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1、Global Business Today 7e,by Charles W.L. Hill,Chapter 4,Ethics in International Business,Introduction,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 are the accepted principles of righ
2、t or wrong governing the conduct of business people Ethical strategy is a strategy, or course of action, that does not violate these accepted principles,Ethical Issues in International Business,The most common ethical issues in business involve employment practices human rights environmental regulat
3、ions corruption the moral obligation of multinational companies,Employment Practices,Question: When work conditions in a host nations are clearly inferior to those in a multinationals home nation, what standards should be applied? The standards of the home nation? The standards of the host nation? S
4、omething in between?,Human Rights,Question: 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
5、, freedom of movement, and so on, are not universally accepted,Environmental Pollution,Question: Should a multinational feel free to pollute in a developing nation if doing so does not violate laws? Answer: When environmental regulations in host nations are far inferior to those in the home nation,
6、ethical issues arise 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,Corruption,Question: Is it ethical to make payments to government officials to secure business? Answer: In the United States, the
7、 Foreign Corrupt Practices Act outlawed the practice of paying bribes to foreign government officials in order to gain business The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions adopted by the Organization for Economic Cooperation and Development
8、(OECD) obliges member states to make the bribery of foreign public officials a criminal offense,Corruption,Some economists suggest that the practice of giving bribes might be the price that must be paid to do a greater good In countries where preexisting political structures distort or limit the wor
9、kings of the market mechanism, corruption in the form of black-marketeering, smuggling, and side payments to government bureaucrats to “speed up” approval for business investments may actually enhance welfare However, other economists have argued that corruption reduces the returns on business inves
10、tment and leads to low economic growth,Moral Obligations,Question: Do multinationals have a responsibility to give back to the societies that enable them to grow and prosper? Answer: Social responsibility - the idea that business people should take the social consequences of economic actions into ac
11、count when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and good social consequences,Ethical Dilemmas,Managers often face situations where the appropriate course of action is not clear Ethical dilemmas - situations in which none
12、 of the available alternatives seems ethically acceptable they exist because real world decisions are complex, difficult to frame, and involve various consequences that are difficult to quantify,The Roots of Unethical Behavior,Question: Why do managers behave in an unethical manner? Answer: Manageri
13、al behavior is influenced by Personal ethics Decision making processes Organizational culture Unrealistic performance expectations Leadership,The Roots of Unethical Behavior,Figure 4.1: Determinants of Ethical Behavior,Personal Ethics,Business ethics reflect personal ethics (the generally accepted p
14、rinciples 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,Decision Makin
15、g Processes,Studies show that business people may behave unethically because they fail to ask the relevant questionis this decision or action ethical? decisions are made based on economic logic, without consideration for ethics,Organizational Culture,Unethical behavior may exist in firms with an org
16、anization culture - the values and norms that are shared among employees of an organization - 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, and can only be attained by cutting corners or acting in an unethical manner can cause unethical behavior,Leadership,If a firms leaders fail to act in an e
