1. Ethics in Global Markets

2. Ethics in a Cross Cultural Environment
1. Why Bother?
 “Good Ethics is Good Business”

3.  “The Business of Business is Business”
Milton Friedman
Governmental Control versus Market Control
Inefficient Externalities
Costly Justice of Distribution

4. Legality versus Ethicality
Ethics is Prerequisite for Legal System,
Legal System is Prerequisite for Free
Market Economy

5. 2. Who is Responsible? ”Ethical Decisions are the Decisions of People
not Organizations”
Obfuscation by Bureaucratization

6.  “Ethical Decisions are Decisions of a Person’s Conscience”
Disparate and Fragmented
Decision Making Context
Reflection of Cultural Values
“It is easier to follow one’s conscience than one’s reason because the conscience will always offer some excuse and some cheer. This is why there are still so many conscientious and so few reasonable people”
Nietzsche, Friedrich (1980). Die fröhliche Wissenschaft, Gabler: München.

7. “The Organization Can Only Do Wrong in Pursuit of its Purpose”
Stockholders are Stakeholders
Definition of Purpose is elusive
Stakeholder Concept versus Stockholder Concept
Satisfaction of Needs and Maximization of
Interests of all Stakeholders Shareholder Value

8. Stakeholder Matrix to Increase Shareholder Value
High S1 S3
Potential for Threat S2 S4
Low
Low
High
Potential for Cooperation

9. Stakeholder Matrix to Balance differing Stakeholder Interests

10. Implications of Stakeholder Matrix:
S2: Little Impact (ex. Small Investors, Industry Associations, General Public)
Recommendation: Ongoing Observation, Little Allocation of Resources
S3: High Impact (ex. Qualified Employees, Key Accounts, Main Suppliers, Key
Customers)
Recommendation: Permanent Management to Ward off Potential Threats and
to Nurture Cooperative Relationships; High Allocation of Resources
S1: High Strategic and Low Ethical Importance (Ex. Unions, Suppliers,
Competitors)
Recommendation: Defensive Strategy, Decrease Dependencies;
Selective Allocation of Resources
S4: Low Strategic and High Ethical Importance (ex. Employees, Future
Generations, Local Community)
Recommendation: Exploit Potential to Cooperate; Selective Allocation
of Resources

11. 3. What Does it Mean to be Ethical?
“Ethics is the enterprise that attempts to formulate the
principles by which human life is to be lived”
Douglas Rasmussen
History
Culture
Ethics

12. 4. Ethics in a Cross Cultural Environment
Major Problem Areas:
Environmental Issues
Safety Issues
Wage Issues
Gender Issues
Consumer Deception
Corruption
FCPA

13. 4. Ethics in a Cross Cultural Environment
1. Cross Cultural Validity of Values
- Ethnocentrism
“When in Rome or anywhere else do as you would at home”
- Relativism
“When in Rome do as the Romans do”
- Universalism
“When in Rome do as you should do all over the world”

14. 2. Traditional Universal Ethical Rules - Deontological Theories
Inherent Wrongness or Rightness of Intended Actions
Examples:
 Golden Rule
 Categorical Imperative
“Act according to that maxim only, which you can wish,
at the same time to become a universal law”
Immanuel Kant ( )
Elusive
Impractical
Might Lead to Irresponsible Consequences

15. - Teleological Theories Moral Consequences of Actions
Example:
 Utilitarianism
“Greatest Happiness for the Greatest Number of People”
John Stuart Mill ( )
Denies any Absolute, Categorical Values
No Cross Cultural Understanding of
Happiness
Measurement Problems

16. 3. Dialogic Idealism
Communicative Approach for Ethical Dilemmas
“Act according to that maxim only, which you can
expect to be acceptable to all stakeholders in a dialogue
that is removed form all forms of force and coercion”

17. Two Principles of the Dialogic Idealism:
Universality Principle:
* Universal Rules of Ideal Dialogue
1. Everybody has the right to participate in dialogue
2. Everybody has same rights in dialogue
3. Everybody is willing to follow the better argument
4. A norm is only accepted if all participants can agree on it
* Universal Objective
Apply the rules of the ideal dialogue as much as possible
in real dialogue
Responsibility Principle:
* Assessment of Consequences in Real Dialogue