Transcript Document

OHT 7.1
International ethical and
ecological environment
Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004
OHT 7.2
Social Contract Theory (1)
• Thomas Hobbes suggested that human
beings tacitly agree to laws and regulations on
their behaviour so that they can both live in
harmony and achieve their own ends
Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004
OHT 7.3
Social Contract Theory (2)
• Donaldson and Dunfee (1999) take this
approach further in their ‘Integrated Social
Contract Theory’. Basic moral minima
(‘hypernorms’) include:
– Not causing gratuitous harm
– Honouring contracts
– Respecting human rights
– Treating people and organisations fairly
Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004
OHT 7.4
Integrated Social Contract Theory
• Hypernorms – moral minima
• Consistent norms – whilst consistent with
hypernorms and legitimate norms, reflect
culturally specific values
• Moral-free space – consistent with
hypernorms but clash with one or more
legitimate norms
• Illegitimate norms – inconsistent with
hypernorms
Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004
OHT 7.5
Global norms in the Integrated Social Contract Theory
(ISCT)
Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004
OHT 7.6
International Business and Ethics
Enderle (1995) identified four approaches
• Foreign country type – conforms to host country
norm
• Empire type – applies domestic norms to host
country
• Interconnection type – hybrid approach where
norms applied are based on pragmatism (what works
for the MNE)
• Global type – reflects norms deemed appropriate for
‘global citizenry’; not related to MNE interests
Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004
OHT 7.7
International Ethical Agreements
• OECD Guidelines for MNEs (1976)
• International Labour Office (ILO) Tripartite
Declaration of Principles concerning MNEs and
Social Policy (1977)
• UNCTAD Code on Restrictive Business Practices
(1980)
• UN Code of Conduct for Transnational Corporations
(1983)
• Multilateral Agreement on Investment (MAI): still
unresolved
Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004
OHT 7.8
Impact of environmental damage (MSC > MCP) on price
and output
Wall and Rees: International Business, 2nd edition © Pearson Education Limited 2004