Cultural relativism This is the empirical fact that cultures differ, common practice or socially acceptable behavior in one culture or society might not be in another. (An extreme version of CR holds that if you live in culture A you cannot fully understand culture B). Ethical (moral) relativsim This is the philosophical normative position that different moral rules should apply in different societies. It is best understood by contrasting with ethical absolutism, which is the idea that there is one set of moral rules for all humankind, but it just takes some societies a longer time to realise this and to behave properly. There is evolutionary version of MA: developing or evolving towards human or trans-human perfection, or highest consciousness; and a theological version: “Gods’ rules for everyone” Several Inter-related conflicts that leaders have to manage: Conflict of cultural tradition (e.g. Italian Tax case) Conflicts of relative development. (e.g. wage rates, employment decisions, product safety rules in LDCs (e.g. Global Profits case) Conflicts about political values e.g. capitalism vs. alternatives, eg patenting of LDC agricultural products, etc. 23

Cultural relativism is expressed by “When in Rome do as the Romans do” A US computer co. in Saudi Arabia gave harrassment training. It seemed highly out of place, not well received, Why? In India, it made sense to offer a job to the employees’ child (even if another more qualified) In order to keeps families together. gift giving and bribery are viewed differently in US and Japan (e.g. the infamous Lockheed scandal led to the FCPA in USA. In the Shell case: the above proverb seems irrelevant. Why? Donaldson notes the need to balance: core human values / minimal ethical standards, ie hyper- norms respect for local traditions Since the context is important, here is a “Moral free space” where good judgement is needed 23

Donaldson (cont.) & the “Asian values” debate So called “Asian values” have Western counterparts, some of which are in tension with US/UK style capitalism Kyosie (common good), Dhama, (inherited duty) Santutthi (limit desires), Zakat (help poor) Confucian ideas are quite similar to Plato’s, but he emphasised loyalty within family (filial piety) and harmony as “human goods” Loyalty can now be problematic: loyalty to whom? when to “whistle- blow”? Harmony: still very relevant e.g. balanced scorecard, synthsis and multi-capital synergy (profit, employees, environment). There are many media stories about “Confucian capitalism and Kantian capitalism. What do these phrases mean? 23