55221

Communication

An Ethical Approach to Multinational Marketing: Is it Possible?

In the 1960s, country-western entertainer turned sausage-maker Jimmy Dean stunned the marketing world and delighted many American consumers when he proclaimed in his television commercials that he would "rather apologize for the price than apologize for the quality" of his products. This direct admission from the head of a company that his products actually cost more than his competitors might have been a marketing faux pas at the time, but time has shown that consumers frequently respond in a positive fashion when they are presented with the truth about something. In this regard, many corporations often make the mistake of believing that there are secrets they can keep from public scrutiny, much like the Chinese Government believes it can sweep unrest and protest under the cloak of communication control. Both beliefs of how to handle communication are doomed to fail, though, either sooner or later. As Steven Axley (1984) discusses in his essay, "Managerial and organizational communication in terms of the conduit metaphor," such beliefs about human communication are based on a conduit metaphor (e.g., communication is simple and can be controlled). While it is a useful fiction for corporate CEO's and government bureaucrats, this concept is very far from reality.

These are particularly important considerations today as companies from one country attempt to project a new presence in a foreign market. During this process, they are inevitably confronted by a number of considerations involving powerful cultural and social differences that might not be readily discernible, but which nevertheless play an important role in how the company's product or service sells and how its business practices are perceived. If a U.S. telecommunications company, for example, wants to establish a presence in the burgeoning Chinese market, or take advantage of the opportunities represented by the increasing affluence of Eastern Europe and Russia, they must conform to all applicable legal and regulatory requirements to legitimately do so. Unfortunately, though, the requirement for doing business in a foreign country does not stop with merely securing all of the legal authority required, it also entails doing business in a locally acceptable fashion. According to a recent article by Peter Wonacott (2005), "In a system lubricated by money, U.S. companies often face pressure to play along. Boston Scientific Corp., a Natick, Massachusetts, medical-devices company, used outside distributors for years even though it suspected them of providing unethical incentives to doctors" (Wonacott, 2005, p. A1). If this means that bribes must be paid in order to land an account, or secure an important import permit, or obtain permission to construct a building, the U.S.-based company is indeed confronted with a dilemma.

To remain competitive and ensure the survival of the enterprise, key expatriate executives are being compelled to engage in business practices that are deemed unethical in many parts of the West, but are an accepted way of doing business in other countries. To make matters even more serious and complicated for these U.S. enterprises, the Federal Corrupt Practices Act (FCPA) and other recent legislation prohibits American companies from bribing officials of foreign governments. In response to a series of corporate bribery scandals involving foreign government officials during the 1970s, the FCPA was enacted in 1977 following inquiries by the U.S. Senate and the Securities and Exchange Commission, at which time Congress became concerned that disclosures of corrupt corporate practices seriously undermined public confidence in the business community and harmed America's image abroad (Diersen, 1999).

Clearly, though, the legislation has not had all of the effect that was intended: "For more than a decade, Diagnostic Products Corp.'s employees in China bribed doctors to buy laboratory-testing kits from the Los Angeles company. In May the company paid the price: U.S. authorities fined Diagnostic Products $2 million for violating U.S. antibribery laws" (p. A1). Old ways die hard, though, and bribery and questionable business practices are a reality in many parts of the world where U.S. And other Western interests are seeking new markets; what then are these companies supposed to do? If the company's executives to not "play along" with the local customs and requirements for bribes, for example, the company's initiatives in that country are likely doomed to failure; however, if the company's leadership elects to pay bribes to local officials or otherwise engage in questionable business practices, they may succeed in capturing additional market share in that country but at what price?