About Leadership: Cultural and Moral Relativism

11/18/2011 06:47 pm ET | Updated Jan 17, 2012

A company that operates globally faces some difficult challenges when it comes to deciding what it will and will not do. It seems easy enough, sitting in a US or EU headquarters building, to make statements like "we hold the same environmental standards for our operations wherever we operate in the world" or "our company supports the principles set forth in the UN Universal Declaration of Human Rights," but how do these statements translate into actions in Africa, the Middle East, rural China, Russia, and lots of other places?

Environmental issues are widely discussed. What about the social issues? How difficult is this? Well, a quick reading of the UN Universal Declaration of Human Rights gives you a pretty good idea of how difficult. For example, Article 21 states, "the will of the people shall be the basis of the authority of government; this will shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures."

Now, how many multinational companies are operating in countries where this is not true, while simultaneously saying on the websites that they are supporting the principles of the UN Declaration of Human Rights?

And what about Article 16?

(1) Men and women of full age, without any limitation due to race, nationality or religion, have the right to marry and to found a family. They are entitled to equal rights as to marriage, during marriage and at its dissolution.

(2) Marriage shall be entered into only with the free and full consent of the intending spouses.

Well, this is a challenge to some of the countries many of us work in. And in case you haven't looked at it for a while, there are 30 articles along these lines, and a meaty preamble as well. But then again, we can't really imagine the counterfactual of any US or EU company stating "we do not support the UN Universal Declaration on Human Rights" as its policy, now can we?

So there are some tough problems. And I think that basically, these come down to issues of culture and morals. Wherever we operate, we need to be sensitive to cultural differences. These differences often manifest themselves in the roles of men and women in societies. Or in how business, or government regulation, is done. What constitutes a political contribution, what is an appropriate level of entertainment to offer to a government official, or what it is appropriate to accept.

But while we behave in a culturally sensitive way, we must always have in mind our morality. A company must know what behavior violates its moral codes, and would be unacceptable wherever it was practiced. In other words, we can accept and work across a wide cultural relativism, but we have no space for moral relativism.

Does this get us out of the dilemma I posed about the UN Universal Declaration on Human Rights? I think it can, if we reason along these lines:

The UN Declaration is not a statement of how the world is today, but our goal of how we want it to be. So our support of it is a statement that our company not only supports the goal, but also is working towards achieving it.

This is an important statement -- because it says that as a global corporation, we have goals other than just making money this quarter. Our business in a country is for the long term, and in the long term that business will survive and prosper under conditions where human rights are respected.

Now what do we mean by "working towards achieving it?" Well, it means that we believe that we can be a force for good in the country. And this is not just about contributing to the local museum or building a school, however much those both might be good things to do. It means that we can see a way that money that stays in the country, and in particular with the government of the country, is leading to the human rights goals we support.

Making decisions about this is always difficult. How does a company decide that it is possible to be a force for good in Angola but not Sudan? Only by thinking through the systems in place, or that can be put in place, and ensuring that they work in line with our expectations. It takes tough minded people, both in the corporate centre and in the countries where we operate, people who are able to build relationships that allow for the sort of communication on these issues that leads to change.

So in our global corporations, we are always being sensitive to cultural differences, but we also know our moral code. As a result, we know where there is a line that we cannot cross. Cultural relativism is not only acceptable, it is an important part of working in the global corporation. Moral relativism is not only unacceptable, its unacceptability is a crucial part of the work of a global corporation and of clarifying the company's principles.

"About Leadership" is a series of 52 columns on corporate leadership - essential skills, leading teams, managing your career, the strategic and business practices to make a company and its leader distinctive from competitors. These columns will be of interest to people leading small and medium sized companies today, many of whom have not had much formal training in management skills and techniques; for the many people in big companies who aspire to senior management; and for anyone who thinks: Give me a hint, how can I do this better?