Transcript Business Ethics in an International Context

Philosophy 223
International Business Ethics:
Relativism, Universalism and Rights
Sweatshops or Developing
Capitalism?
 In an increasingly global
economic system, it is
inevitable that
engineering managers
are going to be
confronted by moral
dilemmas produced by
differing political,
cultural and economic
contexts.
Two Types of Dilemmas
 One problem typically
faced by managers in an
international context
arises from differences
in regulatory, cultural
or economic standards.
 Another common
problem arises through
technology transfers to
Lesser Industrialized
Countries (LICs).
Different Standards?
 The first type of dilemma is exemplified by
the sweatshop.
 The sort of labor practices common in many
developing countries (long hours, young
workers, unsafe conditions, low pay) have
been common to all developed economies
at some point in their history.
 What is the responsibility of managers from
developed economies when confronted with
these conditions in their host countries?
Risky Technologies?
 The second type of dilemma is most infamously
exemplified by the catastrophic release of 27 tons of
methyl isocyanate gas from the Union Carbide plant in
Bhopal, India.
 The plant never operated at full capacity and was
staffed and maintained by workers with little
understanding of the chemicals they were handling and
no appreciation for the importance of the limited safety
measures that were in place.
 What is the responsibility of managers from countries
with higher levels of technological development when
transferring these technologies to countries with lower
levels?
False Solutions
 Two responses to these
dilemmas that fall
short:
 One is to always assume
the superiority of your
own context.
 The other is to always
conform to the ethos of
the host country
 “When in Rome”
Bowie, “Relativism and the Moral
Obligations of Multinational Corporations”
 Bowie distinguishes between
descriptive and normative ethical
relativism and criticizes both sets of
views.
 He goes on to defend a basic morality
necessary for market transactions.
Cultural Relativism
 Cultural relativism is the descriptive claim
that ethical practices differ among cultures.
 Problems
 Different practices do not necessarily imply
different underlying moral principles.
 There are universal principles accepted by all
cultures, such as prohibitions against torture
and genocide.
 There are international treaties and
conventions that codify basic moral norms.
Ethical Relativism
 Ethical relativism is the normative claim that
what is really right or wrong is what a culture
says is right or wrong.
 Problems
 The mere fact that a culture believes a practice is
correct does not make it correct.
 It is inconsistent with the concept of a moral
reformer, someone who argues against the views of
the majority based on ethical principles.
 The strongest argument against ethical relativism
would be to defend universal moral norms (see next
essay by Arnold).
Some Other Considerations
 There is no clearly agreed upon understanding
of “cultural.”
 There seem to be basic moral norms that every
society must adapt, such as don’t kill or steal.
 There is an implicit morality of the
marketplace that is often ignored.
 There are Kantian foundations for moral prohibitions
against lying and cheating.
 Multinationals are obligated to follow these minimum
ethical norms.
Arnold, “The Human Rights Obligations
of Multinational Corporations”
 Arnold defends a Kantian view of human
rights obligations of corporations and
defends that view against criticism. He also
criticizes one recent effort by the United
Nations to identify the human rights
obligations of corporations.
 Human rights are different from legal rights
in that they do not depend upon state
sanction for their legitimacy.
The United Nations and Human
Rights
 The Universal Declaration of Human Rights
(1948) is aimed at states, not corporations.
 Draft Norms on the Responsibilities of
Corporations and Other Business Enterprises
with Respect to Human Rights (2003) is aimed
at corporations.
 Problems:
 They are too wide and imprecise;
 They fail to distinguish between basic obligations and those
actions that are good to perform but not mandatory.
Basic Obligations = Basic Rights
 Basic rights: “moral rights that apply to all
persons in all nations, regardless of whether
the nation in which a person resides
acknowledges and protects those rights”
(585c1-2).
 Are inalienable.
 Are attributable to persons (not only biological
humans).
 A Kantian basis for rights: Always treat others
as an end, and never as a means only.
 Entails negative duties such as avoiding physical force or
coercion.
 Entails positive obligations like ensuring positive wellbeing.
Which Rights are Basic?
 Freedom: Individuals should be free to as much freedom as is
compatible with a like freedom for all.
 The right to physical security and freedom of movement.
 The right to non-discrimination on the basis of arbitrary
characteristics such as race, sex, religion, ethnicity, and
sexual orientation.
 The right to freedom of association and collective bargaining.
 The right to fair treatment.
 The right to subsistence
 The right to develop basic human capabilities.
Western Imperialism?
 Human rights are not merely a
Western concept.
 There are diverse Asian societies, like
India, which embrace human rights
language and arguments.
 Even if all Asian nations denied the
validity of human rights arguments,
this would not entail that they were
correct.
Werhane, “Exporting Mental Models:
Global Capitalism in the 21st Century”
 Werhane argues for caution in extending
Western style capitalism abroad. She
provides several examples whereby the
unreflective extension of Western style
capitalism led to bad outcomes.
 Mental models are mental representations,
cognitive frames, or mental pictures that
frame and organize human experience.
Framing Private Property
 The mental model of private property,
minimal regulations, and free trade is being
exported by the U.S. as if it will always be
of benefit. But this is not so.
 Example of Luzon rice farmers.
 Example of Mexican farmers
 Example of W.R. Grace’s development of
Neemix
 Example of Solar Electric Light Fund in China
and South Africa
The Lesson?
 The lesson here is that American mental models
of property and free enterprise cannot be
uniformly and unreflectively exported without
producing negative consequences.
 Everyone can agree that abolishing poverty is a
good thing, but we need to be cautious
regarding our assumptions about how to do so.
 We need to keep in mind that what matters most to many
people are social relationships, family, religious and
community traditions, and local values regarding social
goods.
 Economic development schemes that fail to recognize this
will often fail.
 It is in the best interest of corporations to tread lightly, as
developing countries represent 80% of the world’s
population.
A Good Example
 Unilever is an example of a company
that has adapted its mental models to
meet the diverse needs of communities
throughout the developing world.
 “Triple Bottom Line:” expands the
definition of success to include
measurement of “economic, ecological,
and community assets, liabilities, profits
and losses” (595c2).