality. In the vignette #1 of the case study, managers of the three countries are asked to give their view on bribing foreign businessmen to gain access to his country’s market. Big discrepancy is found in Rationale C (Bribe; unethical), E (Is an acceptable practice in other countries), and F (Is not unethical, just the price paid to do business). 23.5% American respondents, 17.9% Jamaican respondents, and 8.2% Chinese respondents believe it is unethical to do so. 13.6% American respondents, 46.9% Chinese respondents, 30.8% Jamaican respondents believe it is not unethical, bribery is just the price to do business (Fok, Hartman & Kwong, 2010). The reason American mangers believe bribery is unethical because their ethical values are influenced by capitalist society that has complex anti-corruption regulations. On the other hand, Chinese managers believe it is acceptable because bribery happens often in a socialist society.
Positive and normative economics Positive economics is the analysis of facts or data to establish scientific generalization about economic behavior or “what is” about the economy. On the other hand, normative economics is about value judgments or “what ought to be” (McConnell & Brue, 2005). Positive economics is used to know the facts or real condition about the economy in order to decide what actions to take. On the other hand, normative economics is used to achieve desirable goals for long term. In the Vignette #3 of the case study, mangers are asked to give their view on using a technology that can greatly pollute the environment. 30.9% American respondent, 18.4% Chinese respondents, and 48.7% Jamaican respondents are concerned for the environment (Fok, Hartman & Kwong, 2010). Because of capitalist economy, normative economics is used when American and Jamaican mangers give their answers with subjective view that the environment should not be polluted. On the other hand, Chinese managers ignore air pollution based on the facts that they need their economy to grow rapidly which reflects the concept of positive economics.
How do market efficiency, economizing and the market system affect these ethical issues? Because China is trying to expedite economic growth, so they are more likely to make business decisions that are “unethical”. On the other hand, the American economy has been stable for a long time, so people are more concerned about the environment, sustainable growth and are likely to make “ethical” decisions. In the case study, China has faced an economizing problem that they need to use all available resources to achieve their economic growth. Chinese mangers view bribery is acceptable because they want to gain access into other markets to sell their products to achieve economic growth. Furthermore, Chinese managers’ decisions reflect their tolerance for “unethical” behavior in order to satisfy the needs of their society. On the other hand, the U.S. mangers are more concerned about the environment and would not implement technology that pollutes the air.
Conclusion
The case study shows that there are differences and similarities in ethical decision marking of three countries U.S.A, China, and Jamaica. Nowadays, it is important to have a good understanding of cultural differences to do business globally.

References
Fok, L.Y., Hartman, S.J. & Kwong, K. (2010). Differences in business ethical values: a study of differences in business ethical values in mainland China, the U.S. and Jamaica. Review of Business. Retrieved November 16, 2012, from University of Phoenix, Week 1, ACC/557 – Accounting Ethics.
McConnell, C., & Brue, S. (2005). Economics: principles, problems and policies (16th ed.). New York: McGraw-Hill.

References: Fok, L.Y., Hartman, S.J. & Kwong, K. (2010). Differences in business ethical values: a study of differences in business ethical values in mainland China, the U.S. and Jamaica. Review of Business. Retrieved November 16, 2012, from University of Phoenix, Week 1, ACC/557 – Accounting Ethics. McConnell, C., & Brue, S. (2005). Economics: principles, problems and policies (16th ed.). New York: McGraw-Hill.