Chapter 5

OECD

Organization for Economic Cooperation and Development - obliges member states to make the bribery of foreign public officials a criminal offense

3. Righteous moralist

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

Business ethics

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

John Rawls argued

all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage - "veil of ignorance" everyone is imagined to be ignorant of all his or her particular characteristics

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

Ethical dilemmas

situations in which none of the available alternatives seems ethically acceptable

Justice theories

the attainment of a just distribution of economic goods and services - a "just distribution" is one that is considered fair and equitable

Social responsibility

the idea that managers should consider the social consequences of economic actions when making business decisions

1. Friedman doctrine

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

Foreign Corrupt Practices Act outlawed ?

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

Utilitarian ethics

(David Hume, Jeremy Bentham, John Stuart Mill) - the moral worth of actions or practices is determined by their consequences

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

factors contributing to unethical behavior

- Personal Ethics - Decision-making processes - Organization culture - realistic performance expectations - Leadership - Societal culture

The most common ethical issues in business involve

- employment practices - human rights - environmental pollution - corruption - moral obligations of multinational - companies

How Can Managers Make Ethical Decisions?

1. Hire and promote people with a well- grounded sense of personal ethics 2. Build an organizational culture that places a high value on ethical behavior - codes of ethics 3. Make sure that leaders within the business articulate the rhetoric of ethical behavior and act in a manner that is consistent with that rhetoric - give life & meaning to words 4. Put decision-making processes in place that require people to consider the ethical dimensions of business decisions

Straw men approach (4)

denies the value of business ethics or apply the concept in an unsatisfactory way (all approaches offer inappropriate guidelines for ethical decision making)

2. Cultural relativism

ethics are culturally determined and firms should adopt the ethics of the cultures in which they operate

fundamental human rights

form a basis for the "moral compass"

noblesse oblige

honorable and benevolent behavior that is the responsibility of successful companies

4. Naïve 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