Ch5 Ethics in international business

The righteous moralist

According to ________, a company's home-country standards of ethics are the appropriate ones to follow in foreign countries.

All of the following except ____ contribute to unethical behavior by international managers. a) Decision-making processes b) Leadership c) Personal ethics d) National culture

National culture

________ recognize that human beings have fundamental rights and privileges which transcend national boundaries and cultures.

Rights theories

Decision-Making Process: Managers can also use a five step process to think through ethical problems:

Step1: Managers identify which stakeholders Step 2: Managers determine whether a proposed decision would violate the fundamental rights of any stakeholders Step 3: Managers establish moral intent

Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

adopted by the Organization for Economic Cooperation and Development (OECD), obliges member states to make the bribery of foreign public officials a criminal offense

Righteous moralist

approach claims that a multinationals home country standards of ethics should be followed in foreign countries

Utilitarian

approaches to ethics hold that the moral worth of actions or practices is determined by their consequences

Ethical dilemmas

are situations in which none of the available alternatives seems ethically acceptable

Cultural relativism

argues that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate, or in other words, when in Rome, do as the Romans do

naïve immoralist

asserts that 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

Kantian ethics

based on the philosophy of Immanuel Kant who argued that people should be treated as ends and never purely as means to the ends of others

Justice theories

focus on the attainment of a just distribution of economic goods and services

Tragedy of the commons

occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation

Foreign Corrupt Practices Act

outlawed the practice of paying bribes to foreign government officials in order to gain business

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

Organization culture

refers to the values and norms that are shared among employees of an organization

Universal Declaration of Human Rights

specifies the basic principles that should always be adhered to irrespective of the culture in which one is doing business

Friedman doctrine

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

Business ethics

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

moral intent

the business must resolves to place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated Step 4: The company engages in ethical behavior Step 5: The business audits its decisions, reviewing them to make sure that they were consistent with ethical principles

According to ________, a company's home-country standards of ethics are the appropriate ones to follow in foreign countries. a) the righteous moralist b) the naïve immoralist c) the Friedman doctrine d) cultural relativism

the righteous moralist

The _____ suggests that everyone is imagined to be ignorant of all his or her particular characteristics.

veil of ignorance

Decision-Making Process: To determine if a decision is ethical, managers can ask:

• Does my decision fall within the accepted values of standards that typically apply in the organizational environment? • Am I willing to see the decision communicated to all stakeholders affected by it? • Would the people with whom I have significant personal relationships approve of the decision?

The most common ethical issues in business involve

• employment practices • human rights • environmental regulations • corruption • the moral obligation of multinational companies

Moral courage

• enables managers to walk away from a decision that is profitable, but unethical • gives an employee the strength to say no to a superior who instructs her to pursue actions that are unethical • gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company • does not come easily and employees have lost their jobs when acting on this courage

Ethical Decision Making: To ensure ethical issues are considered in business decisions, firms should:

• favor hiring and promoting people with a well grounded sense of personal ethics • build an organizational culture that places a high value on ethical behavior • makes 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 • put decision making processes in place that require people to consider the ethical dimension of business decisions • develop moral courage

Personal ethics

(the generally accepted principles of right and wrong governing the conduct of individuals) influence business ethics

What is a company's formal statement of ethical priorities called?

Code of ethics

code of ethics

a formal statement of the ethical priorities a business adheres to

Which is not an area where multinational firms are concerned about ethics? a) Human rights b) Trade regulations c) Environmental regulations d) Corruption

Trade regulations

Organizational culture

can legitimize unethical behavior or reinforce the need for ethical behavior

Social responsibility

efers 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

Leaders

help to establish the culture of an organization, and set the example that others follow

If work conditions in a host nation are clearly inferior to those in a multinationals home nation, should companies apply:

home country standards,host country standards,something in between

Rights theories

human beings have fundamental rights and privileges which transcend national boundaries and cultures

Ethical strategy

is a strategy, or course of action, that does not violate these accepted principles

just distribution

is considered fair and equitable