2Ethics in International Business Chapter 4Ethics in International BusinessThis is a test
3Ethics in International Business ObjectivesSource of ethical challenges in IBEffect of ethical challenges on decisions in IBCauses of poor ethical decisions in IBDifferent conceptual underpinnings for ethical decisions in IBWhat managers can do toPromote an awareness of ethical issues throughout the organizationEnsure that ethical considerations enter into decision making
4Ethical Issues in International Business Arise when a manager makes decisions consistent with differing national environmentsPolitical systemsLegal systemsEconomic development levelsCultureWhat is ethical and “normal” in one environment may not be so in another
5Ethical Issues in International Business Arise most often in the context of:Employment practicesHuman rightsEnvironmental policyCorruptionAn MNC’s perceived moral obligations to society
6Employment Practices What standards should be applied? Home nation’sHost nation’sOtherShould the MNC adapt its policies? Standardize?Hiring practices, labor relations, diversity issues, employment conditions are some specific issues that require careful thought
7Human RightsA manager can assume as universal her/his views on freedom of:AssociationSpeechAssemblyMovementPolitical repressionWhat is the responsibility of an MNC to uphold different standards of human rights?
8Repressive RegimesIs it ethical for MNCs to operate in countries with repressive regimes?Is inward investment an agent for change?What is the limit beyond which inward investment would not be justified under all circumstances?What if competitors from other nations invest and you don’t?
9Environmental Policies Locally mandated environmental standards may be inferior to those an MNC knows it can achieveTragedy of the commons: a resource held in common by all, but owned by no one, is overused by some, resulting in degradation.If a decision is legal but unethical, should it be taken?
10Corruption Is an MNC’s manager who agrees a corrupt manager? Government officials may ask for bribes for an MNC to “get things done”Is an MNC’s manager who agrees a corrupt manager?Should an MNC ever accede to bribery demands?Foreign corrupt practices act (USA)Convention on Combating Bribery of Foreign Officials in International Business Transactions (OECD)
11MNC Power and Moral Decisions MNCs have power over a host countryThey can move production awayAlong with power arise obligations (?)Power is morally neutralHow it is used is what mattersPerceptions of how it should be used and of its impact varyCompany viewHost country view
12MNC and Social Responsibility Social responsibility: business decisions should be made after consideration of social consequences of economic actionsNoblesse oblige: honorable and benevolent behavior is the responsibility of those in powerBenevolent behavior responsibility of only successful business?
13Determinants of Ethical Behavior Organization culturePersonal ethicsDecision making processesLeadershipUnrealistic / realistic performance goals
14Philosophical Approaches to Ethics Straw men: often adopted, offer inappropriate guidelines for MNC behaviorFriedman doctrineRighteous moralistNaïve immoralistUtilitarian and Kantian EthicsRights theoriesJustice theories
15Ethical Decision Making Hiring and promotionOrganization culture and leadershipDecision-making processesStakeholder perspectivesEthics officersCodes of ethicsMoral courage: walk away from profitable and unethical decision