Analyzing Ethical Issues in Sri Lanka and New Zealand Business

This report assesses the ethical considerations for a firm expanding into Sri Lanka and New Zealand, focusing on political, legal, economic, and cultural factors. For Sri Lanka, key ethical issues include bribery, adherence to local laws, labor exploitation due to low wages, and cultural sensitivity. In New Zealand, the report highlights corruption, compliance with evolving legal frameworks, economic considerations related to taxation and subsidies, and cultural factors such as discrimination and motivational issues for local employees versus foreign hires. The analysis uses a PESTLE framework to compare the risks and benefits of each country, ultimately recommending Sri Lanka due to its lower barrier to entry despite higher initial risks. The report emphasizes the importance of ethical conduct and compliance with local regulations for successful internationalization.

Running Head: Global Business Assessment
Global Business Assessment
Ethical Issues in Sri Lanka and NZ

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Contents
Ethical Issues for Sri Lanka...........................................................................................................................2
Ethical Issues for New Zealand....................................................................................................................2
References...................................................................................................................................................4

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Ethical Issues for Sri Lanka
1. Political Issues: The biggest political ethical issue for Sri Lanka is bribery. There have
been cases where companies have emails which reveal that Sri Lanka President Sirisena
and his advisor had demanded Political “donation” for international business etc (Ozturk
& Gokmen, 2012).
2. Legal Issues: A firm has to abide with the new rules of the country in which it wants to
put its subsidiary in. The foreign company cannot secure its place in Sri Lanka for 50
years. Issues like bribery, breaking legal code of conduct could be some issues that might
happen in such cases.
3. Economic Issues: The economy of Sri Lanka is quite calm and generally has no
restrictions when it comes to foreign investment. Yet the labor cost is too low there and
the people are highly skilled. Ethical issues like labor harassment or overpowering the
labor could be one of the major ethical issues (Ruwanpura, 2014).
4. Cultural Issues: Culture of the country is has mixed heritage of Buddhism and British
Colonial heritage. Hence, people are very calm minded there and do not except any
rudeness. Issues related to moral obligations and code of ethics might occur in Sri Lanka.
Ethical Issues for New Zealand
1. Political Issues: The ethical issues in New Zealand would be the same i.e. corruption and
bribery as Sri Lanka for the Australian company. There were researches where the data
revealed that corruption was really high in 2016 in New Zealand and that challenges the
manufacturing sector on the whole but especially for international business (Nwaeke,
2014). There are some other political issues which can become the part of the company
when it wants to do the business in New Zealand. Apart from bribery, there can be
terrorism, corruption, threat to the stakeholders in terms of money etc. One more thing
which is vital to take care for the new firm while establishing in New Zealand is
organized crime. Many firms have to deal with this crime as sometimes the politicians as
well as the firm stakeholders want themselves to indulge in the crime to make more

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money and good profits in the new share market. Out of multiple groups like these,
mostly every group is motivated by the politicians to do such type of crimes. As it is the
data displays that there is a lot of corruption in New Zealand. This is the most happening
crimes of all in today’s world as both the firm as well as the political parties and other
groups are at profitable side.
2. Legal Issues: The legal ethics for New Zealand is linked with the political laws of the
county. Rule of law performance is one legal factor which there is eight factors which are
considered. They are considered under the law of index for the measurement of
performance. One of the major factors out of eight is: absence of corruption. Hence, the
legal ethics can be made safe for any international company is to not breach the political
laws. Also, the county government changes every year and hence, changes the rules too.
The new company will have to abide with the new rules ever year which can be difficult
as well as there are more chance of breach in this case. There can be discrimination done
in the gender, sex and age of a person when it comes to working in the firm which is
establishing itself in New Zealand. The Australian culture is free and mostly does not
discriminate within people but in New Zealand, people are more concerned about their
education, their religion. This concern of religion totally contradicts the law of no
discrimination which New Zealand’s legal system abides with. The Australian firm can
become confused and this might lead the firm to the legal ethical breaches.
3. Economic Issues: The economy of New Zealand always depends on the Gross domestic
product and FDI. The export of the abundant products is done from New Zealand and the
product with scarcity is imported every year. This involves taxes on products and
deduction of subsidies. There can be ethical breaches related to paying the taxes.
4. Cultural Issues: The culture of the county depends majorly on the education and language
factors on the whole with some other factors like technology, religion etc. The
manufacturing of the products depends on the residents of the country. The literacy rate
of New Zealand is too high and use of technology is majorly done. The ethical issues
which can occur in New Zealand could be related to the motivational factors and the
foreign company investing in and hiring people who are from Australia. According to the
country, not giving preference to people of New Zealand is unethical (Marco, 2016).

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References
Marco, J., 2016. Business ethics: international analysis of codes of ethics and conduct. Revista
Brasileira de Marketing, 16(1).
Nwaeke, L., 2014. Ethical Challenges in International Business Operations. Journal of Business
and Retail Management Research, 8(2), p.105.
Ozturk, T. & Gokmen, A., 2012. Issues of Business Ethics in Domestic and International
Businesses: A Critical Study. International Journal of Business Administration, 3(5).
Ruwanpura, K.N., 2014. Ethical Trading and Sri LankanLabour Practices in the Apparel Sector.
[Online] Available at: http://www.ari.nus.edu.sg/wps/wps14_222.pdf [Accessed 12 October
2018].