1. Ethical Issues in Global Business
Marketing and safety practices
– Nestle: the Baby Killers; Union Carbide: Bhopal
Sweatshop and labour abuse
- Wal-Mart’s Kathy Lee collection (20 $0.20hr)
Corruption and bribery
- Gulf Oil: political contributions to Korea ($4.2 million) – Lockheed: bribes to Middle East ($22 million) and Japan ($12.5 million)

2. 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.

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

4. 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

5. Improving Global Business Ethics
Integrative Social Contract Theory (ISCT)
Hypernorms-- transcultural values including fundamental human rights
Consistent norms-- norms that are culturally specific, but consistent with hypernorms
Moral free space norms-- strongly held cultural beliefs in countries that are in tension with hypernorms
Illegitimate norms– those norms that are incompatible with hypernorms

6. Using ISCT: The Case of Bribery
Is bribery part of moral free space or is it an illegitimate norm?
1) violates agent / principal contract
2) against law in all countries
3) violates political participation hypernorm
4) violates economic efficiency hypernorm
Conclusion: Bribery is an illegitimate norm

7. Trends Against Bribery
Foreign Corrupt Practices Act enacted
Transparency International developed
OCED Antibribery Initiatives launched
#10 on UN Global Compact

8. Improving Global Business Ethics
Fundamental International Rights
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
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

9. Improving Global Business Ethics
The Dilemma
of the Multinational Corporation
The Multinational Corp.
Home Country Stakeholder Pressures
Host Country Stakeholder Pressures

10. No-win situations for MNC’s
Labour-saving technology vs. employment motives
Take the money and run vs. spreading $$ to gain more power
Local wage rates = exploitation vs. higher rates = creaming market

11. Improving Global Business Ethics
Ethical Choices in Home vs. Host Country Situations
Broad Middle Ground
Mix of Home and Host Country Standards
Home Country
ETHICAL IMPERIALISM
Host Country
CULTURAL RELATIVISM
Application of Ethical Principles
International Law Global Codes of Conduct
Cultural standards
Ethical & moral standards of home country
Ethical & moral standards of host country
Questions to be resolved by Management:
Which ethical standard will be used?
Which ethical standard will transcend national boundaries?
Worker and product safety?
Fair treatment?
Health?
Discrimination?
Freedom?
Minimum pay?
Consumer rights?
Environmental protection?
What constitutes moral minimum in each category?

12. Improving Global Business Ethics
Typology of Global Types
Foreign type
Empire type
Interconnection type
Global type

13. Improving Global Business Ethics
Seven Moral Guidelines for MNCs
Pay their fair share of taxes
Respect local cultural beliefs that do not violate moral norms
Cooperate with the government to develop and enforce background institutions
Inflict no intentional or direct harm
Produce more good than bad for the host country
Contribute to host country’s development
Respect the human rights of their employees