1. Business Ethics in a Global Economy
Chapter 9
Business Ethics in a Global Economy

2. Ethical Perspectives in International Business
when businesspeople travel abroad, they sometimes perceive different modes of operation
research shows that American companies feel they are different from many foreign companies
“we” versus “them” is referred to as self-reference criterion—unconscious reference to one’s own cultural values, experiences, & knowledge

3. Culture as a Factor in International Business
culture is everything in our surroundings made by people—both tangible and intangible concepts & values
each nation has a distinctive culture & beliefs about acceptable or unethical activities
citizens of different cultures vary based on their religious beliefs as well as perceptions of time
the key question: whose values & ethical standards take precedence?

4. Cultural Relativism...
the concept that morality varies from one culture to the next, since business practices are defined as right or wrong by the particular culture
ethical relativism—one culture defines ethical behavior for the whole globe, no exceptions
business relativist—there may be no ethical standards except for the one in the transaction culture

5. Multinational Corporations...
operate on a global scale without significant ties to any one nation or region
perceived to be unfair for MNCs to transfer jobs abroad where wage rates are lower
have been accused of increasing the gap between the rich & poor nations
have been accused of exploiting natural & human resources
have been accused of engaging in unfair competition

6. Global Ethical Issues sexual & racial discrimination human rights
price discrimination
bribery
harmful products
pollution
telecommunications

7. Sexual & Racial Discrimination
U.S. laws prohibit U.S. businesses from discriminating on the basis of race, color, sex, religion & disability
discrimination is often justified on the basis of cultural norms & values
discrimination remains one of the more prevalent concerns in international business

8. Human Rights
opportunistic use of child labor, payment of low wages, & abuses in foreign factories are a few of the concerns
relationships with subcontractors have proved problematic for some firms
MNCs should view the law as a floor of acceptable behavior & strive for greater improvements in workers’ quality of life

9. Advancing Human Rights...
engage in an open dialog with workers & management
be aware of human rights issues & concerns in each country in which the company engages in business
adopt the prevailing legal standard, but seek to embrace a ‘best practices’ approach and standard

10. Price Discrimination
occurs when a firm charges different prices to different groups of consumers
allowable if justified, based on costs
price gouging—a price increase exceeding the costs of additional expenses (taxes, etc.)
dumping—charging high prices for products sold in the home market and low prices that do not cover costs in foreign markets (considered illegal under many international laws)

11. Bribery & the Foreign Corrupt Practices Act...
bribes & facilitating payments are acceptable in many cultures
the U.S. Foreign Corrupt Practices Act prohibits American corporations from offering or providing payments to officials of foreign governments for the purpose of obtaining or retaining business abroad
may place U.S. businesses at a disadvantage
has been supported through global treaties

12. Harmful Products
products banned in many industrial nations, considered harmful, are sold in other countries where they are still legal
dumping of hazardous waste materials in less developed countries is a related issue
some products that are not harmful in some countries may be so in others because of issues related to literacy, unsanitary conditions, & cultural values

13. Pollution
many countries are working together to create alliances & standards for environmental responsibility to minimize the negative effects of pollution
some countries are taking legal action against polluting firms in an effort to defend air & water quality
reasonable global emission standards must be established

14. Telecommunications
satellites, & the Internet bring ease of information access with resulting ethical issues
a few of the ethical issues include:
counterfeiting
knockoffs
money laundering