Global business midterm- Ch 4

Philosophies of Business Ethics

*look at screen shot*

Four common Straw men approaches

1.Friedman Doctrine 2.Cultural Relativist 3.Righteous Moralist 4.Naive Immoralist All of these approaches are inappropriate approaches to ethical decision making

Fostering ethical behavior

1.Hire and promote people with a well- grounded sense of personal ethics •refrain from promoting individuals who have acted unethically 2.Build an organizational culture that places a high value on ethical behavior •articulate values that place a strong emphasis on ethical behavior •emphasize the importance of a code of ethics - formal statement of the ethical priorities a business adheres to 3.Put decision-making processes in place that require people to consider the ethical dimensions of business decisions •decisions fall within the accepted standards of the organizational 4.Institute ethics officers to ensure •all employees are trained in ethics •ethics is considered in the decision-making process •the company's code of conduct is followed 5.Develop moral courage •gives an employee the strength to say no to a superior who instructs her to pursue actions that are unethical 6.Make corporate social responsibility a cornerstone enterprise policy •Power can be used in a positive way to increase social welfare, which is ethical, or used in a manner that is ethically and morally suspect.

Approaches to ethics

1.Utilitarian Ethics 2.Kantian Ethics 3.Rights Theories 4.Justice Theories

What are ethical dilemmas?

A situation in which a difficult choice has to be made between two courses of action, either of which entails transgressing a moral principle. •real-world decisions are complex, difficult to frame, and involve consequences that are difficult to quantify •Tradeoffs exist as part of the decision

What is ethics?

Ethics - accepted principles of right or wrong that govern: •the conduct of a person •the members of a profession •the actions of an organization •Ethical behavior - Acting in ways consistent with what society and individuals typically think are good values •Business ethics - accepted principles of right or wrong governing the conduct of business people •Ethical strategy - is a strategy or course of action that does not violate these accepted principles

Ethical issues

Many of the ethical issues and dilemmas in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly between different cultures and different nations •What is considered normal practice in one culture may be considered unethical in others. •Managers in a multinational firm need to be particularly sensitive to these differences and able to choose the ethical action.

the most corrupted industry sectors

The most corrupt industry sectors •Extraction (mining, oil & gas, logging, etc.) •Construction (building) •Transportation (highways, bridges, railroads, airports, etc.) •IT (Information and Telecommunications)

Approaches to ethics: Justice theories

ØJustice theories focus on the attainment of a just distribution of economic goods and services Øa just distribution is one that is considered fair and equitable ØJohn Rawls argued that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage Two fundamental principles of justice ØEach person be permitted the maximum amount of basic liberty compatible with a similar liberty for others ØOnce equal basic liberty is ensured, inequality in basic social goods - such as wealth and opportunities - is to be allowed only if such inequalities benefit everyone

Approaches to ethics: Utilitarian ethics

•David Hume, Jeremy Bentham, John Stuart Mill •the moral worth of actions or practices is determined by their consequences •actions are desirable if they lead to the best possible balance of good consequences over bad consequences •Limitations: •it is difficult to measure the benefits, costs, and risks of an action •the approach fails to consider justice

Approaches to ethics: Kantian ethics

•Immanuel Kant •people should be treated as ends and never purely as means to the ends of others •people have dignity and need to be respected •people are not machines

Levels of morality: Lawrence Kholberg

•Kholberg proposed that each person makes ethical decisions according to three levels of moral development. Each level contains two stages. • Different people go through the different stages of moral development at different rates. 1.Level 1: Preconventional morality 2.Level 2: Conventional morality 3.Level 3: Postconventional morality

Conventional morality

•Morality is characterized by group conformity and allegiance to authorotiy •The individual acts in order to meet the expectations of others •Stage 3: The approval of others is the major determinant of behavior •Stage 4: Compliance with authority and upholding social order are primary ethical concerns

Implementing right ethics

•My right to freedom from physical harm imposes on others a duty not to physically harm me •My right to free speech imposes on others a duty not to prevent me from speaking Ex. Chronic plastics inc. In 2013 and 2014, 103 shipping containers were transported from Vancouver to Manila. It was declared to contain recyclable plastic, but the Bureau of Customs found instead "household trash, plastic bottles and bags, newspapers, and used adult diapers" The obligation rests not only on the shoulders of one moral agent, but on the shoulders of all moral agents whose actions might harm or contribute to the hard of the workers and the residents (in this case, the Canadian company, the Pilipino importer, the governments of Canada & Philippines)

Approaches to ethics: Rights theories

•Rights theories - human beings have fundamental rights and privileges which transcend national boundaries and cultures •Rights establish a minimum level of morally acceptable behavior •Moral theorists argue that fundamental human rights form the basis for the moral compass that managers should navigate by when making decisions which have an ethical component. Managers should not pursue actions that violate these rights •Examples of rights: Legal rights, mobility rights, fundamental freedom etc.

Legislation and rights ethics

•The Canadian Charter of Rights and Freedom (1982) •The Universal Declaration of Human Rights (1948) - basic principles that should always be adhered to irrespective of the culture in which one is doing business

Preconventional Morality

•The individual is aware of cultural prescriptions of right and wrong. •Response is based on: •Will I be harmed (punishment) •Will I be helped (pleasure) •Stage 1: Avoidance of punishment and deference to power •Stage 2: Individual needs are the primary motives and personal pleasure dictates the rightness or wrongness of behavior

Postconventional morality *Look at the document on Kholberg's levels of morality for the midterm

•The most advanced level of moral development •The individual is concerned with right and wrong conduct over and above self-interest, the views of others and without regard for authority figures. •Ethical judgements are based on self-defined moral principles •Stage 5: Social ethics are based on rational analysis, community discussion and mutual consent •Stage 6: what is right and good is viewed as a matter of individual conscience, free choice and personal responsibility for the consequences • •*Look at the document on Kholberg's levels of morality for the midterm*

The strawmen approaches to business ethics

•The phrase 'straw man argument' is a phrase used to describe an argument that will not stand up to scrutiny - a false argument •In arguments, this straw man phrase is used when people want to make a point, but it is a weak point and not likely to be convincing or stand up to scrutiny. •Straw man approaches to business ethics are raised by business ethics scholars primarily to demonstrate that they offer inappropriate guidelines for ethical decision making in a multinational enterprise

Four common Straw men approaches: Righteous moralist

•a multinational's home country standards of ethics should be followed in foreign countries

Four common Straw men approaches: Cultural relativism

•ethics are culturally determined and firms should adopt the ethics of the cultures in which they operate •"when in Rome, do as the Romans" •Grease payment is a form of acknowledgment for the differences in moral standards among countries

Four common Straw men approaches: Naive immoralist

•if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either •'everyone else is doing it.....'

Four common Straw men approaches: Freidman doctrine

•the only social responsibility of business is to increase profits, so long as the company stays within the rules of law