BUSINESS ETHICS

ASSIGNMENT: ETHICAL ISSUES WHILE GOING GLOBAL SUBMITTED TO: MISS GUL-E-ZEHRA SUBMITTED BY: REEMA PERVEZ DATE OF SUBMISSION: 5-04-13

Organization: Sukh Chan wellness club (Gulberg,Lahore) Introduction: Sukh and Chan are Punjabi words which mean peace and comfort respectively. The concept of wellness arises from peace and comfort collectively. In 2005, a group diversified into the health development industry when it inaugurated the countrys first and finest health club, The Sukh Chan Wellness Club, which has made over 1100 members in less than one and a half year. In just over a year, the club has won numerous awards and shields for its efforts and services to improve peoples understanding and response towards health and lifestyle. The club is run by Mrs. Nina Akbar who is the CEO of the company. It was her vision which led to the development of this business. She herself was with the view of having healthy lifestyle awareness in the society. The club, Sukh chan is one of the most luxurious health clubs in Lahore which offer all the health facilities Swimming pool, gym, massage, Squash court, billiards, cinema, spa, Restaurant and many more. Sukh Chan mainly targets the elite class society of Pakistan who is vulnerable to pay a subscription fee of Around 210,000 to 500,000 PKR. It also includes the monthly fee which ranges from 5000 to about 14000 PKR monthly which varies according to the extent of membership of the individual. This club has established it image over the last six years and has become one of the leading wellness club in the industry of Lahore. This is because of their human resource and the strategic management with the foresightedness of the future perspectives of the society and the awareness level. Ethical issues: Such chan is currently working in Lahore only and it is one of the best social clubs in Pakistan. UAE have rich economy and the people there have high social life which makes UAE a

good place to start or move the club. Following are the ethical issues it might face while operating in United Arab Emirates. 1. Cultural issues Though UAE is also a Muslim country and the core cultural values of both countries are same but the sub culture of the countries is very diversifies. In UAE women are not allowed to work whereas in Pakistan women are employed more in order to enhance the look of the place. Such chan might face difficulty in coping up with cultural gap as the mindset of the club and customers will be different. 2. Labor markets In Pakistan labor market is not as diversified as in UAE. People from all around the world consider UAE to be the hub of jobs for less educated as it is a developed economy. UAE follows Islamic law and are strict in practicing the rules and regulations. In Pakistan the labor is exploited and justice is denied to them. Any contingency between the club manager and labor will not only bring financial loss to the club but will also create a bad word of mouth for it. 3. Rules and regulations Same as the laws of both the countries are different from each other, the regulations practiced are also very dissimilar. In spite of diverse work force and assorted human capital, UAE business market is centralized. In UAE only to Arabs have their say in business whereas in Pakistan decentralization is starting to get force in order to be innovative. The managers of Such chan might find it hard to take orders from someone who are alien to their club and are given power just because of being host citizens. 4. Accounting practices In Pakistan western banking system prevails whereas Arabs strictly follow Islamic banking practices. The difference in banking sector lead to vast arguments in accounting practices. Pakistan is more shareholder friendly as compared to Arab. UAE is moving closer to IAS (International Accounting standards) every year but still they have a long way to go. The difference in approaches towards provision of doubtful debts, amortization, depreciation, tax

policy etc can understate or overstate the profits. Without the true picture of profits forecasting of business cannot be done which is important for expanding business. 5. Harassment at work In Pakistan harassment is not taken very seriously because of leniency towards labor law. However in UAE harassment is taken very seriously. Those habitual of working in Pakistani environment might be unaware of the gestures or words that are considered harassment in UAE thus making the working environment awkward. 6. Language barriers Arabs are very loyal to their mother tounge and dont feel good when someone debates with them in any other language. In Pakistan English is used as a medium of communication. Such chan has hired waiters and other staff who are proficient in English. While operating in UAE language barrier will be one of the biggest hurdle in development. Arabi is a difficult language and long time is required for learning it. To avoid language barrier, if such chan hires arabi waiters, it will be a challenge for managers to manage them. 7. Currency fluctuations Pakistan is a weak economy and UAE is developed & rich economy. The fluctuations in currency will affect the business severely. Increase in purchasing power of dirham and dinars will require more investment to keep the business going. 8. Eating habits Before the 1960s, food of Arabs consisted mainly of fish, rice, bread, dates, yogurt, homegrown vegetables, and meat from sheep, goats, and camels. The diet has improved in quality and variety, with modern supermarkets offering imported foods. Lunch is the main family meal and is eaten at home at around two o'clock. It usually consists of fish, rice, meat, and a vegetable dish. In contrast, such chan is offering western dishes besides their cultural food. Eating at hotels and socializing with friends is now becoming common norm in Pakistan now-adays but Arabs are family oriented and prefer spending time with family. This discrepancy might affect the profits of such chan.

9. Legal issues Pakistani law allows everyone to enter into a legal profession or lawful business of his or her own choice without any discrimination. In UAE a national of any other country can not start his or her own business without kafeel ( an Arab having share in business). This not only restricts other nationals from investing in Arab but also make investors prone to exploitation by kafeels. Such Chan will put a great amount of trust in sharing their business with another person. The ownership of the business remains with the arab as per law of UAE. Due care and in depth research of pros n cons of expanding business in UAE will have to be done by managers of Sukh Chan.