Ethics in International Business

“Ethics” are principles of conduct governing an individual or group

Ethics are difficult… What principles you should follow and what they mean in a particular case is often unclear Ethics is even more difficult for business people than for others Accountants and medical doctors have organizations that try to establish agreement in the profession as a whole on codes of conduct And still there are major disagreements

No one tries to establish agreement among general managers, marketers The situations a general manager faces are so diverse, no central organization could create ageement Efforts like Alan Boeckmann’s in the construction industry are cover just a few parts of business But they do show some success

Is ethical behavior the best policy… … the one that produces the most long-run profits? There is considerable evidence that it is Ethical behavior creates goodwill and reputation People avoid doing business with people they consider unethical They know doing business with the unethical is a risk Much of the human brain is devoted to caring; people often find it uncomfortable to work with others whose actions offend them

And people with bad ethics really do face the risk of getting caught In the U.S., prosecutors zealously pursue businesspeople

Moral development Everyone does have a sense of morality unless you’re psychologically deranged We think about morality in class because thinking can develop more credible moral ideas And if they’re more credible, people may follow them

Stages in moral development Psychologists find there is a predictable process through which morals develop “Preconventional stages” Children learn to respond to rules to avoid punishment to get what they want for themselves and those they care about Conventional stages – meeting the expectations of family, peer group, or nation is valuable in its own right

“Postconventional” or “principled” stages - people try to see situations from a point of view that takes everyone’s interests into account. A more mature personal morality The psychologist Lawrence Kohlberg reported moral development as a matter of developing more mature principles Carol Gilligan found people can also develop morally toward more adequate ways of relating to others Gilligan saw this as a female way But others noted men and women can use either a principled or a relationship-oriented approach

How we all lose if we’re not ethical The prisoner’s dilemma game …

We all lose in a world where we’re not ethical How can we gain the benefits or working together through ethics?