When we talk about ethics, we normally think of “compliance” “act with integrity”, “inclusive”. But when we, as staff, are from different departments. We have our own KPIs and department KPIs. When that conflicts with company long-term interest, how shall we make decisions?

The view from our Professor Mr. David is very useful. We shall consider 3 Ps. The meaning to me is that: 

Perspective: We need to consider what is short term benefit and what is long term benefit. Shall we sacrifice our long-term benefits to get short-term advantage?

If so many success story proved that we uphold business ethics will get long-term benefit, then we, as an individual, shall learn “delay gratification”. The company’s success will eventually reward ourselves.

Proximity: It means nearness in space, time, or relationship. Sometimes, culture may affect our decisions, but “Moral Absolutist” is tested to be less powerful than “Utilitarianism”. The left brain, where reasoning dominates, make more influential decision.

Punishment: Law and punishments are the primary incentives. Businesspersons owe a duty to act ethically in the conduct of their affairs and not to harm society. But not all ethical standards have been enacted as law. Law may demand certain conduct that seems unethical. We can’t using law as our ethical standard.

China, as a country with a history 5,000 years, has the concept from Confucius:

道之以政，齐之以刑，民免而无耻；

道之以德，齐之以礼，有耻且格。

Which means.

“If the people be led by laws, and uniformity sought to be given them by punishments, they will try to avoid the punishment, but have no sense of shame.

If they be led by virtue, and uniformity sought to be given them by the rules of propriety, they will have the sense of shame, and moreover will become good.”

It aligns the core value of Confucius:

修身，齐家，治国，平天下.

Which means:

“Self-cultivation, Family Harmony, State Governing, and World Peace”

The lesion learned is that, when in a difficult situation, use the 3Ps to look at the issue and make judgement. From the case study of “Culture Clash in the Boardroom”, which is the most attractive story for me, as it is somewhat the similar situation with our current company, is a success story that Ethics is above profit and gain success in long run.

Briefing of the case: The JV (Chinese and German) faces a dilemma situation: as the revenue is not good, shall the company cut cost and have better sales with profit margin, or shall the company stick to its global strategy to uphold the higher standard which adding cost?

It is reasonable that different people have different principle of the ethics at the individual level.  The Chinese should not be faulted for their pursuit of profits, and the Germans should not be faulted for standing up for their values. Both profits and values matter. The key is to find a solution that compromises neither.

Step one: Get mutual understanding. (Proximity). The leader Mr. Liu must persuade the Chinese side with emotion and the German side with reason, his job of mediating a resolution will be far easier. Mr. Liu shall explain the value for both parties, and also reveal the risks ahead. For example, companies like Almond are right to adopt higher standards than Chinese law mandates, because in the long run the costs will be much greater if problems become serious. Environmental protection is a necessity in China. And without adherence to safety protocols, China’s economic success cannot be sustained.

Step two: Resolve this specific conflict. (Perspective and Punishment). The leader Mr. Liu needs to identify other areas of compromise. For example, if the joint venture’s products are for export, the high German standards should be upheld. But if the products are for domestic sale only, guidelines that comply with Chinese law may suffice. A company may achieve short-term success if it bows to hidden rules, but in the long term it will eventually fail.

Step three: Make decisions. The two sides should figure out together what is best for the venture as a whole, over the long term. For example, Almond needs to lead the way by setting the standards for safety and ethics.

This 3Ps and the case suggested solutions are very useful for my own company. I will use it in my work.