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International Business: Honesty is the best policy for global business

Published: Friday, Aug. 19 2011 7:34 a.m. MDT

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“By opening this email, you have activated the Amish computer virus,” reads a commonly forwarded email. “Since the Amish don’t have computers, this works on the honor system. Please delete all your files and forward this message to all your contacts. Thank you.”

The only thing infectious about this paradox of a virus hoax is that is tends to spread laughs. However, this good-natured joke also reminds us that the honor system has become quite foreign to many people in our modern American culture.

The “foreignness” of honor codes was emphasized in the sports industry during the 2010-2011 NCAA basketball season, when the Brigham Young University team elected to follow its honor code and suspend a key player at the risk of losing hundreds of thousands of dollars in NCAA tournament money. The team was discussed in some circles as if it did not exist in the same world as the rest of us, but was generally applauded for its bold move, somewhat mitigating the financial loss. Although high levels of honor and honesty may seem be forgotten in many circles, maintaining a standard of honesty and fair dealing is good for business in the best and worst circumstances.

Shortly after the March 2011 earthquake and tsunami in Japan, news outlets worldwide began relating touching stories of Japanese honor and honesty displayed in the most difficult circumstances. Many Americans have been amazed at Japan’s order and respect for property, particularly when contrasted with the looting and chaos that followed Hurricane Katrina in the United States and the senseless looting by American criminal flash mobs that commit theft without the cover of a natural disaster.

“In the five months since the disaster struck, people have turned in thousands of wallets found in the debris, containing $48 million in cash,” reported Akiko Fujita of ABC News on Aug. 17. “More than 5,700 safes that washed ashore along Japan's tsunami-ravaged coast have also been hauled to police centers by volunteers and search and rescue crews. Inside those safes officials found $30 million in cash. One safe alone contained the equivalent of $1 million.”

“Survivors (politely wait in line) for eight or more hours for food and water,” marveled Miranda Devine of Australia’s Herald Sun shortly after the tragedy in March. “The rest of Japan voluntarily reduces non-essential power use, reducing the need for official blackouts. Shops in Tokyo tell customers: ‘Only one bottle of water per person. People are thirsty.’ Workers go back to their desks on Monday morning, despite blackouts and slow trains ... Shoppers in a mall when the earthquake hits run outside with merchandise, and when the tremors subside, they go back inside to pay for the items.”

How much more difficult would it be for Japanese families and businesses to recover if even more life and property had been lost to selfish violence and looting? Instead, the recovery is being aided in large part because Japanese culture not only resists selfish chaos but also promotes unselfish giving.

Just as your parents likely taught you, honesty is best not only in disaster recovery, but also in normal, day-to-day life. In the international business arena, free markets worldwide simply would not be able to function without a minimal expectation of honesty, as partially evidenced by the fact that investments in countries with high levels of fraud and corruption are naturally more volatile.

Transparency International’s Bribe Payers Index ranks dozens of countries based on the likelihood that companies within that nation will offer bribes. Knowledge of such expectations can help international businesses prepare not only to avoid general risk, but also to avoid violating the U.S. Foreign Corrupt Practices Act.

We must remain aware, however, that sometimes one culture’s view of honesty will differ greatly from our own. For example, nepotism may seem dishonest in Western culture, but acceptable and even necessary in some Middle Eastern and Asian cultures. Other times, a foreign culture’s expectation of honesty will seem to be much stricter than our own. Some cultures translate the importance of honesty to a very direct style of communication. For example, in Norway or New Zealand, businesspeople may expect less hype and self-promotion in discussions. Their attitudes can result in a refreshingly frank exchange of information.

We can all benefit from the examples of cultures — such as the Amish and Japanese cultures — that strongly value honor and honesty. If every business and employee acted with integrity, deals and relationships across the globe would be much less risky and much more profitable to all parties. Except when faced with the paradox of an Amish computer virus hoax that tells you to delete your own files, honesty is still the best policy.

Adam Wooten is director of translation services at Lingotek. He also teaches a course on translation technology at Brigham Young University. Email: awooten@lingotek.com. Follow him on Twitter at AdamWooten.

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