Chapter Eight Ethical Issues in International Business

1
Chapter EightEthical Issues in International
Business

• Ethical Theory and Business, 6th Edition
• Tom L. Beauchamp Norman E. Bowie

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Objectives

• After studying this chapter the student should be
  able to
• Describe problems encountered by multinational
  corporations when conducting business with other
  countries.
• Contrast the transcendental normative environment
  and the group normative environment.
• Analyze the ethical issues of the Japanese
  business community.

3
Objectives

• Discuss the concept of reciprocity as it applies
  to the Chinese culture.
• Explain the guidelines for conducting business
  with Chinese businesspeople.
• Contrast gift giving, bribery, and corruption.
• Define the term sweatshop.
• Discuss the development of the campus
  anti-sweatshop movement.
• Discuss possible standards for appropriate wages
  and labor standards in international sweatshops.

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Objectives

• Discuss the potential economic problems that may
  occur if current sweatshop practices are changed.

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Overview

• Multinational Corporations
• Bribery
• Sweatshops

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Multinational Corporations
7
Norman Bowie

• Relativism and the Moral Obligations of
  Multinational Corporations
• General multinational corporation obligations
• Distinctive obligations
• Relativism
• Morality of the marketplace

8
Daryl Koehn

• What Can Eastern Philosophy Teach Us About
  Business Ethics?
• Cullen Chair of Business Ethics, University of
  St. Thomas in Houston
• Do Asian values exist?
• Watsuji Tetsuro and Confucius
• Meaning of trust
• Relations are for life
• Ethics beyond rights

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Iwao Taka

• Business Ethics A Japanese View
• Religious dimension
• Transcendental normative environment
• Numen Soul, spirit, or spiritual energy.
• Transcendentalism The philosophy that every
  phenomenon is an expression of the great life
  force and is ultimately connected with the numen
  of the universe.
• Japanese meaning of work
• Group normative environment

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Iwao Taka

• Living between the group and individual
  environments
• Social dimension
• Concentric circles of corporations
• Family, fellows, Japan, and world
• Dynamics of the concentric circles
• The individuals
• The contextuals
• Group environment and concentric circles

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Iwao Taka

• Japanese recognition of the American business
  community
• Job description and the transcendental logic
• Employees interest and the group logic
• Claims against the Japanese market and the
  concentric circles ethics

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Iwao Taka

• Ethical Issues of the Japanese business community
• Discrimination and transcendental logic
• Transcendental logic has favored the male
  society.
• Transcendental logic has been used to accuse
  certain workers of laziness.
• Employees dependency and the group logic
• Exclusiveness of the concentric circles

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Patricia H. Werhane

• Exporting Mental Models Global Capitalism in
  the Twenty-First Century
• Ruffin Professor of Business Ethics, University
  of Virginia
• Mental models - The mechanisms whereby humans are
  able to generate descriptions of system purpose
  and form explanations of system functioning and
  observed system states and predictions of future
  system states.

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Patricia H. Werhane

• This article examines the possibilities of using
  an American free enterprise capitalist model for
  conducting business in a global arena.

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Bribery
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P. Steidlmeier

• Gift Giving, Bribery, and Corruption Ethical
  Management of Business Relationships in China
• Associate Professor School of Management,
  Binghamton University
• Developing a cultural framework for reciprocity
• Artifacts
• Social knowledge
• Cultural logic

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P. Steidlmeier

• Interacting with others in China
• Moral analysis of reciprocity
• Guidelines for doing business right in China
• Investigate the backgrounds of local executives
  you place in charge of company matters.
• Ensure no one individual has total control over
  company matters.
• Treat remarks such as China is different and
  You shouldnt get involved as red flags.

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P. Steidlmeier

• Establish regular and detailed auditing systems
  to ensure transparency.
• Be aware of the political standing of your
  counterparts and do not get caught in the cross
  fire of Chinese power struggles.
• Explain your difficulties to the Chinese side and
  offer alternatives that are legitimate.
• As much as possible, use Chinese sources
  themselves as the basis for your unwillingness to
  do corrupt deals.

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P. Steidlmeier

• Rather than becoming entangled in a specific
  minor bribe, place the whole matter in a broader
  context of negotiation.

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Thomas Donaldson and Thomas W. Dunfee

• When Ethics Travel The Promise and Peril of
  Global Business Ethics
• ISCT Core norms
• Hypernorms
• Consistent norms
• Moral free space
• Illegitimate norms
• Navigating the ISCT map

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Sweatshops
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Richard Applebaum and Peter Dreier

• The Campus Anti-Sweatshop Movement
• The global sweatshop
• Sweatshop A process where profits are sweated
  out of workers by forcing them to work longer and
  faster.
• Kathie Lee
• Robert Reich

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Richard Applebaum and Peter Dreier

• A sweat-free campus
• Began at Duke University, Fall 1997
• Required manufacturers of items with the Duke
  label to sign a pledge that they would not use
  sweatshop labor
• Quickly spread to other U.S. universities/colleges
  
• United Students Against Sweatshops (USAS) formed
  Summer 1998
• The industrys new clothes

24
Ian Maitland

• The Great Non-Debate Over International
  Sweatshops
• Carlson School of Management, University of
  Minnesota
• International sweatshop labor standards
• Home-country standard
• Living wage standard
• Classical liberal standard

25
Ian Maitland

• Charges against sweatshops
• Unconscionable wages
• Immiserization thesis
• Widening gap between rich and poor
• Collusion with repressive regimes
• Labor standards in international sweatshops
  painful tradeoffs