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© Prentice Hall, 2001 Chapter Eight Ethical Issues in International Business Ethical Theory and Business, 6 th Edition Tom L. Beauchamp & Norman E. Bowie
© Prentice Hall, 2001 2 Objectives ٠After studying this chapter the student should be able to: –Describe problems encountered by multinational corporations when conducting business with other countries. –Contrast the transcendental normative environment and the group normative environment. –Analyze the ethical issues of the Japanese business community.
© Prentice Hall, 2001 3 Objectives –Discuss the concept of reciprocity as it applies to the Chinese culture. –Explain the guidelines for conducting business with Chinese businesspeople. –Contrast gift giving, bribery, and corruption. –Define the term sweatshop. –Discuss the development of the campus anti- sweatshop movement. –Discuss possible standards for appropriate wages and labor standards in international sweatshops.
© Prentice Hall, 2001 4 Objectives –Discuss the potential economic problems that may occur if current sweatshop practices are changed.
© Prentice Hall, 2001 5 Overview ٠ Multinational Corporations ٠ Bribery ٠ Sweatshops
© Prentice Hall, 2001 6
7 Norman Bowie ٠Relativism and the Moral Obligations of Multinational Corporations ٠ General multinational corporation obligations ٠ Distinctive obligations ٠ Relativism ٠ Morality of the marketplace
© Prentice Hall, 2001 8 Daryl Koehn ٠What Can Eastern Philosophy Teach Us About Business Ethics? ٠ Cullen Chair of Business Ethics, University of St. Thomas in Houston ٠ Do Asian values exist? ٠ Watsuji Tetsuro and Confucius –Meaning of trust –Relations are for life –Ethics beyond rights
© Prentice Hall, 2001 9 Iwao Taka ٠Business Ethics: A Japanese View ٠ Religious dimension –Transcendental normative environment Numen – Soul, spirit, or spiritual energy. Transcendentalism – The philosophy that every phenomenon is an expression of the great life force and is ultimately connected with the numen of the universe. –Japanese meaning of work –Group normative environment
© Prentice Hall, 2001 10 Iwao Taka ٠ Living between the group and individual environments ٠ Social dimension –Concentric circles of corporations Family, fellows, Japan, and world –Dynamics of the concentric circles The individuals The contextuals –Group environment and concentric circles
© Prentice Hall, 2001 11 Iwao Taka ٠ Japanese recognition of the American business community –Job description and the transcendental logic –Employees interest and the group logic –Claims against the Japanese market and the concentric circles ethics
© Prentice Hall, 2001 12 Iwao Taka ٠ Ethical Issues of the Japanese business community –Discrimination and transcendental logic Transcendental logic has favored the male society. Transcendental logic has been used to accuse certain workers of laziness. –Employees dependency and the group logic –Exclusiveness of the concentric circles
© Prentice Hall, 2001 13 Patricia H. Werhane ٠Exporting Mental Models: Global Capitalism in the Twenty-First Century ٠Ruffin Professor of Business Ethics, University of Virginia ٠ Mental models - The mechanisms whereby humans are able to generate descriptions of system purpose and form; explanations of system functioning and observed system states; and predictions of future system states.
© Prentice Hall, 2001 14 Patricia H. Werhane ٠ This article examines the possibilities of using an American free enterprise capitalist model for conducting business in a global arena.
© Prentice Hall, 2001 15
© Prentice Hall, 2001 16 P. Steidlmeier ٠Gift Giving, Bribery, and Corruption: Ethical Management of Business Relationships in China ٠ Associate Professor School of Management, Binghamton University ٠ Developing a cultural framework for reciprocity –Artifacts –Social knowledge –Cultural logic
© Prentice Hall, 2001 17 P. Steidlmeier ٠ Interacting with others in China ٠ Moral analysis of reciprocity ٠ Guidelines for doing business right in China –Investigate the backgrounds of local executives you place in charge of company matters. –Ensure no one individual has total control over company matters. –Treat remarks such as China is different and You shouldnt get involved as red flags.
© Prentice Hall, 2001 18 P. Steidlmeier –Establish regular and detailed auditing systems to ensure transparency. –Be aware of the political standing of your counterparts and do not get caught in the cross fire of Chinese power struggles. –Explain your difficulties to the Chinese side and offer alternatives that are legitimate. –As much as possible, use Chinese sources themselves as the basis for your unwillingness to do corrupt deals.
© Prentice Hall, 2001 19 P. Steidlmeier –Rather than becoming entangled in a specific minor bribe, place the whole matter in a broader context of negotiation.
© Prentice Hall, 2001 20 Thomas Donaldson and Thomas W. Dunfee ٠When Ethics Travel: The Promise and Peril of Global Business Ethics ٠ ISCT Core norms –Hypernorms –Consistent norms –Moral free space –Illegitimate norms ٠ Navigating the ISCT map
© Prentice Hall, 2001 21
© Prentice Hall, 2001 22 Richard Applebaum and Peter Dreier ٠The Campus Anti-Sweatshop Movement ٠ The global sweatshop –Sweatshop – A process where profits are sweated out of workers by forcing them to work longer and faster. ٠ Kathie Lee ٠ Robert Reich
© Prentice Hall, 2001 23 Richard Applebaum and Peter Dreier ٠ A sweat-free campus –Began at Duke University, Fall 1997 –Required manufacturers of items with the Duke label to sign a pledge that they would not use sweatshop labor –Quickly spread to other U.S. universities/colleges –United Students Against Sweatshops (USAS) formed Summer 1998 ٠ The industrys new clothes
© Prentice Hall, 2001 24 Ian Maitland ٠The Great Non-Debate Over International Sweatshops ٠ Carlson School of Management, University of Minnesota ٠ International sweatshop labor standards –Home-country standard –Living wage standard –Classical liberal standard
© Prentice Hall, 2001 25 Ian Maitland ٠ Charges against sweatshops –Unconscionable wages –Immiserization thesis –Widening gap between rich and poor –Collusion with repressive regimes ٠ Labor standards in international sweatshops: painful tradeoffs
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