1. ETHICS IN THE MULTINATIONAL and INTERNATIONAL WORKPLACE
Lecturer:
Dr. Jeffrey M. Parker Sr.
Guest Lecturer:
Dr. Amin Ghafooripour-Assistant Professor

2. Presentation Structure
Ethics in Work Place
Ethics and Law / Behavior in Work Place
International/National Effects of Ethical Behavior
How to make Ethical Decision
in the Work Place
Conclusion

3. ETHICS IN THE WORKPLACE
INTRODUCTION
Work Ethics:
A group of moral principles, standards of behavior, or set of values regarding proper conduct in the workplace

4. Relationships at Work Management/owner toward client/customer
Management/owner toward employees
Employee toward Employer, Co-workers, Customers

5. The Meaning of Ethics Ethics Normative Judgment Morality
The study of standards of conduct and moral judgment; also, the standards of right conduct.
Normative Judgment
A comparative evaluation stating or implying that something is good or bad, right or wrong, or better or worse.
Morality
A society’s accepted norms of behavior.
March 30, 2006
LIS580- Spring 2006
G.Dessler, 2003

6. Moral Philosophies
March 30, 2006
LIS580- Spring 2006
G.Dessler, 2003

7. BUSINESS ETHICS Multinational managers face complex ethical issues
With an understanding of key ethical problems in multinational management, managers can make more informed ethical judgments
Ethics - the rules and values that determine what goals and actions people follow when dealing with other human beings
Business ethics: all business decisions with ethical consequences

8. INTERNATIONAL BUSINESS ETHICS
SOCIAL
RESPONSIBILITY
The unique ethical problems faced by managers conducting business operations across national boundaries
The responsibility businesses have to society beyond making profits
Often reflects the ethical values and decisions of the top management team
Ethics and social responsibility- not easily distinguished in practice

9. Business Abuse Business Abuse Any : illegal unethical
irresponsible Act done against an Employer

10. Results of Business Abuse
Higher prices
Business Failure
Fewer Jobs
Unpleasant Working Conditions

15. Presentation Structure
Ethics in Work Place
Ethics and Law / Behavior in Work Place
International/National Effects of Ethical Behavior
How to make Ethical Decision
in the Work Place
Conclusion

16. What Influences Ethical Behavior At Work?
Ethical Work Behaviors
Individual Factors
Organizational Factors
Top Management
Ethics Policies and Codes
March 30, 2006
LIS580- Spring 2006
G.Dessler, 2003

17. Ethics and the Law Important Points:
Something may be legal but not right (ethical)
Something may be right (ethical) but not legal.
March 30, 2006
LIS580- Spring 2006
G.Dessler, 2003

19. SIX BASIC ETHICAL LANGUAGES
Virtue and vice
Self control
Maximize human welfare
Avoiding harm
Rights/duties
Social contract

20. Presentation Structure
Ethics in Work Place
Ethics and Law / Behavior in Work Place
International/National Effects of Ethical Behavior
How to make Ethical Decision
in the Work Place
Conclusion

21. NATIONAL DIFFERENCES IN TERMS OF International Contracts
National culture and social institutions affect ethical behavior/social responsibility

22. Bases for Legal Systems
The bases for the majority of the legal systems of the world include:
(1) Common law, derived from English law and found in England, the United States, Canada, and other countries once under English influence
(2) Civil or code law, derived from Roman law and found in Germany, Japan, France, and in non-Islamic and non-­Marxist countries
(3) Islamic law, derived from the interpretation of the Koran and found in Pakistan, Iran, Saudi Arabia, and other Islamic states
(4) A commercial legal system in the Marxist-socialist economies of Russia and the republics of the former Soviet Union, Eastern Europe, China, whose legal system is based on the economic, political, and social policies of the state

23. Ethics Vs. Ethics in Different Cultures Marxist-Socialist Tenets
With the collapse of communism, the former eastern bloc countries have developed a commercial legal system to engage in international commerce
Islamic Law
Emphasis placed on the ethical, moral, social, and religious dimensions to enhance equality and fairness for the good of society
Prohibits investment in activities that violate the Shari’ah, e.g., business dealing with alcohol, gambling, and casinos

24. Intellectual Property Rights, Counterfeiting and Piracy
In the United States, a common-law country, ownership of intellectual property rights is established by prior use
In many code-law countries, ownership is established by registration rather than by prior use
For example, a trademark in Jordan belongs to whoever registers it first in Jordan so there are “McDonald’s” restaurants, “Microsoft” software, and “Safeway” groceries all legally belonging to a Jordanian
Is it Ethical?

25. Cyberlaw: Unresolved Issues
Existing internet law is vague or does not completely cover such issues as the protection of domain names, taxes, jurisdiction in cross-border transactions, and contractual issues
The European Union, the U.S. and many other countries are drafting legislation to address the myriad legal questions not clearly addressed by current law
Laws being considered deal with Cybersquatters—those who buy and register descriptive nouns, geographic names, ethnic groups, pharmaceutical substances and other similar descriptors and hold them until they are sold at an inflated price
Another issue in e-commerce concerns the collection of taxes on sale of products, i.e., when taxes should be collected, where they should be collected, and by whom, are all issues under consideration by countries around the world

26. Ethical Issues in Global Business
Marketing and safety practices
-Sweatshop and labour abuse
Corruption and bribery

27. The Moral Philosophy Framework
Cultural Relativism:
Cultural theories
Situational ethics
“When in Rome…do as the Romans do.”
Limitation:
Which Romans?
Is this Ethical?

29. Social Contract Theory (1)
Thomas Hobbes suggested that human beings tacitly agree to laws and regulations on their behaviour so that they can both live in harmony and achieve their own ends

30. Social Contract Theory (2)
Donaldson and Dunfee (1999) take this approach further in their ‘Integrated Social Contract Theory’. Basic moral minima (‘hypernorms’) include:
Not causing gratuitous harm
Honouring contracts
Respecting human rights
Treating people and organisations fairly

31. Consequence of Compromising Bribes vs. Grease Payments
Definitions
Grease Payments—Money given for the purpose of getting minor officials to do what they are supposed to be doing.
Bribes—Relatively large amounts of money given far the purpose of influencing officials to make decisions or take actions that they otherwise might not take.
Examples
Money given to minor officials (clerks, attendants, customs inspectors) for the purpose of expediting a project
Money given, often to high-ranking officials. Purpose is often to get these persons to purchase goods or services from the bribing firm.

32. Arguments For and Against ‘Bribery’
A necessary tool
Accepted practice
Form of commission, tax, or compensation
Against
Wrong/illegal
Compromise personal beliefs
Promotes government corruption
Benefits recipient only
Creates dependence on corruption
Deceives stockholders

33. FOREIGN CORRUPT PRACTICES ACT
Forbids U.S. companies to make or offer payments or gifts to foreign government officials to get or retain business
“Reason to know" provision

34. Foreign Corrupt Practices Act (FCPA) has been around since 1977
FCPA does not prohibit some forms of payments that may occur in international business
payments made under duress to avoid injury or violence are acceptable
Foreign Corrupt Practices Act (FCPA) has been around since 1977

35. EFFECTS OF THE “ETHICS GAP”
FCPA and proliferation of ethical codes in US are creating and ethics gap
FCPA blocked some gains in export market share and FDI
Pressure on other countries to follow US rules

36. U.S. Laws Apply in Host Countries
(1) Foreign Corrupt Practices Act (FCPA)
The FCPA makes it illegal for companies to pay bribes to foreign officials, candidates, or political parties
Stiff penalties can be assessed against company officials found guilty of paying a bribe
(2) National Security Laws
U.S. firms, their foreign subsidiaries, or foreign firms that are licensees of U.S. technology cannot sell a product to a country which could affect national security of the U.S.
The control of the sale of goods that have a strategic and military value was prohibited to communist countries that were viewed as major threats to U.S. security
(3) Antitrust Laws
Antitrust enforcement protects American consumers from actions that restricts competition
Antitrust legislation also protect American export and investment opportunities against any privately imposed restrictions to compete on merit

37. Presentation Structure
Ethics in Work Place
Ethics and Law / Behavior in Work Place
International/National Effects of Ethical Behavior
How to make Ethical Decision
in the Work Place
Conclusion

38. How to make Ethical Decision IN THE WORKPLACE
E. If You’re Unsure - Before You Act -- ASK:
Is this legal?
Is it against co. policy?
Could the action cause loss or harm to anyone?
If everyone I knew saw me, would I feel uncomfortable?

39. Quick Ethics Test Is the action legal? Is it right?
Who will be affected?
Does it fit company values?
How will it “feel” afterwards?
How will it look in the newspaper?
Will it reflect poorly on the company?
March 30, 2006
LIS580- Spring 2006
G.Dessler, 2003

40. How to Foster Ethics at Work
Emphasize top management’s commitment.
Publish an ethics code.
Establish compliance mechanisms. Involve personnel at all levels.
Train employees.
Measure results.
March 30, 2006
LIS580- Spring 2006
G.Dessler, 2003

41. What Is Organizational Culture?
The characteristic set of values and ways of behaving that employees in an organization share.
Patterns of Behavior
Ceremonial events, written and spoken comments, and actual behaviors of an organization’s members that create the organizational culture.
Values and Beliefs
Guiding standards of an organization that affirm what should be practiced, as distinct from what is practiced.
G.Dessler, 2003

42. Components of Organizational Culture
Signs and Symbols
Practices and actions that create and sustain a company’s culture.
Stories
The repeated tales and anecdotes that contribute to a company’s culture by illustrating and reinforcing important company values.
Rites and Ceremonies
Traditional culture-building events or activities that symbolize the firm’s values and help convert employees to these values.
G.Dessler, 2003

43. The Need: Improving Global Business Ethics
Fundamental International Rights
The right to physical security
The right to freedom of speech and association
The right to minimal education
The right to political participation
The right to subsistence
The right to physical movement
The right to ownership of property
The right to freedom from torture
The right to a fair trial
The right to nondiscrimination

44. Program Blueprint Policy Standards Foundations Process On-going
Identify
foundations
for the
program
Develop a
policy for
each
standard
Draw compliance
standards from
regs, statutes and
agency requirements
Establish and
implement
processes
On-going
program reviews
Policy
Process
Review

45. International Conventions
Many countries participate in international conventions designed for mutual recognition and protection of intellectual property rights
The three major international conventions include:
The Paris Convention for the Protection of Industrial Property, commonly referred to as the Paris Convention, includes the United States and 100 other countries
The Inter-American Convention includes most of the Latin American nations and the United States.
The Madrid Arrangement, which established the Bureau for International Registration of Trademarks, includes 26 European countries.

46. INTERNATIONAL CODES OF CONDUCT
For moral language to work, there must be codes of conduct
Current codes exist based on codes from international governing bodies (UN, ILO) and international agreements (Exhibit 4.8)

48. Recent Ethical Decisions: NEW FAR PART 3.10
3.1002  Policy.
(a) Government contractors must conduct themselves with the highest degree of integrity and honesty.
(b) Contractors should have a written code of business ethics and conduct. To promote compliance with such code of business ethics and conduct, contractors should have an employee business ethics and compliance training program and an internal control system.

49. NEW FAR PART 3.10 3.1002 Policy continued:
(1) Are suitable to the size of the company and extent of its involvement in Government contracting;
(2) Facilitate timely discovery and disclosure of improper conduct in connection with Government contracts; and
(3) Ensure corrective measures are promptly instituted and carried out.

50. Presentation Structure
Ethics in Work Place
Ethics and Law / Behavior in Work Place
International/National Effects of Ethical Behavior
How to make Ethical Decision
in the Work Place
Conclusion

51. CONCLUSIONS
Multinational managers face ethical challenges magnified by the international context
Need to understand home ethical codes and impact on ethics of foreign culture/social institutions

53. Any Questions? Dr. AMIN GHAFOORIPOUR Assistant Professor
(+1)
Any Questions?