Chapter 5 global

Ethical dilemmas and Multinationals:

Ethical Dilemma: a situation in which none of the available alternatives seems ethically acceptable. ex: gifts, acceptance and nonacceptance are both problematic. Also example: a 12 year old girl works at a Chinese factory. The U.S instructs the local manager to replace her with an adult. they do, the girl is a jobless orphan who then becomes a prostitute for money. she dies 2 years later of AIDS. Real world decisions are complex and difficult to frame from another country who doesn't know the exact situation.

multinationals and corruption:

Is it ethical to make payments to foreign government officials to secure business? The OECD's convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member states to make briber of foreign public officials a criminal offense. The Lockheed case where Lockheed made a 12.6 million dollar payment to Japanese agents and officials to secure a large order for Lockheed's Tristar jet from Nippon Air led to the Foreign Corrupt Practices Act of 1977.

Naïve Immoralist-

" do as other nations do. if other countries aren't following ethical norms in a host nation, you don't either"

The Friedman Doctrine-

"the only responsibility of a firm is to make a profit without breaking the rules. Improving working conditions beyond the level required by the law will just reduce profits".

Righteous Moralist-

"use home country standard when operating in a foreign country"

Cultural Relativism-

"when in Rome, do as the Romans". the belief that ethics are nothing more than the reflection of a culture, and a firm should adopt the ethics of the culture in which it is operating.

In the international business setting, the most common ethical issues involve ....

- -human rights -environmental pollution -corruption -ethical dillemmas All of multinational corporations

Determinants of Ethical Behavior:

- societal culture -decision making process -personal ethics - organization culture -leadership -performance goals

How to cope with ethical behavior in a business:

-run background checks, use references, and check social media. -establish a code of ethics (formal statement of the ethical priorities a business adheres to). -look at the stakeholders' interests and how an action affects them(people who have an interest, stake or claim in the actions and overall performance of a company) -Moral courage: enables you to walk away from a profitable but unethical decision, say no. -corporate social responsibility-make decisions that have both good economical and good social consequences. Sustainability-value of public statements

Ethical behavior is worse in what types of cultures?

Masculine cultures, High power distance cultures, and low individualism cultures.

what are the 4 different approaches to ethics known as Straw Men?

These approaches can be characterized as -the Friedman Doctrine -Cultural Relativism -The Righteous Moralist -The Naïve Immoralist All have benefits and all have negatives.

Utilitarian and Kantian Ethic approach-

Utilitarian approach-an action is desirable if the positive outcomes outweigh the negative consequences. Greatest good for greatest number. Kantian Ethics-People are not machines or ends, that are people.

Business Ethics-

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

The case about the corruption of Daimler's Chrysler's cash desk:

the investigation uncovered hundreds of bribes in at least 22 countries that were linked to the sale of vehicles valued at $1.9 billion. Daimer manufacturer had to pay 185 billion in criminal and civil fines.

difference principle-

the notion that differential treatment is okay if it benefits the poorest member of society.

Justice Theories:

focus on the attainment of just distribution (one that is considered fair and equitable) of economic good and services. John Rawls- all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage. Rawls says we tend to evaluate situations based on our life and situation. he says you need a "Veil of Ignorance" that puts your knowledge of position in the world aside, and then ask yourself "what would you do?"

Ethical Strategy-

A course of action that does not violate a company's business ethics.

multinationals and pollution:

When environmental laws are less strict in the host nation than they are in the home nation, should the multinational allow pollution to happen? the 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. There is a global tragedy of the commons, by moving production to locations where there are no restrictions to dump their wastes or toxins into oceans or common areas. Although global concerns and many argue it is against basic ethical principles, the tragedy of the commons still occurs. this multinational pollution still occurs.

Ethical issues occur every day because...

business practices and regulations differ, and values differ. and because there is a strong incentive to maximize profit and to please the boss.

What are the Sullivan Principles and who made them? (violation of human rights of a multi national corporation).

named after Leon Sullivan, a black Baptist minister and member of GM's board of directors. stated that GM could operate in South Africa under two conditions: 1. the company should not obey the apartheid laws (racial segregation laws) in its own south African operations (a form of passive resistance). and 2. the company should do everything within its power to promote the abolition of apartheid laws. These laws were widely adopted by U.S. firms operating in South Africa. But the South African government ignored this violation. Sullivan concluded that simply following his principles was not sufficient to break down the apartheid regime. GM left S. Africa and was followed by many other major firms to boycott the apartheid.

Right theories-

recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures. Universal Declaration of Human Rights of the UN in 1948 lays down the basic principles of human rights that should be adhered to.