Hostname: page-component-cd9895bd7-gbm5v Total loading time: 0 Render date: 2024-12-27T03:42:20.719Z Has data issue: false hasContentIssue false
  • English
  • Français

Globalization, Ethics, and Opportunism: A Confucian View of Business Relationships

Published online by Cambridge University Press:  23 January 2015

Edward J. Romar
Get access Rights & Permissions [Opens in a new window]

Abstract:

Opportunism impacts the behavior of firms in market situations where they purchase goods and services externally and create dependency relationships with other firms. Opportunism as a business issue is addressed in economics and marketing literature as an important factor in transaction cost analysis and market governance. Management and business ethics scholars, however, do not address this issue in depth, if at all.

The recent bankruptcy of MCI WorldCom highlights some of the risks inherent in a world economy where customers and companies of one society are dependent upon the business practices of partner companies in other societies. Telecommunications customers and companies in Asia, Europe and other places, who depended upon MCI WorldCom for connections to North America, now have important areas of their business in jeopardy because of the uncertainty about the fate of a critical business partner.

MCI WorldCom’s situation appears to be the result of an attempt to obtain personal gain, at the expense of others, by at least one senior manager. This is called opportunism. Williamson (1985) defined opportunism as “self-interest seeking with guile.” It can wreak havoc with companies, customers, stock markets and economies and is demonstrated regularly in press accounts of misstatements on financial reports and other ways senior managers use their positions to enhance their personal wealth and influence.

This paper will focus on the ethical issues surrounding business relationships and how Confucianism, with its focus on trust, reciprocity and mutual benefit in relationships, can offer a moral foundation to the inter-firm arrangements that are so much a part of the contemporary business landscape.

Type
Articles
Information
Business Ethics Quarterly , Volume 14 , Issue 4 , October 2004 , pp. 663 - 678
Copyright
Copyright © Society for Business Ethics 2004

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Brown, James R., Dev, Chekitan S., and Le, Dong-Jin. 2000. “Managing Marketing Channel Opportunism: The Efficacy of Alternative Governance Mechanisms.” Journal of Marketing (April): 51–65. ABI/InformGlobal, 9/4/01.CrossRefGoogle Scholar
Chiles, Todd H., and McMackin, John F.. 1996. “Integrating Variable Risk Preference, Trust, and Transaction Cost Economics.” The Academy of Management Review (January): 73. ABI/Inform Global, 9/18/01.Google Scholar
Coase, R. H. 1990. The Firm, The Market and The Law (Chicago: University of Chicago Press). (Orig. pub. 1937.)Google Scholar
Coase, R. H.. 1998. “The New Institutional Economics.” The American Economic Review (May): 72–75. ABI/InformGlobal 1000042665, 9/9/01.Google Scholar
DiPiazza, Samuel A. Jr., and Eccles, Robert G.. 2002. Building Public Trust: The Future of Corporate Reporting (New York: John Wiley & Sons).Google Scholar
Fingarette, Herbert. 1998. Confucius: The Secular as Sacred (Prospect Hills, Ill.: Waveland Press).Google Scholar
Ganesan, Shankar. 1994. “Determinants of Long-Term Orientation in Buyer-Seller Relationships. Journal of Marketing (April): 1–19.CrossRefGoogle Scholar
Graham, A. C. 1989. Disputers of the TAO: Philosophical Argument in Ancient China (Chicago: Open Court).Google Scholar
Hamel, Gary. 2000. Leading the Revolution (Boston: Harvard Business School Press).Google Scholar
Hamel, Gary, and Prahalad, C. K.. 1996. Competing for the Future (Boston: Harvard Business School Press).Google Scholar
Hammer, Michael. 1996. Beyond Reengineering: How the Process Centered Organization is Changing Our Work and Our Lives (New York: HarperBusiness).Google Scholar
Hammer, Michael, and James, Champy. 1994. Reengineering the Corporation: A Manifesto for Business Revolution (New York: HarperBusiness).Google Scholar
Heide, Jan B. 1994. “Interorganizational Governance in Marketing Channels.” Journal of Marketing (January): 71–85.Google Scholar
Joshi, Ashwin W., and Rodney L. Stump. 1999. “Determinants of Commitments and Opportunism: Integrating and Extending Insights From Transaction Cost Analysis and Relational Exchange Theory.” Revue Canadienne des Sciences de l’ Administration (December): 334–52. ABI/InformGlobal, 9/4/01.Google Scholar
Lau, D. C. 1970. Mencius (New York: Penguin Books).Google Scholar
Lau, D. C.. 1979. The Analects (New York: Penguin Books).Google Scholar
Legge, James. 1971. Confucius: Confucian Analects, The Great Learning and The Doctrine of the Mean (New York: Dover Publications).Google Scholar
Levitt, Arthur. 2002. Take on the Street: What Wall Street and Corporate America Don’t Want You to Know, What You can Do to Fight Back (New York: Pantheon Books).Google Scholar
Noorderhaven, Niels G. 1996. “How to Make Transaction Cost Economics More Balanced and Realistic.” The Academy of Management Review (October): 924. ABI/Inform-Global, 9/6/01.Google Scholar
Nooteboom, Bart. 1996. “Trust, Opportunism and Governance: A Process Control Model.” Organizational Studies: 985–1010. ABI/Inform/Global 999692575, 9/5/01.Google Scholar
Osland, Joyce S., Kolb, David A., and Rubin, Irwin M.. 2001. The Organizational Behavior Reader, seventh edition (Upper Saddle River, N.J.: Prentice-Hall).Google Scholar
Porter, Michael E. 1980. Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: The Free Press).Google Scholar
Porter, Michael E.. 1985. Competitive Advantage: Creating and Sustaining Superior Performance (New York: The Free Press).Google Scholar
Raisch, Warren D. 2001. The eMarketplace: Strategies for Success in B2B eCommerce (New York: McGraw-Hill).Google Scholar
Schiesel, Seth. 2002. “Trying to Catch WorldCom’s Mirage.” The New York Times (June 30): section 2, p. 14.Google Scholar
Schwartz, Benjamin I. 1985. The World of Thought in Ancient China (Cambridge, Mass.: The Belknap Press).Google Scholar
Shun, Kwong-loi. 1993. “Jen and Li in the Analects.” Philosophy East and West (July): 457–80.Google Scholar
Shun, Kwong-loi. 1997. Mencius and Early Chinese Thought (Stanford, Calif.: Stanford University Press).Google Scholar
Steensma, H. Kevin, and Corley, Kevin G.. 2001. “Organizational Context as a Moderator of Theories on Firm Boundaries for Technology Sourcing.” Academy of Management Journal (April): 271–79. ABI/InformGlobal, 9/4/01.CrossRefGoogle Scholar
Stump, Rodney L., and Heide, Jan B.. 1996. “Controlling Supplier Opportunism in Industrial Relationships.” Journal of Marketing Research (November): 431. ABI/InformGlobal, 999693052, 9/5/01.Google Scholar
Williamson, Oliver E. 1975. Markets and Hierarchies, Analysis and Antitrust (New York: The Free Press).Google Scholar
Williamson, Oliver E.. 1985. The Economic Institutions of Capitalism (New York: The Free Press).Google Scholar
Williamson, Oliver E.. 1986. Economic Organization: Firms, Markets and Policy Control (New York: New York University Press).Google Scholar
Tapscott, Don, David Ticoll, and Alex Lowy. 2000. Digital Capital: Harnessing the Power of Business Webs (Boston: Harvard Business School Press).Google Scholar
Wathne, Kenneth H., and Heide, Jan B.. 2000. “Opportunism in Inter-firm Relationships: Forms, Outcomes and Solutions.” Journal of Marketing (October): 36–51.CrossRefGoogle Scholar
WorldCom Website, www.worldcom.com/global/about/network/. Dec. 2002.Google Scholar
Yergin, Daniel A., and Joseph, Stanislaw. 1998. The Commanding Heights: The Battle between Government and the Marketplace that is Remaking the Modern World (New York: Simon & Schuster).Google Scholar