Business Ethics Fundamentals

1
BA 385 What MNCs Owe Society
Chapter Nine ETHICAL ISSUES in the GLOBAL ARENA
2
Concepts of Global Business
3
Eras of Internationalization

4
Eras of Internationalization

5
Pros and Cons of Globalization
6
MNCs and the Global Environment

• Changed scope and nature of U.S.-based
  multinationals
• Underlying challenges of operating in new world
  of business
• Corporate legitimacy
• MNC and host country philosophy
• MNC and host country challenges
• Cultural differences
• Business and government differences
• Management and control of global operations
• Exploration of global markets

7
The Dilemma of the Multinational Corporation
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Ethical Issues in Global Business
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9
Social Accountability 8000

• Child labor
• Forced labor
• Health and safety
• Freedom of association and Right to Collective
  Bargaining
• Discrimination
• Discipline
• Working Hours
• Compensation
• Management Systems

10
Arguments For and Against Bribery
Against Bribery
For Bribery

• Wrong
• Illegal
• Compromise personal beliefs
• Promotes government corruption
• Once started, never stops
• Prohibits taking a stand for honesty, morality,
  ethics
• Benefits recipient only
• Creates dependence on corruption
• Deceives stockholders

• Necessary to do business
• Common practice
• Accepted practice
• Form of commission, tax, or compensation

11
Trends Against Bribery
12
Bribes versus Grease Payments

13
Improving Global Business Ethics

The Dilemma of the Multinational Corporation
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Ethical Choices in Home versus Host Country
Situations

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Ethical Choices in Home versus Host Country
Situations

Questions to be Resolved by Management

• Which ethical standards will be used?
• Which ethical standards will transcend national
  boundaries?
• Worker and product safety? Fair treatment?
• Health? Discrimination? Freedom? Minimum pay?
• Consumer rights? Environmental Protection?
• What constitutes moral minimums in each category?

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Actions for Improving International Business
Ethics

• Create global codes of conduct
• Corporate global codes and standards
• International organization global codes and
  standards
• Integrate ethics into a global strategy
• Suspend activities in host country
• Create ethical impact statements

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Global Standards from International
Organizations (see p. 324 in text)
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Fundamental International Rights

• 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

• 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 nondiscriminatory treatment

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Seven Moral Guidelines for MNCs

• Inflict no intentional or direct harm
• Produce more good than bad for the host country
• Contribute to host countrys development
• Respect the human rights of their employees

• 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