Introduction to International Business-Ch 5

What is the tragedy of the commons occur when a resource is held in common by all?

When a resource is owned by no one, it is overused by individuals, resulting in its degradation

Justice theories focus on what?

on the attainment of a just distribution of economic goods and services -fair and equitable

What is the second step on ways for managers to make ethical decisions?

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 -implement a system of incentives and rewards that recognize people who engage in ethical behavior and sanction those who do not

What are 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

What is the third step on ways for managers to make ethical decisions?

Make sure that leaders within the business articulate that rhetoric of ethical behavior and act in a manner that is consistent with that rhetoric -give life and meaning to words -make sure that leaders emphasize the importance of ethics verbally and through their actions

What is the fourth step on ways for managers to make ethical decisions?

Put decision making processes in place that require people to consider the ethical dimensions of business decision -Decisions fall within the accepted values of standards that typically apply in the organizational environment -decisions can be communicated -if colleagues would approve of decisions

What is social responsibility?

Refers to the idea that managers should consider the social consequences of economic actions when making business decisions -there should be a presumption in favor of decisions that have both good economic and good social consequences --> it is the right way for a business to behave

What are the decision-making processes?

The values and norms that are shared among employees of an organization -organization values that does not emphasize

How do straw men approach to business ethics?

They deny the value of business ethics or apply the concept in an unsatisfactory way

What is societal culture?

Firms headquartered in cultures where individualism and uncertainty avoidance are strong are more likely to stress ethical behavior than firm headquartered in cultures where masculinity and power distance rank high

Advocates argue that businesses need to recognize their noblesse oblige-honorable and benevolent behavior that is responsibility of successful companies

Give something back to societies that have made their success possible

What is leadership?

Helps establish the culture of an organization and set the examples that other follow

What is the first step on ways for managers to make ethical decisions?

Hire and promote people with a well-grounded sense of personal ethics -refrain from promoting individuals who have acted unethically -try to hire only people with strong ethics -prospective employees should find out as much as they can about the ethical climate in an organization prior to taking a position

What are the rights theories?

Human beings have fundamental rights and privileges which transcend national boundaries and cultures -establish a minimum level of morally acceptable behavior - the universal declaration of human rights-basic principles that should always be adhered to irrespective of the culture in which one is doing business

Is it ethical for companies to do business with countries with repressive regimes?

Myanmar Nigeria

The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was adopted by the Organization for Economic Cooperation and Development (OECD)

Obliges member states to make the bribery of foreign public officials a criminal offense

What are personal ethics?

The generally accepted principles of right and wrong governing the conduct of individuals -expatriates may face pressure to violate their personal ethics because they are away from their ordinary social context and supporting culture -managers fail to question whether a decision or action is ethical and instead rely on economic analysis when making decisions

Moral theorists argue that fundamental human rights form the basis for what?

The moral compass that managers should navigate by when making decisions which have an ethical component

The US Foreign Corrupt Practices Act outlaw what?

They outlaw the practice of paying bribes to foreign government official facilitating payments

John Rawls argued that all economic goods and services should be?

distributed equally except when an unequal distribution would work to everyone's advantage -impartiality is guaranteed by the veil of ignorance-everyone is imagined to be ignorant of all his or her particular characteristics

What's the organization culture?

organization culture can legitimize unethical behavior or reinforce the need for ethical behavior

What are 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 -it is difficult to measure the benefits, costs, and risks of an action -the approach fails to consider justice

Is it permissible for multinationals to pay governments if doing so creates local income and jobs?

Depends on the firm

What is the fifth step on ways a manager can make ethical decisions?

Develop moral courage -enables managers to walk away from a decision that is profitable, but unethical -gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company

What are unrealistic performance expectations?

Encourage managers to cut corners or act in an unethical manner

What are business ethics?

Accepted principles of right or wrong governing the conduct of business people

How do others approach business ethics?

Are favored by moral philosophers and are the basis for current models of ethical behavior

What are the four common straw men approaches?

1) Friedman Doctrine-the only social responsibility of business is to increase profits, so long as the company stays within the rules of law 2) Cultural relativism-ethics are culturally determined and firms should adopt the ethics of the cultures in which they operate 3) Righteous moralist- a multinational's home country standards of ethics should be followed in foreign countries 4) 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 -all approaches offer inappropriate guidelines for ethical decision making

Managers can also use a five-step process to think through ethical

1) Identify which stakeholders (the individuals or groups who have an interest, stake, or claim in the actions and overall performance of a company) a decision would affect and in what ways -Internal stakeholders are people who wok for or who own the business such as employees, the board of directors, and stakeholders -external stakeholders are the individuals or groups who have some claim on a firm such as customers, suppliers and unions 2) Determine whether a proposed decision would violate the fundamental rights of any stakeholders 3) Establish moral intent-place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated 4) Engage in ethical behavior 5)Audit decisions and review them to make sure that they are consistent with ethical principles -this step is often overlooked even though it is critical to finding out whether a decision process is working

Many firms now have ethics officers to ensure what?

1) all employees are trained ethics 2) ethics is considered in the decision-making process 3) the company's code of conduct is followed

What are the most common ethical issues in business involve?

1) employment practices 2) human rights 3) environmental pollution 4) corruption 5) moral obligations of multinational companies

Firms should do what to have ethical employment practices?

1) establish minimal acceptable standards that safeguard the basic rights and dignity of employees 2)audit foreign subsidiaries and subcontractors regularly to ensure they are meeting the standards 3) take corrective actions as necessary

What are the basic human rights that are taken for granted in developed countries?

1) freedom of association 2) freedom of speech 3) freedom of assembly 4) freedom of movement

How are ethics relevant to employment practices?

1) suppose work conditions in a host nation are clearly inferior to those in the multinational's home nation 2) which standards should apply? -home country standards -host country standards -something in between

What are several factors contributed to unethical behavior?

1)Personal ethics 2) Decision-making processes 3) Organization culture 4) Unrealistic performance expectations 5) Leadership 6) Societal culture

What is ethics?

Accepted principles o right or wrong that govern - conduct of a person -members of a profession -actions of an organization

Does multinational investment actually help bring change to these countries and ultimately improve the rights of citizens?

China

What are ethical dilemmas?

Situations in which non of the available alternatives seem ethically acceptable -real world decisions are complex, difficult to frame, and involve consequences that are difficult to quantify -the ethical obligations of an MNE toward employment conditions, human rights, corruption, environmental pollution, and the use of power are not always clear cut

What is ethical strategy?

Strategy or course of action, that does not violate these accepted principles