Differing Perspectives

Differing Perspectives: U.S. and European Business Ethics

Abstract
In 2002, Robert Kagan, then Senior Associate at the Carnegie Endowment for International Peace, wrote the groundbreaking treatise “Power and Weakness,” comparing American and European perspectives and policies as they relate to global power. He concludes that the two mindsets are so divergent that indeed, Americans are from Mars, Europeans are from Venus; a nod to the iconic John Gray work. If business is power, then this divergence may also translate to the realm of business ethics, and for many of the same reasons: economics, academics and the level of cultural collectivism inherent in these societies. Here, literature reflecting three very different methodologies
The author’s presentation included no illustrations or exhibits, so key points have been synopsized in the following tables for ease of reference.
Compelling Conclusions
The cultural environment.
Cultural Influence United States Europe
Societal Concerns Individual freedom, human rights, democracy Social justice, egalitarianism, participation
National Identification Strong awareness of American citizenship Strong identification with individual nationality as opposed to a European orientation
Expectations of the State The State is minimally responsible for addressing structural challenges and the social welfare system is limited The State is responsible for addressing ethics, justice and social welfare.
Confidence in Free Market Economics High Varies among nations; but in no instance higher than the U.S.
Role of Religion Often indirectly linked to political policy; respect for religious diversity Rarely addressed in political policy
Role of Regulation Minimal – free market perspective Economic activity requires regulation to accommodate societal
The first, that by definition, American firms focus the practice of discrete, situational business ethics. European firms focus on their responsibility to society. The second, somewhat ironically, is that American firms are far more likely to interact with, and contribute to, the community in which the enterprise operates.
Government Involvement.

Governmental Oversight United States Europe
Federal Regulation of Employee Rights Limited. Employee rights are part of the individual firm’s corporate responsibility Extensive legislation on employee and consumer rights. CSR explicitly fostered by some national governments.
Incentives for Ethical Behavior and CSR Firms are rewarded for adapting ethical practices internally Incentives not deemed