Business Ethics
Accepted principles of right or wrong governing the conduct of business people
Ethical Strategy
A course of action that does not violate a company's business ethics
In the international business setting, what do the most common ethical issues involve?
-employment practices
-human rights
-environmental regulations
-corruption
-moral obligation of multinational corporations
Employment Practices
-are standards of the host or home nation applied?
-Nike (women who worked with toxic materials 6 days a week for only 20 cents an hour @ a Vietnamese subcontractor)
---> Nike code of conduct for subcontractors and instituted annual monitoring by independ
Human Rights
AFRICA Example:
1. GM --> Sullivan Principles in S. Africa in 1980s (company would not obey apartheid laws & company should do everything in its power to promote abolition of apartheid laws)
2. Eventual divestments within S.Africa. (after 10 ish years) [E
Environmental Pollution
-Example: Lead sales within Mexico from batteries
--pollution regulations
--Polluting even if not regulated hurts all -->Tragedy of the Commons
Tragedy of the Commons
The tragedy of the commons occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation
-->outsourcing can lead to the contribution to the global tragedy of the commons
--Created by Garrett Ha
Corruption
-Example--Carl Kotchian, president of Lockheed, made a 12.6 million payment to Japanese agents an govt. officials to secure a large order for Lockheed's TriStar jet from Nippon Air.
-Lockheed case was an impetus for the 1977 passing for the Foreign Corrup
Foreign Corrupt Practices Act
U.S. Law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions
Subsequently amended to allow for "facilitating payments." Sometimes known as speed money or grease payments to secure contrac
Convention on Combating Bribery of Foreign Officials in International Business Transactions
Into force in 1999
An OECD convention that establishes legally binding standards to criminalize bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective.
**convention e
Moral Obligations
Multinational corporations have power that comes from their control over resources and their ability to move production from country to country
with power comes social responsibility to give something back to the societies that enable them to prosper and
Social Responsibility
The idea that businesspeople should consider the social consequences of economic actions when making business decisions
there should be a presumption in favor of decisions that have both good economic and social consequences
Noblesse oblige
French term that refers to honorable and benevolent behavior considered the responsibility of the people of high birth
Ethical Dilemma
Def: A situation in which there is no ethically acceptable solution
EXAMPLE:
--12 year old hired to work on the floor at a subsidiary; someone from the US comes in and sees that is "not ethical" and makes the subsidiary replace her. She is the bread winne
ROOTS OF ETHICAL BEHAVIOR
WEB DIAGRAM (PAGE 133)
Center: Ethical Behavior:
Stems:
-Societal Culture:
-Decision-Making Processes
-Leadership
-Unrealistic Performance Goals
-Organizational Culture
-Personal Ethics
Personal Ethics:
Definition----the generally accepted principles of right and wrong governing the conduct of individuals
Societal business ethics are not divorced from personal ethics
Home-country managers working abroad in multinational firms (expatriate managers) may ex
Decision-Making Processes
some people do not even realize they are making an unethical decision
The fault lies in the processes that do not incorporate ethical considerations into business decision making
Nikes decision to subcontract:
Those decisions were probably made based on g
Organizational Culture
Definition: The values and norms shared among an organization's employees
values--abstract ideas about what a group believes to be good , right
norms--are the social rules and guidelines that prescribe appropriate behavior in particular situations
Unrealistic Performance Expectations
pressure from the parent company to meet unrealistic performance goals that can be attained only by cutting corners or acting in an unethical manner.
"The HP Way" -- values, which shape the way business is conducted both within and by the corporation, hav
Leadership
employees take cues from their business leaders
Societal Culture
Studies indicated that there were significant differences among the ethical policies of firms headquartered in different countries
Companies HQ'ed in cultures where individualism and uncertainty avoidance are strong were more likely to emphasize the impor
STRAW Men
either deny the value of business ethics or apply the concept in a very unsatisfactory way
The Friedman Doctrine
(Straw Men)
Freidman's basic position is that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.
"There is only one social responsibility of business--to use its resources and engage in
Cultural Relativism
The belief that ethics are culturally determined and that firms should adopt the ethics of the culture in which they operate
-------
Which is the belief that ethics are nothing more than the reflection of a culture--all ethics are culturally determined--a
Righteous Moralism
DEF---the belief that a multinational's home-country standards of ethics are the appropriate one for companies to follow in foreign countries
*typically associated with managers from developed countries
italy tax example--the right thing to do is to follo
Naive Immoralist
The belief that if a manager of a multinational sees that firm from other nations are not following ethical norms in a host nation, that manager should not either
The Naive Immoralist
**Classic example is the drug lord problem
paying off druglord to not be bombed is ethical because everyone is doing it.
1. to say that an action is ethically justified if everyone is doing it is not sufficient
2. the multinational must recognize that it
Utilitarian Approaches to Ethics
Definition---These hold that the moral worth of actions or practices is determined by their consequences.
An action is judged desirable if it leads to the best possible balance of good consequences over bad consequences
as a philosophy for business ethics
Kantian Ethics
(from immanuel kant)
The belief that people should be treated as ends and never as means to the ends of others
People are not instruments, like a machine. People have dignity and need to be respected as such employing people in sweatshops, making them wor
Right Theories
20th century theory that recognizes that human beings have fundamental rights and privileges that transcend national boundaries and cultures
What do moral theorists argue?
Moral theorists argue that fundamental human righs form the basis for the moral compass that managers should navigate by when making decisions that have an ethical component
What was the underlying motivation for the United Nations Universal Declaration of Human Rights
The Notion that there are fundamental rights that transcend national borders and culture was the underlying motivation for the United Nations Universal Declaration of Human rights,.
Universal Declaration of Human Rights
A United Nations Document that lays down the basic principles of human rights that should be adhered to.
which has been ratified by almost every country on the planet and lays down the basic principles that should always be adhered to irrespective of the
Justice Distribution
a distribution of goods and services that is considered fair and equitable
Justice Theories
focus on the attainment of a just distribution of economic goods and services
Veil of Ignorance
(Rawls)
Under the veil of ignorance, everyone is imagined to be ignorant of all of his or her particular characteristics, for example, race, sex, intelligence, naionality, family backgrouund, and special talents. Rawls then asks what people would unanimou
difference principle
(Rawls)
inequalities are justified if they benefit the position of the least-advantaged person.
(read more on this -- page 140)