Notes on Ethics of International Business
IBE Notes L4 Ethics in International Business
Definition:
Business Ethics: the accepted principles of right or wrong governing the conduct of business people
Ethical strategy: a strategy/course of action that does not violate these accepted principles
A. source and nature of ethical issues in IB: different in political systems, law, economic development, culture
a) 5 common ethical issues:
Employment practices: establishing minimal acceptable standards that safeguard the basic rights and dignity of employees, auditing foreign subsidiaries and subcontractors on a regular basis to make sure those standards are met, and taking corrective action if they are not is a good way to guard against ethical abuses(Note!)
Example: Nike, Apple, Levi strauss
Human rights: freedom of association, speech, assembly, movement, political repression..
Example: General Motors & South Africa (Sullivan principles to against the apartheid laws)
Environmental pollution: when environmental regulations in host nations are inferior
Tragedy of commons: individual overuse a resource held in common by all but owned by no one, resulting in its degradation
Corruption: paying brides to foreign government officials to gain business
OECD &Convention on Combating Bribery of Foreign
Public officials in IB Transactions: make it a criminal offense
Facilitating payments*
Corruption decreases the returns and leads to low economic growth
Moral obligation: power comes with social responsibility both good economic and social consequences
Give something back to societies, enhance social welfare
b) Causes of unethical behaviour (why?)
Personal ethics: principles of right or wrong governing the conducting of individuals Comes from parent, schools, religion, the media Ethical standards
Decision-making processes: fault lies in process that do not incorporate ethical considerations into Decision-making
Organization culture:
Definition:
Business Ethics: the accepted principles of right or wrong governing the conduct of business people
Ethical strategy: a strategy/course of action that does not violate these accepted principles
A. source and nature of ethical issues in IB: different in political systems, law, economic development, culture
a) 5 common ethical issues:
Employment practices: establishing minimal acceptable standards that safeguard the basic rights and dignity of employees, auditing foreign subsidiaries and subcontractors on a regular basis to make sure those standards are met, and taking corrective action if they are not is a good way to guard against ethical abuses(Note!)
Example: Nike, Apple, Levi strauss
Human rights: freedom of association, speech, assembly, movement, political repression..
Example: General Motors & South Africa (Sullivan principles to against the apartheid laws)
Environmental pollution: when environmental regulations in host nations are inferior
Tragedy of commons: individual overuse a resource held in common by all but owned by no one, resulting in its degradation
Corruption: paying brides to foreign government officials to gain business
OECD &Convention on Combating Bribery of Foreign
Public officials in IB Transactions: make it a criminal offense
Facilitating payments*
Corruption decreases the returns and leads to low economic growth
Moral obligation: power comes with social responsibility both good economic and social consequences
Give something back to societies, enhance social welfare
b) Causes of unethical behaviour (why?)
Personal ethics: principles of right or wrong governing the conducting of individuals Comes from parent, schools, religion, the media Ethical standards
Decision-making processes: fault lies in process that do not incorporate ethical considerations into Decision-making
Organization culture: