Anna Pataki

Fr. Dan

BUS 360

31 October 2021

Team Project 3: Ethical Considerations

Our team, Anna’s world, is introducing the fashion and lifestyle brand Calvin Klein to

Hungary. Hungary’s culture is different than the culture of United States, where the brand was

originally founded, thus it is inevitable to discover the potential ethical issues in the host

country before entering the market.

One of the major ethical issues in Hungary is corruption, especially bribes. Investopedia

explains that corruption is dishonest behavior by those in position of power, such as managers

or government officials. It can also include bribes or grease payments, accepting inappropriate

gifts, manipulating elections, or defrauding investors. In 2020, Hungary ranked 69th out of the

198 countries on corruption perception index, according to Transparency International. The

vast majority of the citizens would agree that they are personally affected by corruption in

their personal life. Furthermore, political influence is growing on the media, independent

institutions are weakened, and corruption scandals regarding EU funds had become

Hungary’s “new normal”. In addition, during the pandemic two-thirds of Fidesz, the

governing party, centralized its power and weakened control of public spending.

It is important to investigate this ethical issue from a utilitarian perspective. This ethical

theory is a consequentialist theory that focuses on outcomes. The theory is rooted in

individualisms, freedom, and rationality and it is based on egoistic hedonism. People pursue

selfish goals and need the freedom to do so. Utilitarianism maintains a principle which is

called the utility principle. This is the desire to maximize pleasure and minimize pain. Actions

are right when it generates the most happiness for the greatest number of people and
minimizes the pain. They measure pain and pleasure on a single scale. So, a utilitarian would

say that corruption is acceptable when it maximizes the good for the vast majority of people.

However, it is not the case in Hungary. Corruption advances a few people who have the

power, but it generates pain for the rest of the citizens. For example, requiring bribes or

embezzlements can create happiness to managers and CEOs, however if we consider the

whole population of the country, these payments affect the people negatively by creating job

inequalities, access to education, access to workforce or poverty. Overall, corruption

generates loss of economic growth, loss of investments, inequality, and income distribution.

Thus, from a utilitarian point of view corruption should be stopped because it makes most of

the population hurt within a country, it doesn’t maximize pleasure for most of us.

Lastly, from a utilitarian perspective I would urge the company to refuse accepting or

giving bribes. I recommend implementing an anti-bribery and anti-corruption policy for

Calvin Klein that makes obvious for everyone what the company’s rules and expectations are

around bribery. In addition, it would be beneficial for the company to provide a training on

corruption and different types of payments or inappropriate gifts for the employees. Calvin

Klein would be able to avoid unethical operation in Hungary.

 Works Cited

https://www.investopedia.com/terms/c/corruption.asp

https://www.transparency.org/en/cpi/2020/index/hun