Ethics
accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.
Business Ethics
accepted principles of right or wrong governing the conduct of business people
Ethical Strategy
a strategy, or course of action, that does not violate these accepted principles
Most common ethical issues in business involve:
- Employment practices
- Human rights
- Environmental pollution
- Corruption
- Moral Obligations
When work conditions in a host nations are clearly inferior to those in a multinational's home nation, what standards should be applied?
- Standards of the home nation?
- standards of the host nation?
- Something between?
What is the responsibility of a foreign multinational when operating in a country where basic human rights are not respected?
Basic human rights taken for granted in the developed world such as freedom of association, freedom of speech, freedom of assembly, freedom of movement, and so on, are not universally accepted.
Should a multination feel free to pollute in a developing nation if doing so does not violate laws?
When environmental regulations in host nations are fat inferior to those in the home nation, ethical issuer arise.
Is it ethical to make payments to government officials to secure businesses?
- The Foreign Corrupt Practices Act prohibits U.S. companies from paying bribes to foreign to foreign government officials in order to gain business
- The OECD's Convention on Combating Bribery of Foreign Public Officials in International Business Transac
Why do managers behave in an unethical manner?
Managerial Behavior is influenced by:
- Personal ethics
- Decision making processes
- Organizational culture
- Unrealistic performance expectations
- Leadership
- Societal Culture
Business Ethics (2)
reflect personal ethics, which are the generally accepted principles of right and wrong governing the conduct of individuals.
Expatriates may face pressure to violate their personal ethics because:
- they are away from their ordinary social context and supporting culture.
- they are psychologically and geographically distant from the parent company
Studies show that business people may behave unethically because they fail to ask the relevant question: "Is this decision or action ethical?
Decisions are made based on economic logic without consideration for ethics
Unethical behavior may exist in firms with an Organization culture that does not emphasize business ethics
Values and norms shape the culture of a firm, and that culture influences decision making
Unrealistic Performance Expectations
Pressure from the parent company to meet performance goals that are unrealistic, which can only be attained by acting in an unethical manner
Ethical Components should include
Confidence in and respect for people, open communication, and concern for the individual employee
If a firms leaders fail to act in an ethical manner, other employees may not act ethically. Why?
- Actions speak louder than words.
- Leaders are vital in helping a firm establish its organizational culture as well as setting examples
Businesses should
strive to identify and hire people with a strong sense of personal ethics
Prospective employees should
Find out as much as they can about the ethical climate in an organization
Businesses need to build an organization culture that places high value on ethical behavior. To do so,
the business must explicitly articulate values that place a strong emphasis on ethical behavior.
Code of Ethics
a formal statement of the ethical priorities a business adheres to.
If can answer "Yes" to the following questions, the decision is ethically acceptable:
Q1 - Does my decision fall within the accepted values of standards that typically apply in the organizational environment ?
Q2 - Am I willing to see the decision communicated to all stakeholders affected by it?
Q3 - Would the people with whom I have signi
Five-Step process to think through ethical issues:
1) How would a decision affect stakeholders
2) Determine if a proposed decision violates the fundamental rights of any stakeholders
3)Establish Moral intent
4) Engage in ethical behavior
5) Audit Decisions
Internal Stakeholders
people who work for or who own the business such as employees, the board of directors, and stockholders
External Stakeholders
the individuals or groups who have some claim on a firm such as customers, suppliers, and unions.
Moral Intent
refers to the business' must resolve to place moral concerns ahead of other concerns in cases where either the fundamental right of stakeholders or key morals principles have been violated.
Ethic officers ensure that:
- employees are trained to be ethically aware
- Ethical considerations enter decision-making
- The company's code of ethics is followed
Taking Moral Courage
- Managers need to be able to walk away from decisions are are profitable, but unethical
- Employees need to be able to say no to actions that are unethical
Do MNEs have a responsibility to give back to societies that enable them to grow and prosper?
There should be a presumption in favor of decisions that have both good economic and good social consequences.
Corporate Social responsibility
the idea that business people should take the social consequences of economic actions into account when making business decisions.
Sustainable strategies
Strategies that not only help the MNC make good profits, but also do so without harming the environment while simultaneously ensuring that the company operates in a socially responsible manner with regard to its stakeholders
Sustainable strategies can be good for:
Shareholders, the environment, local communities, employees, and customers