End of unit activity: Ethics in business

The following mini case study illustrates an example of different concepts of ethics. Read through it and answer the question: if you were in the author's situation, what would you feel and what action would you take?

Mini case study: Should I take the apartment?

My team and I were in London for a short stay, working with a UK-based client.

As part of the contract with our client, my team was to be reimbursed for our London living expenses. Our contract specified that we needed to make every 'reasonable effort' to sign a short-term lease (13 weeks) and to reduce costs related to this expense. However, the contract also had a clause allocating sufficient funding for us to sign a lease for 26 weeks if necessary.

To assist us in finding housing, my Indian colleague offered to contact a 'friend'. This 'friend' failed to find us a short-term lease, instead locating an apartment with a 26-week lease. Additionally, the lease cost 8,880 USD in total, the exact amount the client had allotted as the maximum housing expenses. My Indian colleague was very happy with the apartment and suggested we sign a lease form 'immediately'.

My dilemma was whether I should risk insulting my Indian colleague by not accepting the apartment arranged by his 'friend', as I believed that the transaction did not seem 'fair'. If I failed to do this, it seemed likely that my client would question the legitimacy of such an odd transaction. I believed that this would cause my own integrity to be put in doubt. Additionally, even if their auditors did not notice the 'coincidental' nature of the transaction, I could not help but feel it would be unethical if we did not abide by the contract and make 'every reasonable effort' to reduce costs.

Browaeys & Price (2011, p. 371)

You may have one of the following reactions:

1. I do not want to insult your friend, but at the end of the day, business is business and we have a responsibility to be fair to your client. I will tell my Indian colleague that I do not feel it is right to rely on a 'friend' for a business matter and suggest that we look for cheaper accommodation with a 13-week lease.
2. Although I feel a little guilty about our client, I want to keep a good relationship with my colleague, so I will agree with his suggestion. I will be working with him for a long time, while we will be working for this client for just 13 weeks. Also, the contract allows for a lease of up to 26 weeks and 8,800 USD anyway.
3. I do not know why the author has this dilemma. I think it is a very good idea to use your personal network to benefit one another. The accommodation meets the limits identified in the contract and the 'friend' gets credit for finding what we need - go for it!

Your reaction is formed based on your cultural values. Although you may not agree with the other reactions, none is wrong. You may encounter these types of reactions in cross-cultural situations - in some countries, bribery is widely accepted in practice.

It has been suggested that there is a relationship between ethics and legality (Francesco & Gold, 2005), but when interacting with those from other cultures, people benefit from withholding ethical judgement until they have clearly described the behaviour and examined various interpretations of it (Gudykunst & Kim, 2003, cited by Browaeys & Price, 2011).