For many companies, increased competition, stricter government controls and emerging global markets have raised ethical questions that they were unprepared to deal with.

"Ethical questions face business people every day, especially when a company is involved with worldwide markets," said Carl Skooglund, former vice president and director of ethics, Texas Instruments. "Finding the right answer isn't often easy -- one has to balance local customs and laws with U.S. laws."

As an international company with more than 35,800 employees operating in more than 25 countries, TI is global in scope and culture with a time-honored tradition of conducting business in an ethical and legal manner. But, that is an increasingly difficult challenge fueled by the changing times, relationships and situations facing companies today.

TI's global vision is World Leadership in Digital Solutions for the Networked Society. The company is competing to win at a global level -- entering into strategic partnerships, alliances and joint ventures in every corner of the globe. The success of these relationships depends greatly upon the company's representatives understanding the ethical standards and expectations of others. Consider these examples of cultural differences from the Ethics Office files:

• In the U.S., telephone helplines or "hotlines," as some companies refer to them, are considered a normal part of business. In some parts of the world, however, hotlines may be greatly mistrusted or even viewed as personally offensive and dangerous.
• U.S. companies and U.S. citizens are subject to certain U.S. laws wherever they are. Other countries also have a global reach.
• Workers in some parts of the world consider the concept of ethics to be very personal, and they may not fully understand that it is also a global or company-wide issue to be discussed or even questioned. In many places, the contract negotiation process can be very long and drawn out -- and somewhat informal. That's very frustrating for most U.S. companies unless they have a good understanding of what's going on. There may be very good intentions on all parts, but unless everyone clearly understands the process, it may seem that something unethical is happening.

"These types of situations are trying in the best of times. But today, many organizations and people are under enormous pressure to succeed in a very competitive and challenging global economy. Companies are reducing or eliminating layers of management that made decisions that they are now expecting those on the firing line to make. We are in a world where the ability to communicate rapidly has exploded. It has created enormous opportunities as well as risks. Legal complexities have increased to the point that people simply don't know. In fact, they can't know," said Skooglund.

"Our relationships with other companies are changing through alliances, partnerships and joint ventures to the point that at different times we may be dealing with other companies as customers, suppliers or competitors. Yet, we still expect employees to recognize and respect those differences and the legal risks they present."

The challenge in this dynamic environment, with its close calls and uncertainties, according to Skooglund, "is to provide tools to our employees so that they can make the tough, quick decisions on the fly, on the firing line. And, make them correctly. There are two elements to making decisions and taking action on behalf of an organization: 1) a clear understanding of the organization's values, principles and ethical expectations and 2) sound personal judgment and appropriate choices."

To meet these challenges, TI has adopted a three-level approach to ethical integrity on a global level. The first level simply asks: Are we complying with all legal requirements on a local level?

The next level asks: Are there business practices or requirements at the local level which impact how we interact with co-workers in other parts of the world? A growing number of local regulations -- rigid environmental regulations in some parts of Europe, for example -- have a significant effect on products that we ship to and from those countries.

The third level is: Do some of our practices need to be adapted based on the local laws and customers of a specific locale? What we think is perfectly proper in one country may not migrate well to another. On what basis do we define our universal standards that apply to TI employees everywhere?

"For example," Skooglund explained, "TI generally follows conservative rules covering the giving and receiving of gifts. However, what we consider to be an excessive gift in the U.S. may differ from what local customs dictate in other parts of the world. We used to define gift limits in terms of U.S. dollars, but this is impractical when dealing internationally. Instead, we emphasize following the directive that gift-giving should not be used in a way that exerts undue pressure to win business or implies a quid-pro-quo.

"In today's environment, there is no way that a rule book or a library of policies are going to guide those actions. They must be guided by a shared understanding of basic values and principles of integrity. And they must be supported by resources that will help people to recognize when the caution lights should come on and to know where they can seek expert advice quickly. TI's reputation is completely in our hands, to be enhanced or damaged by the nature of our actions," he concluded.