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Ethics

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accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization

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Business Ethics

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accepted principles of right or wrong governingg the conduct of businesspeople

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Ethical Strategy

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a course of action that does not violate a company's business ethics

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What are many of the ethical issues in international business rooted in?

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the fact that political systems, law, economic development, and culture vary significantly from nation to nation

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The most common ethical issues involve

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employment practices, human rights, environmental regulations, corruption, moral obligation of the MNC

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Sullivan Principles attempted to fight against

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apartheid laws 1) Not obeying the apartheid laws in its own South African operations 2) Company should do everything within its power to promote the abolition of apartheid laws

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Global Commons

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natural resources from which everyone benefits but for which no one is directly responsible for (i.e. the atmosphere and the oceans)

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Tragedy of the Commons

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occurs when a resource held by all, but owned by no one, is overused by individuals, resulting in its degradation

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Global Tragedy of the Commons

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occurs when corporations move production to locations where they are free to pump pollutants into the atmosphere or dump them in oceans or rivers, thereby harming these valuable global commons

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Foreign Corrupt Practices Act (FCPA)

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U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions

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What did the FCPA outlaw?

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paying bribes to foreign government officials to gain business

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Facilitating Payments (AKA "Speed Money/Grease Payments")

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payments to ensure receiving the standard treatment that a business ought to receive from a foreign governemnt, but might night due to the obstruction of a foreign official

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What are facilitating payments NOT?

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NOT payments to secure contracts that would otherwise not be secured NOT payments to obtain exclusive preferential treatment

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Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

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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

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Ethical Dilemmas

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situation in which there is no ethically acceptable solution

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Are societal business ethics divorced from personal ethics?

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No

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Causes of Unethical Behavior

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1) Personal Ethics 2) Decision-making Process 3) Organization Culture 4) Unrealistic Performance Goals 5) Leadership 6) Societal Culture

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Personal Ethics

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the generally accepted principles of right and wrong governing the conduct of individuals

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How can companies reduce the pressure on managers to violate their personal ethics?

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keeping managers psychologically and geographically close to the parent company

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Organizational Culture

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the values and norms shared among an organizations employees

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What are straw men approaches to business ethics?

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Raised by business ethics scholars primarily to demonstrate that they offer inappropriate guidelines for ethical decision making in a multinational enterprise, all have some inherent value, but are all unsatisfactory in important ways (4 approaches)

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1) Friedman Doctrine

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the social responsibility of business is to increase profits, so long as the company stays within the rules of the law

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Which straw man ideal explicitly rejects the idea that businesses should undertake social expenditures beyond those madated by the law and required for the efficient running of a business?

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The Friedman Doctrine

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2) Cultural Relativism

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ethics are culturally determined and that firms should adopt the ehtics of the cultures in which they operate

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Which of the following straw men approaches to business ethics is best summarized by the maxim "When in Rome, do as the Romans" ?

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cultural relativism

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3) Righteous Moralist

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One who claims that a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries

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The righteous moralist's approach to ethics is typically associated with who?

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managers from developed nations

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4) Naive Immoralist

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one who asserts that 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

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Utilitarian Approaches to Ethics

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hold that the moral worth of actions or practices is determined by their consequences

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Drawbacks to the utilitarian approach

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1) Can be difficult to measure the benefits, costs, and risks of a course of action 2) Philosophy omits the consideration of justice

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Kantian Ethics

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the belief that people should be treated as ends and never as means to the ends of others

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Rights Theories

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a 12th century theory that recognizes that human beings have fundamental rights and privileges that transcend national boundaries and cultures

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Universal Declaration of Human Rights

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a united nations document that lays down the basic principals of human rights that should be adhered to

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In stating that all human beings are born free and equal in dignity and rights and that they are endowed with reason and conscience and should act toward one another in a spirit of brotherhood, Article 1 of the Universal Declaration of Human Rights echoes: (which business ethics principle?)

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Kantian ethics

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According to the theory of rights what transcends national boundaries and cultures?

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fundamental human rights and privileges

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What is the Universal Declaration of Human Rights' stance on child labor in sweatshops?

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It is unethical even if it seems to be common in some countries

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What do Justice Theories focus on?

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the attainment of a just distribution of economic goods and services

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Just Distribution

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a distribution of goods and services that is considered fair and equitable

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What does John Rawls argue?

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all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage

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Rawls Veil of Ignorance

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everyone is imagined to be oblivious to all of their particular characteristics, such as race, sex, intelligence, nationality, family background, and special talents. Under this veil people would unanimously agree on two fundamental principles of justice:

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1) Rawls first principle of justice

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each person is permitted the maximum amount of basic liberty compatible with a similar liberty for others

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2) Rawls second principle of justice

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once equal basic liberty is ensured, inequality in basic social goods (income and wealth distribution, and opportunites) is to be allowed only if such inequalities benefit everyone

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Difference Principle

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Inequalities are justified if they benefit the position of the least-advantaged person

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Code of Ethics

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a business's formal statement of ethical priorities

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Stakeholders

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the individuals or groups that have an interest, stake, or claim, in the actions and overall performance of a company

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Internal Stakeholders

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people who work for or own the business such as employees, directors, and stockholders

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External Stakeholders

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individuals or groups that have some claim on a firm such as customers, suppliers, and unions

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What is the relationship all stakeholders have with the company?

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an exchange relationship

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Ethics Officers

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act as an internal ombudsperson with responsibility for handling confidential inquires from employees

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Corporate Social Responsibility

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refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions and that ther should be a presumption in favor of decisions that have both good economic and social consequences

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In the business setting what does the term noblesse oblige mean

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a benevolent behavior that is considered the responsibility of successful enterprises

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Sustainable Strategies

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strategies that not only help the multinational firm make good profits, but that do so without harming the environment, while simulataneously ensuring that the corporation acts in a socially responsible manner with regard to its multiple stakeholders

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