Business Ethics in Totalitarian Countries Analytical Essay

June 12, 2022 by Essay Writer


In a totalitarian government, the state exercises its power by developing a political structure that it can use to exert its power in such a way that it controls all aspects of the public and private life of its citizens (Armstrong, 2002). This type of government attempts to control the thoughts and actions of its citizens as well as the social-economic aspects of the state.

In addition, this kind of a government is mainly maintained through control of the mass and social media, the outrageous use of fear upon the citizens, monopolizing the economy, and closely monitoring its citizens. Business in such regimes can have its pros and cons as shall be discussed below.

Business ethics is a structure of certified ethics in the company that investigates and maintains all moral or ethical problems that may come up in the work atmosphere (Koehn, 2002). It is usually used by the company to ensure that all the areas in the company are regulated and monitored. The government on the other hand uses the laws and regulations of the state to ensure that it points businesses in directions that will benefit both the state and the business.

These ethics are used to monitor areas that the government is not able to monitor within the company. This therefore means that the state where the company conducts its business must approve of the company’s actions. Without approval, the company simply cannot conduct any form of business.

A company can only be able to sustain itself if it makes a reasonable amount of profit. Similarly, it is only ethical for a company to do business in a country if its profits are greater than its expenses.

However, a company must also assess the profitability of working in a region where there are moral reservations against the government with which they’re supposed to co-operate with in order to conduct business (Boldrin&Levin, 2008). Totalitarian governments are known to be bureaucratic and corrupt due to the power structure that exists.

Additionally, identifying what else a company values other than profits or revenue is also equally important. If a company values and adheres to its moral codes, it may be difficult to uphold these moral standards as some of the moral convictions might be lost along the way. This is due to the allowances that one must make in trying to avoid the power structure of a totalitarian government.

However, there is an upside to doing business in totalitarian states. This is because in totalitarian states, competition between exporters and importers is restricted. Payment for imported goods is usually dependent on governmental decisions (Pinnington, Macklin &Campbell, 2007).

The type of totalitarianism a country or region experiences largely influences a countries business growth rate and thus this determines whether foreign or local investment is profitable. For instance in countries such as China where right wing totalitarianism is experienced, the country is able to record a hefty growth rate and pursue pro-business policies by privatizing state owned properties. This has in turn attracted foreign direct investment (Singer, 2000).


Investing in a totalitarian state can be an extremely tricky and risky predisposition. This is due to the existing power structure that on must be willing to adhere to. Being able to turn the disadvantage that comes with such a regime takes time and patience. One of the ways that one can gain some form of advantage is by gaining favor with the existing regime and forming good relations with the respective leaders.


Armstrong, M. B. (2002). Ethical Issues in Accounting: The Blackwell guide to business ethics. Oxford: Blackwell

Boldrin, M.; Levine, D. K. (2008).Against Intellectual Monopoly.Cambridge University Press.

Koehn, D. (2002). Ethical Issues in Human Resources: The Blackwell guide to business ethics. Oxford: Blackwell

Pinnington, A. H.; Macklin, R.; Campbell, T. (2007). Human Resource Management: Ethics and Employment. Oxford: Oxford University Press

Singer, J. W. (2000). Entitlement: The Paradoxes of Property: New Haven: Yale University Press.

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