Intercultural Business – Drug Tests in India

Case Study Intercultural Business im Studiengang B. A. International Management Thema: Drug tests in India IContents IContentsII IIList of figuresIII IIIList of abbreviationsIV 1Essential moral standards and norms1 2The practical value of economic ethics concepts3 3The RADAR concept5 4Business activity in India8 5Comparison of the cultures9 6Preperation for the NGO meeting14 IV. BibliographyV Declaration IIList of figures Figure 1:Overview of the different business ethics concepts3 Figure 2:Points of the RADAR concept5 Figure 3:Comparison of the differen cultural dimensions9 ?IVList of abbreviations BVVB AGBacteria and Virus Vaccine Biotechnology CRE Ltd. Clinical Researche Enterprise Limited NGONon-Governmental Organisation WMAWorld Medical Association PDIPower Distance IDVIndividualism vs. Collectivism MASMasculinity vs. Femininity UAIUncertainty Avoidance LTOLong-Term Orientation CfConfer ? 1Essential moral standards and norms â€Å"Humans are more moral than they think and far m ore immoral than they can imag-ine. † Sigmund Freud In general moral standards and norms are always based on a culture. Every culture has got its own definition of morality and ethics.Morality can be defined as the standards that an individual or group has got about what is right and wrong, or good and evil. The pharma industry itself includes some essential moral standards and norms on na-tional and international base. First it is necessary to prove moral standards and norms on a global level. The â€Å"Declara-tion of Helsinki† developed by the World Medical Association (WMA) is: â€Å"a statement of ethical principles for medical research involving human subjects, including research on identifiable human material and data. Furthermore this declaration gives essential moral standards and norms according to the pharmaceutical branch, e. g. â€Å"In medical research involving human subjects, the well-being of the individual research subject must take precedence over a ll other interests. † The second part is the national moral standards. In Germany the ethical standards refer to the principle: â€Å"The health is the highest property of a human being. † These standards are set by statue from the â€Å"Zentrale Ethikkommission†. Furthermore German companies always have to obey the German law.The American ethical standards are saying the same in the â€Å"Declaration of Professional Responsibility: Medicine's Social Contract with Humanity. † from the American Medical Association, e. g. â€Å"Respect human life and the dignity of every individual† The focused standards above exist also in India. They are formed by the Indian Council of medical research. All standards point out what the ultimate principle of medical researches is. : All medical tests shall focus on health and care of every human being. â€Å"Act as if the maxim of your action were to become through your will a universal law of nature. Immanuel Kant by Serafini (1989) The definition of moral standards and norms above should be based on deontological ethics. It says that the background and the consequences or effects that an action takes is irrelevant – only the action itself matters. Roughly speaking, deontologists hold that some choices cannot be justified by their effects, no matter how morally good their con-sequences are. Therefore some choices are morally forbidden. But in reference to the drug tests the moral standards are based on the teleological theo-ry.The teleology is characterized primarily by a focus on the consequences which any action might have. That means if an action (drug tests) might be incorrect, but the con-sequence (effective medicine) is correct and helpful, then it is morally correct. Today we are encouraged to act on the base of different ethical frameworks before we are able to make a clear decision about the ethical correctness of our intended actions. The codes of conduct, which are the ethic al guidelines are based on those frameworks. 2The practical value of economic ethics conceptsThe following discussion deals with the four different economic ethics concepts and their practical values. They are defining how to combine ethics and profit in different ways and with their consequences. Figure 1 The different business ethics concepts Firstly there is the functional business ethics concept. If a company act in agreement with certain known rules and under specific ethical conditions it is allowed to gain the maximum profit. â€Å"Ethic† is a â€Å"factor or rentability† or a â€Å"critical factor of success†.That means: The â€Å"investment† in â€Å"ethics† in terms of acceptance of current opportunity costs has its foundation in the strategic aim to save long-term profit chances. This concept is not used by the BVVB AG, because they are not acting under specific ethical conditions. The second concept to focus is the corrective Business e thics concept which implements ethical standards into the daily business. That means companies are acting in their nor-mal economic way but ethics standards always have the priority over profit gaining ac-tions.It is a voluntarily self-limitation of profit maximisation. For the BVVB AG only the profit gaining process matters. The integrative Business ethic is the permanent process of critical reflexion of business activities. Every possible profit and business success should get the legitimisation of all stakeholders. The consequence is that the company might have to abdicate a profit chance. The action of the BVVB AG shows that they are not acting in reference to what the stakeholders defining as the best way. The last concept is the charitable Business ethic concept.The priority is to gain the maximum profit and afterwards the company starts to donate a part of the money for charitable aims. The morality of a business action does not matter anyway. Due to the descriptions of the d ifferent concepts it is clear that the BVVB AG should act based on the charitable business ethics concept. In the current situation it is the highest priority to gain profit and to be successful (=gain the maximum profit). But after having success the BVVB AG should use a part of the gained money to serve non-economical claims.The practical value of the concept is the possibility to define an eth-ical business aim and the commitment to act in a moral and ethical way. 3RADAR concept The RADAR concept serves to take a decision with the comprehension of ethics. In consideration of ethics in the factoring process it could be more difficult to find an easy solution but it might be more suitable for both parties. In the following paragraph the steps 1 to 10 of the RADAR concept, as seen in the fol-lowing image, will be analysed and discussed. Figure 2: Structure and Points of the RADAR conceptRecognize Step 1 Determine if there is an ethical component The component is the drug tests in In dia. The accomplishment of these tests is not un-morally – it is important – but the way the tests will be carried out is morally questiona-ble. The BVVB AG could hold the tests in Europe or the USA but due to finical prob-lems and the necessity of the reduction of costs the tests will be done in a financially weak area in an Indian hospital. Furthermore the BVVB AG does not know if the health of the patient will be always protected. Step 2Check the ethicalness of the ethical omponent against ethical standards For my own values the conditions under which the tests are carried out are not morally and direct against my ethical values. For the BVVB AG it depends on two points. On the one hand India is the cheapest choice for the realization of the test process and on the other hand the company is not acting illegal but the aim is to develop a new effective medicine against illnesses and to test the agent, subjects are needed. On the basis of the Global Business Standard C odex (GBSC) it is absolutely unmorally.The codex considers the point â€Å"Human Dignity†, which requires the protection of hu-man health and the respect of fundamental human rights. Step 3Conclusion In consideration of the mentioned aspects above the implementation of the tests in India is not illegal but they fulfil not the ethical and moral standards. Assess Step 4Who are the key stakeholders? The main stakeholders of the BVVB AG and the new vaccine are primary the internal stakeholders, especially the managers and employees. Because of the financial situation the members of the BVVB AG are reliant on the success of the tests.The external stakeholders are the subjects, without their help the tests cannot be carried out. Step5What ethical standards apply? The CRE Ltd. and the BVVB AG carry responsibility to inform the respondent about the possible side effects and the probability of their appearance. Furthermore the com-pany is responsible to take care about the state of th e subjects’ health. In turn of these duties the subjects have the right to be treated with fairness and dignity. Step 6 How is the proposed action likely to impact them from an e. g. economic and ethical view?The positive long- and short-term effects are that the habitants from India, especially the majority of people from slums, have never had contact to medical treatments or a simple medical examination. For the people who are part of the tests it could lead to the healing of diseases. Contrariwise there also exist some negative effects in a short-term period – the side ef-fects. The subjects could get negative side effects from the vaccine. But the laboratory has figured out medical therapies to heal the serious side effects either by a special treatment or through hospital stay.Step 7See if there is a specification and quantification of the positive and negative con-sequences which could result from the intended action. The performing of the tests in India could re sult in bad or negative reputation. Too much bad reputation could result in a damage of the company’s image and could end up in the loss of clients and creditors. This would indicate that the BVVB AG takes a financial risk. Step 8What could be done to reduce the likelihood of or at least reduce the negative impact? Due to the necessity of the tests the company has to ensure the reduction of negative reports.To avoid them the only way is to guarantee better circumstances of the tests and the security and wellbeing of the subjects. Furthermore the company could assure that India receives some medicine for free to help infected people after a successful conclu-sion of the test series. Decide Step 9 Take a decision The BVVB AG in connection to the CRE Ltd. has to carry out the tests in India, be-cause of the financial situation. To some people it may create the impression of being â€Å"bad† but the real aim something positive one. The vaccine could help millions of people and also Indians.To reduce the negative aspects the tests have to be carried out under better conditions, considering a higher care for the subjects’ health. Step 10 Correct for self-serving biases If I am asked if I want to read about that in the newspaper I would say â€Å"Yes† because reaching better conditions and to ensure the responsible manners with the tests and the well-being of the persons is positive and could have an effect on the image and make other companies to think about their actions. ? 4Business activity in India This paragraph defines some essential facts about cultural conventions in India.To have success on business in India, in my opinion, the first priority is to be familiar with the cultural conventions because the opinion about business differs a lot between Indians and Europeans. The distinctions may lead to misapprehensions. To be accepted and to show respect it is necessary to learn some basic modes of behaviour and funda-mental cultural d ifferences. It could be helpful to learn some basic phrases of the Indian language for having a small-talk but it is not that important to speak perfectly because the Indians speak over 500 dialects e. . people from the north often talks to someone from the south in English. Furthermore it is good to know that Indians never say â€Å"No† because it is impolite to negate something. It is common to say â€Å"I will try it†. Generally it is important to keep in mind that a personal and polite contact between people from every age is ensured. Indians set a high value on trustworthiness. The first contact could be a handshake but it is common to give a friendly nod. Shaking the head does not mean â€Å"No† it is a gesture of attentive listening.Also the way of dressing is important. Women may never show skin, like naked legs or shoulders. Men are allowed to wear shorter clothes if it is hot outside but it has to be suitable for business. Indians are very hospitable. It is common to get or to make an invitation for dinner. Due to the different persuasion there are some different rule for preparation and consump-tion. But it exists a general rule: â€Å"Peel it, boil it, or forget it. † ? 5Comparison of the cultures The following paragraph deals with the different cultures of Germany, India and USA.The distinctions between the different nations and cultures will be discussed and ex-plained with the help and use of the cultural dimensions of Geert Hofstede. Professor Geert Hofstede conducted one of the most comprehensive studies of how values in the workplace are influenced by culture. Figure 3: The different cultural dimensions in comparison of their characteristics source: geert-hofstede. com The 1st dimension – The Power Distance (PDI) Power distance is defined as: â€Å"The degree to which the less powerful members of a so-ciety accept and expect that power is distributed unequally. The undamental issue here is how a society han dles inequalities among people. People in societies exhibiting a large degree of power distance accept a hierarchical order in which everybody has a place and which needs no further justification. In societies with low power distance, people strive to equalize the distribution of power and demand justification for inequalities of power. † The comparison of the cultures in the diagram shows that there is a high difference be-tween the USA, Germany and India. The low score of Germany (35) and the USA (40) in this dimension shows clearly the general proposition of â€Å"liberty and justice for all†.It is common that both managers and employees expect to be engaged and information is shared frequently. Also both cul-tures have in common that the communication style is direct, informal and participative. Furthermore in both cultures there is no strict hierarchical order established. But in India on the contrary there is a relatively high power distance (77). The hierarchical structure is hard in organizations as well as in society. Also the real power of managers and control is high and accepted. The communication style differs totally from the western and European style.Someone would never be criticized if there is a 3rd person in the room and the communication is top – down. In contrast to Germany and the USA, where also an employee may criticize a manager, in India an employee would never give negative feedback to someone who is up the ladder 2nd dimension – Individualism versus Collectivism (IDV) Individualism, the high side of this dimension, can be defined as: â€Å"A preference for a loosely-knit social framework in which individuals are expected to take care of them-selves and their immediate families only. And collectivism, the low side of this dimension, can be defined as: â€Å"A representation of a preference for a tightly-knit framework in society in which individuals can expect their relatives or members of a particular in -group to look after them in exchange for unquestioning loyalty. † A society's position on this dimension is reflected in whether people’s self-image is de-fined in terms of â€Å"I† or â€Å"we. † As seen in the 5-D-Modell, all three countries and their cultures have different levels of this dimension. The USA, with a score of 91 is highly individualistic.That means it is common that people in general first look and take care for themselves and their families. The Ameri-cans are mostly doing business with strangers and employees are expected to be self-consistent. Germany scored 67 – truly individualistic. In comparison to the USA the bigger family means a lot to the Germans, especially the parent-children relationship. Loyalty, duty and responsibility are common. In business it is common to give someone an advice if there was a mistake to give him the chance to learn from it – â€Å"Be honest, even if it hurts†.In contrast to Germany and the USA India is clear collectivistic with a score of 48. To Indians it means a lot what the social framework is thinking about an action and they are asking for advice. Also in business everything starts with a personal relationship, especially hiring and promotion. 3rd dimension – Masculinity versus femininity (MAS) This dimension is defined as: â€Å"The masculinity side of this dimension represents a pref-erence in society for achievement, heroism, assertiveness and material reward for suc-cess. Society at large is more competitive.Its opposite, femininity, stands for a prefer-ence for cooperation, modesty, caring for the weak and quality of life. Society at large is more consensus-oriented. â€Å" The fundamental issue here is what motivates people, wanting to be the best (masculine) or liking what you do (feminine). All three cultures are considered a â€Å"masculine† society (scores 56 – 66). Children learn from the early times on that performance is highly valued and the people â€Å"live in order to work†. It is also relevant to be authorial, assertive and decisive. Their behavior stands under the conditions â€Å"strive to be the best they can be. and worldwide known sentence: â€Å"the winner takes it all! † All cultures love to show their success through material objects. For Indians â€Å"work is the center of life† and the workplace serves as symbol of success. 4th dimension – The Uncertainty avoidance (UAI) The uncertainty avoidance dimension expresses: â€Å"The degree to which the members of a society feel uncomfortable with uncertainty and ambiguity. The fundamental issue here is how a society deals with the fact that the future can never be known: should we try to control the future or just let it happen?Countries exhibiting strong UAI maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and ideas. Weak UAI societies maintain a more relaxed attitude in which practice counts more than prin-ciples. † Concerning the Uncertainty avoidance the cultures have differences. Americans accept new ideas and innovations. They are more tolerant of ideas or opinions from anyone and allow the freedom of expression. Indians also have a lower preference for avoiding un-certainty. They have a high acceptance of imperfection and do not follow strict rules.Indians say: â€Å"nothing is impossible†, as long as one knows how to â€Å"adjust†. In comparison Germany scored high (65) and they follow deductive methods. For Germans it is important to have a plan. Every action has to be systematically and de-tailed planned. Germans prefer to compensate for their higher uncertainty by strongly relying on expertise. 5th dimension – Long-term orientation (LTO) â€Å"The long-term orientation dimension can be interpreted as dealing with society’s search for virtue. Societies with a short-term orientation generally have a strong concern with establishing the absolute Truth.They are normative in their thinking. They exhibit great respect for traditions, a relatively small propensity to save for the future, and a focus on achieving quick results. In societies with a long-term orientation, people believe that truth depends very much on situation, context and time. They show an ability to adapt traditions to changed conditions, a strong propensity to save and invest thriftiness, and perseverance in achieving results. † America and Germany have a relatively low score in this dimension. That means they are more short-term oriented.In business people strive for quick results and a strong concern with establishing the truth. The Indians in contras have a long-term orientation, time and punctuality does not matter and they never follow the exact plan, if there is a plan existing. ? 6Preperation for the NGO meeting â€Å"Morality is temporary, wisdom is permanent. † Hunter S. Thompson For the meeting wi th the NGO? s in India it is necessary to know what they are criticiz-ing on the project. They are criticising that the BVVB AG is exploiting the Indian popu-lation due to the tests in India.The need of that meeting is to convince the members of the NGO about the necessity and benevolence of these tests. It is obvious that the BVVB AG in cooperation with the CRE Ltd. is doing the tests in India in order to eco-nomic and financial reasons. But due to the extensive economies it could also be beneficial for India, especially if the BVVB AG decides to act on the charitable business concept. The non-attendance of tick-bourne in India does not matter for testing the medicine. The danger to contract an infection is small and there is also existing medicine and plans how to heal the people in case of an infection.Furthermore it is of a high importance to know everything about the negative media reports. To convince the NGO about the tests it would be helpful to adjust with the BVVB AG manag ement if it could be possible to donate a certain contingent of the profit and also to donate a certain percentage of the vaccine to India to combat the leprosy virus. Furthermore it could be helpful to assure that the CRE Ltd. will care for good circum-stances. The subjects will get a good treatment and the welfare will be ensured.Due to the fact that Panjaa is a Non-Governmental-Organization it would be not effec-tive trying to bribe the organization with money. It would be more effectively to show them the good sides of the tests for the Indian nation. ? 1. Bibliography Literature FREUD, Sigmund (1930), â€Å"Civilisations and its Discontents† KANT, Immanuel, â€Å"Good Will, Duty, and the Categorical Imperative,† ed. Anthony Serafini, Ethics and Social Concern (1989) (New York: Paragon House Publishers) LIPPER RASMUSSEN, Kaspar (2005) „Deontology, Responsibility and Equalityâ€Å" SALZMANN, Todd A. 1995), „Deontology and Teleologyâ€Å" ULRICH, Peter (2008), „Integrative Business Ethics: Foundation of a Civilized Market Econo-my† ULRICH, Peter (1997), â€Å"Integrative Wirtschaftsethik – Grundlagen einer lebensdienlichen Okonomie† Web research Homepage from the World Medical Association: â€Å"The Declaration of Helsinki†. 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