Doing Business with Totalitarian Governments

A totalitarian government does not permit individual freedom. This type of government monopolizes the absolute power over the people that it governs. Both ethical and unethical arguments can be made in regards to doing business in countries with totalitarian governments. Whether you are the company doing business, the customers, the employees or have another connection can affect the positions you take on what is and is not ethical. Overall, I believe that the company must know its values and look out for the best interest of its stakeholders.

All aspects of public life are regulated by the political entity. They have complete control over law and order as well as economy. Restrictions are imposed on individual freedom of speech and assembly (Borade, n.d.).  This autocratic form of government involves itself in every aspect of its people’s society and attempts to control their attitudes, values and beliefs. They enforce that the citizen’s duties to the state are their top priority. Totalitarian governments are usually lead by a dictator and exhibit “the existence of an ideology that addresses all aspects of life and outlines means to attain the final goal, and a single mass party through which the people are mobilized to muster energy and support” (The Columbia Electronic Encyclopedia, 2007). These dictators rarely tolerate views that oppose their own. The different forms of totalitarianism are theocratic (religious) and secular (military and bureaucratic). There are three different forms of secular totalitarianism, communist, tribal, and right-winged.

            The political risks involved in doing international business are extensive. Examples include things such as violence, terrorism, property seizure, policy change, and local content requirements. It is a corporations social responsibility to balance legal obligations with their commitments to its investors. When you decide to conduct business in a country with a totalitarian government, the business is almost saying totalitarianism is okay because they are buying into it and perpetuating the reign on the dictator.

            However unethical it may be to conduct business in a totalitarian country, a company has a right to look after the best interest of its shareholders. If doing business in a totalitarian country was extremely profitable, it may be in the best interest of the shareholder to go ahead with the business. It would be unethical to expose workers to unsafe working conditions, whether there are laws against it in that country or not. The company would have to make sure that what they are doing is not going to reflect negatively upon them publics. This could cause the company to lose business and generate losses in the bigger picture. Doing business in a country with a totalitarian government could lead to the people of the country gaining exposure to different cultural ideas, or a better way of life. “Doing business in countries with totalitarian governments benefits the people of these countries by exposure to the world” (Johnny, 2007).

            In a totalitarian government, the power is taken from the people and placed in the hands of a dictator. Citizens are left with few freedoms and little say over their personal well being. Doing business is a country like this can pose many ethics issues. I believe that a good company looks out for the best interest of its shareholders while upholding their moral values.

Borade, Gaynor. (n.d.). What is Totalitarianism. Retrieved from http://www.buzzle.com/articles/what-is-totalitarianism.html.

The Columbia Electronic Encyclopedia. (2007). Totalitarianism. Retrieved from http://encyclopedia2.thefreedictionary.com/Totalitarian+dictatorship.

Johnny. (March 24, 2007). Debating the ethics of doing business in countries with totalitarian governments. Retrieved from http://www.jiskha.com/display.cgi?id=1174729290.