international business ethics
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International Business Ethics. BMJN 5402. Why International Business?. Given the difference in cultural values, which ethics to follow?. Ethical Issue & Relativism. Some Alternatives. Some Alternatives. None is perfectly acceptable. Other Alternatives. - PowerPoint PPT PresentationTRANSCRIPT
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International Business Ethics
BMJN 5402
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Why International Business?
Economic growth from more free & open trade : thought to be most effective to improve well being of impoverished people
Economic integration prevents wars
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Ethical Issue & RelativismBusiness must often choose between obeying home country or following local rules
• Diverse culture diverse ethical value• Ethical principles vs. application• Virtue of integrity
Cultures have different values does not imply ethical relativism
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Some AlternativesConforming with local values extreme ethical relativism
Moral rigorism extreme attachment to home countries’ values
Naïve immoralism
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Some AlternativesConforming with local values extreme ethical relativism
Moral rigorism extreme attachment to home countries’ values
Naïve immoralism
None is perfectly acceptable
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Other Alternatives
The Sullivan Principles
• Conforming to local values as long as it does not violate general ethics• Lobbying local regulators to eliminate unethical regulations
Lobby for establishment of inter-country agreements for “moral minimum” to operate in every countries
• Example : Montreal Protocol, Kyoto Agreement
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Cross Cultural Values & International Rights
Minimalist approach meeting minimal moral rights
Maximalist approach MNCs are responsible to provide benefit &
support for communities
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Universal Rights (Donaldson)Freedom of physical movementOwnership of propertyFreedom from tortureFair trialNondiscriminatory treatmentPhysical securityFreedom of speech & associationMinimal educationPolitical participationSubsistence
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Cross-Cultural Ethical Guidelines (De George)Do no intentional direct harm
Produce more good than harm for host country
Contribute by their activity to host country’s development
Respect human rights of employees
Respect local culture & work with and not against it
Pay their share of taxesCooperate with local govn’t in developing & enforcing just background institutionsRecognize that majority control of a firm carries with it the ethical responsibility for actions & failures of the firmMake sure that hazardous plants are safe & run safelyEnsure proper re-designing of hazardous technology for transfer to less developed country
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International Issues in BriberyUS Foreign Corrupt Practices Act (1977)
• Forbid US companies to pay bribes outside US• Amended in 1988 to allow facilitating payment
Why is bribery unethical?
• Promote unfair competition• Compensation for those who do not deserve• Unfair allocation• Promote other unethical and illegal act
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Issues in International Biz
• Low wages• Outsourcing
Extortion & exploitation of workers in poorer countries
• Effort to lobby for deregulation
Race to the Bottom
• MNCs replacing legitimate government• Cultural homogenization threatens local culture &
traditions
Compromising democracy, cultural integrity & human right
Dumping
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Defining Fair Wages
1 •Does not mean the same with wages of labors in MNC’s home countries
2 •Means that MNC must pay the similar responsibilities to employees at host countries with those in home countries
3 •Use of economic indicator (i.e. GDP, inflation rate) to define fair wages•Other approach : comparing labors’ quality of life
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DumpingSell products below the market price or even production cost
• Against free market ethics
Why unethical?
“Against dumping” policy can’t be used to protect local market
• Unfair wages• Exclusion of depreciation
Dumping includes :
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Thank You