Ethical Theory and Moral Practice (Photo credit: Wikipedia)
Ethics in International Business
Learning objectives
*Understand the ethical issues faced by international businesses.
*Recognize an ethical dilemma.
*Identify the causes of unethical behavior by managers.
*Describe the different philosophical approaches to ethics.
*Explain how managers can incorporate ethical considerations into their decision making.
Ethics becomes an issue across nations because of differing political systems, economic systems, legal systems and cultural values. Acceptable behavior in one ation may be considered unethical behavior in another nation. Ethical issues may arise in international business in the following areas: employment practices, human rights, environmental pollution, corruption, and moral obligations are explored.
The opening case explores the substandard working conditions in a Chinese factory that supplies, directly and indirectly well-known computer companies including Dell, Lenovo, and Microsoft. The closing case explores the efforts of Knights Apparel to establish a successful factory using a “fair labor” model.
“Ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.” Ethical Issues in International Business involve: human rights, environmental regulations, corruption and the moral obligation of multinational companies.
The Carnegie Council on Ethics and International Affairs maintains a very substantive and thought-provoking website at {http://www.cceia.org/}. This site contains publications that comment on many of the ethical issues that surround globalization and international business.
Employment Practices often differ among nations. What do you think that the MNC’s ethical obligations involve? Should home standards be followed, even in less developed countries? Should local standards be embraced? What is the right basis for employment-related ethical decisions?
1. Human Rights issues vary considerably across national borders. How can the tensions that this reality fosters be reconciled? Think about what is going on with ISIS today.
2. Environmental Pollution and ethical issues involving environmental regulations in host nations are far inferior to those in the home nation.
Consumers International {http://www.consumersinternational.org/} is dedicated to protecting the rights of consumers worldwide. In doing so, it promotes ethical behavior on the part of companies. Go to the site and explore some of the organization’s current efforts.
3. Corruption is dealt with in the U.S. Foreign Corrupt Practices Act . It outlawed the practice of paying bribes to foreign government officials in order to gain business.
4. Moral Obligations and “Social Responsibility refers to the idea that business people should take the social consequences of economic actions into account when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and good social consequences.”
5. Ethical Dilemmas are situations in which none of the available alternatives seems ethically acceptable.
6. ”The ethical obligations of a multinational corporation toward employment conditions, human rights, corruption, environmental pollution, and the use of power are not always clear cut.”
7. The roots causes of Unethical Behavior include: personal ethics, Decision-making processes, Leadership, Unrealistic performance expectations and Organizational culture. “Business ethics reflect personal ethics (the generally accepted principles of right and wrong governing the conduct of individuals). The personal ethical code that guides our behavior comes from a number of sources, including our parents, our schools, our religion, and the media. Home country managers working abroad in multinational firms may experience more than the usual degree of pressure to violate their personal ethics because they are away from their ordinary social context and supporting culture, and they are psychologically and geographically distant from the parent company.” Some companies have an organizational culture that de-emphasizes business ethics; most decisions are purely economic. Unrealistic performance goals in these organizations are attained by “cutting corners or acting in an unethical manner.”
8. Organizational Leadership establishes and maintains the organization’s culture. If leaders are behaving unethically, employees may not act ethically.
9. Justice Theories ”focus on the attainment of a just distribution of economic goods and services. A just distribution is one that is considered fair and equitable. There is no one theory of justice, and several theories of justice conflict with each other in important ways. One important and influential theory of justice was set forth by John Rawls who argued that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage.”
10. To foster ethical behavior, businesses need to build an organization culture that places a high value on ethical behavior. According to your text, Ethical Decision Making involves the Following 5 things:
(1) favor hiring and promoting people with a well grounded sense of personal ethics
(2) build an organizational culture that places a high value on ethical behavior
(3) make sure that leaders within the business not only articulate the rhetoric of ethical behavior, but also act in manner that is consistent with that rhetoric
(4) put decision making processes in place that require people to consider the ethical dimension of business decisions
(5) develop moral courage
To ensure ethical behavior in a business, a number of firms now have ethics officers.
Business Ethics Quarterly (Photo credit: Wikipedia)
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