Business Ethics and Global Economy

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6433ch10.qxd_lb 10/19/06 10:43 AM Page 260

CHAPTER OBJECTIVES


CHAPTER 10

Business Ethics in a Global Economy

CHAPTER OUTLINE
Ethical Perceptions and International Business Culture as a Factor in Business Adapting Ethical Systems to a Global Framework Global Values The Multinational Corporation Sexual and Racial Discrimination Human Rights Price Discrimination Bribery Harmful Products Pollution and the Natural Environment Telecommunications Issues Intellectual-Property Protection World Trade Organization

To understand the role of culture as a factor in business ethics To discuss cultural relativism and global business ethics To explore global values To assess the role of multinational corporations in business ethics To gain awareness of a number of ethical issues around the globe



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6433ch10.qxd_lb 10/19/06 10:43 AM Page 261

AN ETHICAL DILEMMA*
At the Dun and Ready (D&R) Company, Sid was responsible for monitoring the Japanese stock market to determine patterns and identify stocks that could become active. One of ten company representatives in Japan, Sid, who was of Japanese descent and fluent in the language, had been assigned to Tokyo. Being relatively new to the firm, he was told to gather information for his boss, Glenna. Glenna had been with D&R for ten years, but because of the cultural barriers, she was not enthusiastic about her Tokyo assignment. Glenna encouraged Sid to get to know the Japanese brokers, traders, and other key people in the business, and, thanks to his background, he found that he blended easily into the culture. In Japan, ceremony and giving favors is a way of life. Sid learned that, by observing Japanese customs and perfecting his Japanese, he not only became an information resource on the Japanese stock market and its players for his company but also a resource for the Japanese who wanted to invest in the U.S. market. He found that the locals would talk to him about important investments rather than coming into the office to see Glenna. Among Sid’s duties was taking key customers to bars, restaurants, and vacation spots for entertainment. One day a government official in the group that Sid was entertaining hinted that he and the others would like to play golf on some famous U.S. courses. Sid understood what the government official wanted and relayed the request to Glenna, who told him that granting a favor of this kind would normally be against policy, but because such favors seemed to be the custom in Japan, they could do some “creative bookkeeping.” “When in Rome, right, Sid?” was Glenna’s response to the whole situation. By pulling some strings, Glenna managed to have these officials play at ten of the most exclusive U.S. golf courses. Later, several officials passed the word to people in Japan’s elite financial circle about Sid’s helpfulness. Six months later, Glenna was transferred back to the States. Rumor had it that expenses were too high and revenue too low. Her replacement, Ron, didn’t like being sent to Japan either. In his very first week on the job, he told the staff that he would shorten his tour in Tokyo by slashing expenses and increasing productivity. Ron was a “by-the-book” person. Unfortunately, company rules had not caught up with the realities of cultural differences. After two months with Ron, seven of the original ten company representatives had quit or been fired. Sid was barely surviving. Then one of his contacts in the government repaid a favor by recommending several stocks to buy and sell. The information paid off, and Sid gained some breathing room from Ron. Around the same time, some of Sid’s Japanese clients lost a considerable amount of money in the U.S. markets and wanted a “discount”—the term used for the practice in some large Japanese brokerage houses of informally paying off part of their best clients’ losses. When Glenna was still in Tokyo, she had dipped into the company’s assets several times to fund such discounts....
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