1、International Business9eBy Charles W.L. HillMcGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter 5Ethics in International Business5-3What Is Ethics?Ethics - accepted principles of right or wrong that governthe conduct of a personthe members of a professiont
2、he actions of an organization Business ethics - accepted principles of right or wrong governing the conduct of business peopleEthical strategy - a strategy, or course of action, that does not violate these accepted principles 5-4Which Ethical Issues Are Most Relevant To International Firms? The most
3、 common ethical issues in business involve1. employment practices2. human rights3. environmental regulations4. corruption5. the moral obligation of multinational companies5-5How Are Ethics Relevant To Employment Practices?Suppose work conditions in a host nation are clearly inferior to those in the
4、multinationals home nationWhich standards should apply?home country standardshost country standardssomething in between5-6How Are Ethics Relevant To Employment Practices?Firms should establish minimal acceptable standards that safeguard the basic rights and dignity of employeesaudit foreign subsidia
5、ries and subcontractors regularly to ensure they are meeting the standardstake corrective action as necessary5-7How Are Ethics Relevant To Human Rights?Basic human rights are taken for granted in developed countriesfreedom of associationfreedom of speechfreedom of assemblyfreedom of movementQuestion
6、: What are the responsibilities of firms in countries where basic human rights are not respected? 5-8How Are Ethics Relevant To Human Rights?Question: Is it ethical for companies to do business with countries with repressive regimes?MyanmarNigeriaQuestion: Does multinational investment actually help
7、 bring change to these countries and ultimately improve the rights of citizens?China5-9How Are Ethics Relevant To Environmental Regulations? Some parts of the environment are a public good that no one owns, but anyone can despoil What happens when environmental regulations in host nations are far in
8、ferior to those in the home nation?Is it permissible for multinationals to pollute in developing countries simply because there are no regulations against it?legal versus ethical behavior The tragedy of the commons occurs when a resource held in common by all, but owned by no one, is overused by ind
9、ividuals, resulting in its degradation5-10How Are Ethics Relevant To Corruption?The U.S. Foreign Corrupt Practices Act outlawed the practice of paying bribes to foreign government officials in order to gain business amended to allow for facilitating paymentsThe Convention on Combating Bribery of For
10、eign Public Officials in International Business Transactions was adopted by the Organization for Economic Cooperation and Development (OECD)obliges member states to make the bribery of foreign public officials a criminal offense5-11How Are Ethics Relevant To Corruption?But, is it permissible for mul
11、tinationals to pay government officials facilitating payments if doing so creates local income and jobs?is it ok to do a little evil in order to do a greater good?does grease money actually improve efficiency and help growth? 5-12How Are Ethics Relevant To Moral Obligations?Social responsibility ref
12、ers to the idea that managers should consider the social consequences of economic actions when making business decisionsthere should be a presumption in favor of decisions that have both good economic and good social consequences it is the right way for a business to behave5-13How Are Ethics Relevan
13、t To Moral Obligations?Advocates argue that businesses need to recognize their noblesse oblige - honorable and benevolent behavior that is the responsibility of successful companies give something back to the societies that have made their success possibleBut, are multinationals morally required to
14、use their power to enhance local welfare?5-14What Are Ethical Dilemmas?Ethical dilemmas - situations in which none of the available alternatives seems ethically acceptablereal-world decisions are complex, difficult to frame, and involve consequences that are difficult to quantify the ethical obligat
15、ions of an MNE toward employment conditions, human rights, corruption, environmental pollution, and the use of power are not always clear cutthe right course of action is not always clear5-15Why Do Managers Behave Unethically?Several factors contribute to unethical behavior including1.Personal ethic
16、s - the generally accepted principles of right and wrong governing the conduct of individualsexpatriates may face pressure to violate their personal ethics because they are away from their ordinary social context and supporting culture managers fail to question whether a decision or action is ethica
17、l, and instead rely on economic analysis when making decisions 5-16Why Do Managers Behave Unethically?2.Decision-making processes - the values and norms that are shared among employees of an organization organization culture that does not emphasize business culture encourages unethical behavior3.Org
18、anizational culture - organizational culture can legitimize unethical behavior or reinforce the need for ethical behavior4.Unrealistic performance expectations - encourage managers to cut corners or act in an unethical manner5-17Why Do Managers Behave Unethically?5.Leadership - helps establish the c
19、ulture of an organization, and set the examples that others followwhen leaders act unethically, subordinates may act unethically, too6.Societal culture firms headquartered in cultures where individualism and uncertainty avoidance are strong are more likely to stress ethical behavior than firms headq
20、uartered in cultures where masculinity and power distance rank high5-18Why Do Managers Behave Unethically?Determinants of Ethical Behavior5-19What Are The Philosophical Approaches To Ethics?There are several different approaches to business ethicsStraw men approaches deny the value of business ethic
21、s or apply the concept in an unsatisfactory wayOthers approaches are favored by moral philosophers and are the basis for current models of ethical behavior 5-20What Are The Straw Men Approaches To Business Ethics? There are four common straw men approaches1. Friedman doctrine - the only social respo
22、nsibility of business is to increase profits, so long as the company stays within the rules of law2. Cultural relativism - ethics are culturally determined and firms should adopt the ethics of the cultures in which they operate“when in Rome, do as the Romans do” 5-21What Are The Straw Men Approaches
23、 To Business Ethics?3.Righteous moralist - a multinationals home country standards of ethics should be followed in foreign countries 4.Nave immoralist - if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either
24、 All approaches offer inappropriate guidelines for ethical decision making 5-22What Are Utilitarian And Kantian Approaches To Ethics?Utilitarian ethics - (David Hume, Jeremy Bentham, John Stuart Mills) - the moral worth of actions or practices is determined by their consequencesactions are desirable
25、 if they lead to the best possible balance of good consequences over bad consequencesbut, it is difficult to measure the benefits, costs, and risks of an actionthe approach fails to consider justice5-23What Are Utilitarian And Kantian Approaches To Ethics?Kantian ethics - (Immanuel Kant) - people sh
26、ould be treated as ends and never purely as means to the ends of otherspeople have dignity and need to be respectedpeople are not machines 5-24What Are Rights Theories?Rights theories - human beings have fundamental rights and privileges which transcend national boundaries and cultures establish a m
27、inimum level of morally acceptable behaviorthe Universal Declaration of Human Rights - basic principles that should always be adhered to irrespective of the culture in which one is doing businessMoral theorists argue that fundamental human rights form the basis for the moral compass that managers sh
28、ould navigate by when making decisions which have an ethical component5-25What Are Justice Theories?Justice theories focus on the attainment of a just distribution of economic goods and servicesa just distribution is one that is considered fair and equitableJohn Rawls argued that all economic goods
29、and services should be distributed equally except when an unequal distribution would work to everyones advantage impartiality is guaranteed by the veil of ignorance - everyone is imagined to be ignorant of all his or her particular characteristics5-26How Can Managers Make Ethical Decisions?1. Hire a
30、nd promote people with a well grounded sense of personal ethics refrain from promoting individuals who have acted unethically try to hire only people with strong ethics prospective employees should find out as much as they can about the ethical climate in an organization prior to taking a position 5
31、-27How Can Managers Make Ethical Decisions?2.Build an organizational culture that places a high value on ethical behavior articulate values that place a strong emphasis on ethical behavior emphasize the importance of a code of ethics - formal statement of the ethical priorities a business adheres to
32、 implement a system of incentives and rewards that recognize people who engage in ethical behavior and sanction those who do not5-28How Can Managers Make Ethical Decisions?3. Make sure that leaders within the business articulate the rhetoric of ethical behavior and act in a manner that is consistent
33、 with that rhetoric give life and meaning to words make sure that leaders emphasize the importance of ethics verbally and through their actions5-29How Can Managers Make Ethical Decisions?4.Put decision making processes in place that require people to consider the ethical dimensions of business decis
34、ionsAsk whether decisions fall within the accepted values of standards that typically apply in the organizational environment decisions can be communicated to all stakeholders affected by it if colleagues would approve of decisions5-30How Can Managers Make Ethical Decisions?Managers can also use a f
35、ive step process to think through ethical problems: Step1: Identify which stakeholders (the individuals or groups who have an interest, stake, or claim in the actions and overall performance of a company) a decision would affect and in what ways internal stakeholders are people who work for or who o
36、wn the business such as employees, the board of directors, and stockholders external stakeholders are the individuals or groups who have some claim on a firm such as customers, suppliers, and unions5-31How Can Managers Make Ethical Decisions?Step 2: Determine whether a proposed decision would violat
37、e the fundamental rights of any stakeholdersStep 3: Establish moral intent - place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated 5-32How Can Managers Make Ethical Decisions?Step 4: Engage in ethical beha
38、vior Step 5: Audit decisions and review them to make sure that they are consistent with ethical principlesthis step is often overlooked even though it is critical to finding out whether a decision process is working 5-33What Is An Ethics Officer?Many firms now have ethics officers to ensureall emplo
39、yees are trained in ethicsethics is considered in the decision-making processthe companys code of conduct is followed5-34How Can Managers Make Ethical Decisions?5.Develop moral courageenables managers to walk away from a decision that is profitable, but unethical gives an employee the strength to sa
40、y no to a superior who instructs her to pursue actions that are unethical gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company5-35How Can Managers Make Ethical Decisions?In the end, there are clearly things that an international business should do, and there are things that an international business should not do But, it is important to remember that not all ethical dilemmas have a clean and obvious solutionin these situations, firms must rely on the decision making ability of its managers
