Transcript Globalization and Society

International
Business
Environments & Operations
15e
Daniels
●
Radebaugh
●
Copyright © 2015 Pearson Education, Inc.
Sullivan
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Chapter 11
Globalization
and Society
Copyright © 2015 Pearson Education, Inc.
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Learning Objectives
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Examine the broad foundations of ethical
behavior
Demonstrate the cultural and legal foundations of
ethical behavior
Discuss the importance of social responsibility
when operating internationally, especially in the
areas of sustainability
Discuss key issues in the social activities and
consequences of globalized business
Examine corporate responses to globalization in
the form of codes of conduct, among other things
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Foundations of Ethical Behavior
Individuals and companies must behave
responsibly, based on certain ethical codes
of conduct (what is right or wrong)
 Our moral reasoning guiding our decisions
and actions can be….
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Teleological-decisions are based on the
consequences of the action
 Utilitarianism-an action is right if produces
greatest amount of good
 Deontological-moral reasoning occurs per se,
independently, consequence is not an issue
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Cultural Foundations of Ethical
Behavior
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Cultural relativism holds that ethical truths
depend upon the groups subscribing to them;
thus, intervention by outsiders is unethical.
Cultural normativism holds that there are
universal standards of behavior that all cultures
should follow
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Legal Foundations of Ethical Behavior
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Law is a good basis for ethical behavior. It is an
embodiment of local cultural values. But
everything that is legal is not necessarily ethical.
Why and when the laws of the land can be
perceived as inadequate? Arguments for and
against.
 Definition-moral concepts may not defined
properly
 Time-it takes time to develop a law
 Application-how court interprets law
 Bias-could be majority biased
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Extraterritoriality
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Extraterritoriality
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imposing domestic legal and ethical practices
on the foreign subsidiaries of companies
headquartered in their jurisdictions
Foreign Corrupt Practices Act 1977
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Corruption and Bribery
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Corruption
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Bribes
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the misuse of entrusted power for private gain
payments or promises to pay cash or anything
of value. Occurs to obtain government
contracts or to get public officials to do what
they should be doing anyway
Impact of corruption on economic
development, wellbeing of the people,
business performance
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Corruption and Bribery
Where Bribes Are (and Are Not) Business As Usual
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Corruption and Bribery
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International accords to stop bribery
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Regional initiatives include
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OECD Anti-Bribery Convention
ICC code of rules
UN Convention against Corruption
EU efforts
U.S. Foreign Corrupt Practices Act and
Sarbanes-Oxley legislation
Industry initiatives include
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2005 World Economic Forum zero tolerance
pact
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Ethics and Environment
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Companies compromise the environment
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Effect of natural resource extraction
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contamination of air, soil, or water during
manufacturing
producing products that emit fossil-fuel
contaminants
renewable versus non-renewable
Sustainability-meeting the needs of the
present without compromising the ability
of future generations to meet their own
needs
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Global Warming, Kyoto Protocol
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Kyoto Protocol (1997)
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signed to require countries to cut greenhouse
gas emissions to 5.2% below 1990 levels
between 2008 and 2012
Some countries have adopted stricter
requirements
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others have not ratified the agreement
including
 the U.S., China, India
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Ethical Dimensions of
Labor Conditions
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Labor issues include: Wages, Child labor, Working
conditions, Working hours, Freedom of
association
Child labor – ILO estimates 250 million children
aged 5–17 years work
Some companies avoid operating in countries
where child labor is common. IKEA has
responsible policies.
Some companies refuse to hire individuals who
want to work long hours.
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Corporate Codes of Ethics
How should a company behave?
 The UN Global Compact establishes
guidelines for appropriate behavior in
human rights
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labor
the environment
anti-corruption
Social Media is playing a constructive role
in guiding the corporations
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The Pyramid of Corporate Social
Responsibility
Source: Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational
Stakeholders,” adaptation of Figure 3, p. 42. Reprinted from Business Horizons, July/Aug. 1991. Copyright © 1991 by the Foundation
for the School of Business at Indiana University. Reprinted with permission.
Motivations for
Corporate Responsibility
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Unethical and irresponsible behavior could
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result in legal sanctions
result in consumer boycotts
lower employee morale
cost sales because of bad publicity
A code of conduct
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sets global policy that must be complied with
communicates the code to employees,
suppliers, and subcontractors
ensures that policies are carried out
reports results to external stakeholders
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Chapter 11: Discussion Questions
1.
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Discuss the three approaches in moral
reasoning. Which appeals to you most and
why?
Define cultural relativism and normativism.
Explain how the concept can be used by the
multinationals in a foreign country.
What is corruption? What can we do to combat
corruption? Explain.
Discuss the legal and ethical dimension of
Corporate Social Responsibility in a globalized
world.
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