Discussion Title: Different Ethical Perspectives Read the article “Business Ethics in Russia: Natasha’s Choice” by Moshe Banai located in Insights (pp. 9-11). Debate on the following issue: What should Natasha do? Answer the following questions: If you were Natasha, what would your decision be? Why? What are some potential consequences of your decision? What type of “background” is relevant to this situation (e.g., Russian history, other factors, etc.)? Look up definitions for the terms “absolutism,” “relativism,” and “rationalization” as they relate to ethics. Apply these definitions to this case and comment on which one(s) apply to your decision choice.

$6.00

Discussion Title: Different Ethical Perspectives

Read the article "Business Ethics in Russia: Natasha’s Choice" by Moshe Banai located in Insights (pp. 9-11). Debate on the following issue: What should Natasha do? Answer the following questions:
If you were Natasha, what would your decision be? Why? What are some potential consequences of your decision?
What type of "background" is relevant to this situation (e.g., Russian history, other factors, etc.)?
Look up definitions for the terms “absolutism,” “relativism,” and “rationalization” as they relate to ethics. Apply these definitions to this case and comment on which one(s) apply to your decision choice.

 

Here is the article :

BUSINESS ETHICS IN RUSSIA: NATASHA’S CHOICE*
* Some information in this case has been altered to protect people’s identity.
atasha is a new Russian entrepreneur. For the last three Nyears she has been running her own wholesale station- ary business in the town of Perm, in Tatarstan, Russia. Tatarstan is a Russian state with about 3.25 million inhabitants of whom half are Tatars and therefore Muslims, and the other half are Russian and therefore Orthodox Christians. The two groups have lived peacefully together for the last four hundred and fifty years, married each other to the extent that many peo- ple cannot define themselves as Russians or as Tatars anymore.
Natasha’s company imports various stationary items from Korea and from Finland and sales it to local schools, shops, and bodegas. The company consists of five people: Natasha who is doing the procurement, her partner Guzel who is in charge of marketing and sales, an office clerk, a bookkeeper, and a driv- er. The company’s monthly turnover is $200,000 of which about 30% is in revenue. Natasha pays her suppliers in advance and she pays her workers fairly. Her federal, state, and city taxes amount to about 35% of the profit. She invests the rest of the money in the company’s growth and keeps very little in saving for herself and her old mother with whom she shares a two bedrooms apartment in a suburb of the city. Her life ambi- tion is to save enough money to build a house in the suburb for herself and her mother. She wants her mother to have comfort- able life during her retirement age.
Natasha was a student at the local university when the 1991 peaceful revolution took place in the Soviet Union. She has completed her studies successfully in Mathematics and Engineering, hoping to join one of the research departments of the local military complex. Her mother was a dedicated mem- ber of the Communist party and as such Natasha’s way into a research function was paved. However, the changes that took place in Russia at the time made many of the factories in her area redundant and it was impossible for her to pursue her dream of becoming a researcher.
She joined the military complex as an engineer trying to convert this mammoth into a civil factory but her plan was shuttered again when the factory closed its doors in 1993 and all the workers found themselves unemployed. However, dur- ing her two years work for the military complex she had met Nail, an entrepreneur who was dealing with that factory, buy- ing and selling Polyethylene and its products.
INSIGHTS
Volume 3 No. 4 2003 # 9
MOSHE BANAI
Baruch College, CUNY

 

 

Anil was an engineer in a chemical complex. He had decided to exploit the available government loans and to go on his own – establishing a private busi- ness. With a partner, he had leased a vacant building from the chemical com- pany within the security wall that guarded the company, thereby, securing his new factory. He secured a loan from a bank and purchased a few plastic injec- tion machines. The raw plastic was provided by the chemical complex and was used to produce plastic bags and other simple plastic products such as table- cloths and decorative plastic panels. There was a high demand for the facto- ry’s products and Nail recruited about 80 workers to men the production line over two daily shifts.
Since Nail did not speak English he needed Natasha as a translator to com- municate with foreign suppliers of machinery and with potential buyers. He offered her this very sensitive job and she got involved in the in-and-out of the company, accessing most of the confidential information that was available only to the company’s owner and his partner. After a couple of years Nail trust- ed Natasha to the extent that he decided to assign her as the Director of Human Resources. Natasha learned a lot about business management and worked happily for Nail and his partner till Nail was assassinated while getting ready to drive from home to the factory on one if the first mornings of the spring of 1997.
Nail’s partner took over and became the CEO of the company. Not only that he did not trust Natasha but also at one point in time he sexually abused her. She decided to quit the company and to look for another job. Luckily enough she was introduced to an US citizen of a Korean origin who was build- ing a large restaurant in the center of the city in partnership with the city’s gov- ernment. She was in charge of translating the details of the deal to the gov- ernment’s officials who did not speak English. While working for this enter- prise she had established good contacts with Korean suppliers of various office stationary and supplies. The cooperation between the US investor and the gov- ernment went array and he had to leave town and his investment behind.
Natasha found herself out of a job again. She decided that this was her opportunity to use all the knowledge that she had accumulated and to establish her own private business. She has found a woman partner and together they have gathered all their personal assets, rented a small office, and ordered the first shipment of stationary from Korea. They found a good market niche and their success was immediate.
A few months after they started the company two men appeared in their office. They asked to speak with the owners and Natasha, assuming that they were potential customers, invited them in. They presented themselves only by their first names and suggested to Natasha that "it was not good for two women to work alone" and that Natasha and Guzel needed partners to secure their business. They said that the competition may drive their rival to try and sabotage the stationary business and therefore they made an offer that the two women ‘could not refuse’ – to protect the business for a service charge of 30% of the profit. In the absence of alternatives the two women treated their new partners as "their charity". Despite the heavy unexpected added ‘tax’, the two
women were doing well and the business grew up, with more and more sat- isfied customers buying from them every month.
A year ago, Natasha has discovered that her bookkeeper, also a woman, had stole $6000.00 from the company’s coffer. Natasha had fired the book- keeper immediately and asked her to return the stolen money. The book- keeper said that she did not have that amount of money and that she could not repay the debt. Natasha knew that if she would decide to take her client to court she might never see her money again. Any business dispute brought to court requires the companies to expose their business financing and there- by attract the tax police that have a reputation for being unjustifiably hard on business. Natasha excluded this option and decided to call "her charity men" to collect the debt for her.
Natasha was surprised with the speed that the "charity organization" came back to her. The two men told her that the mother of the ex-bookkeep- er, who did not want to pay her debt, lived in her own apartment in the city. They suggested that they should force the old lady out of her home to go to live with her daughter. Then they would sell the apartment and split the cash in such a way that Natasha would collect her debt and they would collect their 30% "mediating fees."
Natasha does not know what to do. If she gives the green light to the "charity men" to execute their plan she knows she would feel guilty about her decision to the rest of her life. After all it has been her life ambition to make sure her own mother lives comfortably in her late days. If she goes to court she may lose twice: Once, the court’s decision may take a long time to sort out during which the tax police may raid her business and probably make her pay large sums of money. Second, the ‘charity’ men might get very upset since they may lose some potential money that they hoped to collect as ‘mediators.’ Moreover, they may execute their plan anyway and regardless of her objection, taking the money for them and leaving Natasha with a bad reputation and with no money. If she decides to write the debt off as a bad loan she may hamper her reputation as a tough businesswoman and more potential (mostly men) bad debtor may take advantage of her weakness and stop paying her on time or stop paying her at all.
What is Natasha to do?
This real case demonstrates the complexity of the application of western management style and ethics to other societies such as Russia where the value systems is different from that applied in the USA. It also delineates the possible conflict between personal ethics and business survival, and the difficulties faced by US companies embarking on business in Russia. Most US cases present ethical dilemmas between two or more alternative actions within a western value system. This case presents the western decision maker with a dilemma in a foreign culture where the local value system chal- lenges the western manager’s value system. The case is a good indicator of what should foreign investors expect in Russia. It sheds a dark light over the future of Russian business and the Russian economy in general.
INSIGHTS
Volume 3 No. 4 2003 # 11

 

10 # Volume 3 No. 4 2003
INSIGHTS

Description

In this case, Natasha faces a major ethical dilemma.    Like in other ethical dilemmas, she is presented with different alternatives all which comes with negative consequences. The rule of thumb in   resolving ethical dilemmas is to use the option that is morally right but also that comes with less ethical implications for the business.  She has to make a decision that will ensure the survival of her business and at the same time that aligns with the business ethics in the context of Russia.