Taking Your Code to China

Abstract

"The proliferation of codes of conduct and ethical standards among American and European companies has been dramatic over the past twenty years. It is rare today to find a large publicly held company in the West that does not have some type of code and is not involved in the growing dialogue over global standards of conduct. But one of the most difficult challenges facing these companies is how to apply these codes and ethical standards to the companies' operations in developing countries, particularly in Africa, the Middle East and Asia. Perhaps the most urgent challenge is for each company to decide how to adapt and apply its code in China. Companies such as Rio Tinto, Google, and Honda are recent case studies in ethical conflicts arising from doing business in China. With pressures for human rights, environmental sensitivity, and the fight against corruption rising in their domestic homes and in global commerce, nothing is more critical to these companies' reputations and success than learning how "to take their codes to China." This article presents the learning of the two authors and the companies they have consulted and worked with over the last ten years in China. Our experience is that Western companies have generally progressed little in applying their codes to their operations in China. This article summarizes why it is so difficult to do so, and what the most successful companies are doing to make it work."