chapter 3
what is Corporate social responsibility (CSR)?
The actions of a firm to benefit society beyond the requirements of the law and the direct interests of the firm.
what is Ethics?
The study of morality and standards of conduct.
Any in addition to expectations that they adhere to specific ethical codes and principles, corporations are under increasing pressure to contribute to their societies and communities in which they operate into adopt more socially responsible business practices throughout their entire range of operations. Corporate social responsibility can be defined as the actions of a firm to benefit society beyond the requirements of the law and the direct interests of the firm. It is difficult to provide a list of obligations since the social, economic, and environmental expectations of each company will be based on the desires of the stakeholders. Pressure for greater attention to CSR has emanated from what?
a range of stakeholders including civil society which includes the broad, societal interests in a given region or country, and from non government organizations or NGOs. These groups have urged MNC's be more responsive to the range of social needs in developing countries, including concerns about working conditions in factories or service centers and the environmental impacts of their activities. The increased CSR efforts by businesses appear to be effective in increasing public opinion; More than 50% of global respondents to the 2019 Edelman survey expressed trust and business and NGO's despite general distrust in government and media.
Aristotellian virtue ethics focuses more on core, individual behaviors and actions and how they express and form individual character. They also consider social and institutional arrangements and practices in terms of their contribution to the formation of good character an individuals. A good, or virtuous, individual does what is right for the right reasons and derives satisfaction from such actions, why?
because his or her character is rightly formed. For Aristotle, moral success and failure largely come down to a matter of right desire, or appetite. But as soon as people become corrupted by pleasure or pain, the goal no longer appears as a motivating principle: he no longer sees that he should choose and act in every case for the sake of an because of this end. Survive tends to destroy the principle or initiating motive of action.
In addition, GE's flight management system for Boeing 737 planes has enabled airlines to lower fuel costs and reduce emissions. According to a GE eco imagination annual report, the FMS enables pilots to determine, while maintaining a highly efficient cruise altitude, the exact point where the throttle can be reduced to flight idle while allowing the aircraft to arrive precisely at the required runway approach point without the need for throttle increases. SAS Scandinavian airlines estimates that FMS will save the airline 10 million US dollars annually. According to CEO Jeffrey R. Immelt and vice president of ecomagination Steven M. Fludder, echo imagination is playing a role in what?
boosting economic recovery, supporting the jobs of the future, improving the environmental impact of our customers and our own operations, furthering energy independence, and fostering innovation and growth in profitable environmental solutions.
In the boardroom, the term sustainability used to first be associated with financial investments or the hope of steadily increasing profits but for companies today this term means the same to them as it does to an environmental conservationist. This is partially due to corporations recognizing that dwindling resources will eventually halt productivity, but increased pressures from consumers along with the World Economic Forum in Davos Switzerland have also played a part in what?
bringing awareness to this timely subject. In 2017 the World Economic Forum held its first annual sustainable development impact summit in New York to discuss the future of environmental sustainability, science and technology, and the challenges created by the speed of business growth period over 700 business leaders, entrepreneurs, NGOs, and government leaders attended.
doing the right thing is not always as simple as it appears. Some years back Levi Strauss experienced this issue when the company discovered that some of its Bangladesh suppliers were employing children under the age of 14. Although employing underage children did not violate the law in Bangladesh, it did go against the policy of Levi Strauss. Ultimately Levi Strauss decided that the right thing to do would be to continue paying the wages of the children but require them to attend school instead. The company also secured a position for them once they reached the age of 14. Body level of involvement is hard to standardize, having a basic set of business ethics and appropriately applying it to the culture in which one is managing is a step in the right direction. Managers need to be what?
cautious not to blur the lines of culture in these situations. As perhaps said best by Charles Prince of Wales, business can only succeed in a sustainable environment. Illiterate, poorly trained, poorly housed, resentful communities, deprived of a sense of belonging or of roots, provide a poor workforce and an uncertain market. Businesses face much difficulty in attempting to balance organizational and cultural roots with the advancement of globalization.
Labor policies vary widely among countries around the world. Issues of freedom to work, freedom to organize and engage in collective action, and policies regarding notification an compensation for layoffs are treated differently in different countries. Political, economic, and cultural differences make it difficult to agree on a universal foundation of employment practices. It does not make much sense to standardize compensation packages within an MNC that spans both developed and underdeveloped nations. Elements such as working conditions, expected consecutive work hours, and labor regulations also create what?
challenges and deciding which employment practice is the most appropriate. For example, the low cost of Labor entices manufacturers to look to Bangladesh; however, workers in Bangladesh are not well paid, and to meet the demand for output they often are forced to work 60 hours a week. In some cases, children are used for this work. Child labor initially invokes negative associations and is considered an unethical employment practice. The reality is that of the 152,000,000 children ages 5 to 17 working globally in 2018, most were engaged in work to help support their families. In certain countries, it is necessary for children to work due to low wages. UNICEF and the World Bank recognize that in some instances, family survival depends on all members working and that intervention is necessary only when the child's developmental welfare is compromised. There has been some progress in the reduction of child labor. The international labor organization reports a 40% decline since 2000. There has also been considerable progress in the ratification of ILO standards concerning child labor. Convention 182 on the worst forms of child labor has been ratified by 180 two countries, with only a few small Pacific island nations yet to endorse it. Convention 138 on minimum age, however has found less acceptance and still remains to be ratified by over a dozen countries including the United States and Australia. Roughly 20% of the children in the world live in the countries that have not ratified convention 138.
Governance rules and regulations differ among countries in regions around the world. For example the UK and the US systems have been termed outsider systems because of dispersed ownership of corporate equity among a large number of outside investors. Historically, although institutional investor ownership has a predominant, institutions generally did not hold large shares in any given company; hence they had limited direct control. In contrast, in an insider system such as that in many continental European countries, ownership tends to be much more what?
concentrated with shares often being owned by holding companies, families, or banks. In addition, differences in legal systems also affect shareholders and other stakeholders rights and in turn the responsiveness and accountability of corporate managers to these constituencies.
Many MNC's such as Intel, HSBC, Lenovo, and Toms take their CSR commitment seriously. These firms have integrated their response to CSR pressures into their what?
core business strategies and operating principles around the world.
since then, NGOs have generally grown in number, power, and influence. Large global NGOs such as Save the Children, ox fam, CARE, Amnesty International, World Wildlife Fund, and conservation international are active in all parts of the world. Their force has been felt in a range of major public policy debates and NGO activism has been responsible for major changes and corporate behavior and governance. Some observers now regard NGOs as a what?
counterweight to business and global capitalism. NGO criticisms have been especially sharp in relation to the activities of MNC's such as Nike, Levi's, Chiquita, and others whose sourcing practices in developing countries have been alleged to exploit low wage workers, take advantage of lax environmental and workplace standards, and otherwise contribute to social and economic problems.
what is Sustainability?
development that meets humanities needs without harming future generations.
The term EKC is based on its similarity to the time series pattern of income inequality described by Simon Kuznets in 1955. In 1992 World Bank development report made the notion of an EKC popular by suggesting that what?
environmental degradation can be slowed by policies that protect the environment and promote economic development. Subsequent statistical analysis however showed that while the relationship could hold in a few cases, it could not be generalized across a wide range of resources and pollutants.
This treaty does not outlaw most payments to political party leaders. In fact, the treaty provisions are much narrower than US negotiators wanted, and there undoubtedly will be on going pressure from the American government to expand the scope and coverage of the agreement. For the moment however it is a step in the direction of a more what?
ethical and level playing field in global business. Additionally, in summing up the impact and value of the treaty, one observer noted, for their part, business executives say the treaty...reflex growing support for anti bribery initiatives among corporations in Europe and Japan that have openly opposed the idea. Some of Europe's leading industrial corporations including a few that have been embroiled in recent allegations of bribery, have spoken out in favor of tougher measures and on the increasingly corrosive effect of corruption.
In the world of international management feature that opened this chapter outlines how these companies have sought to incorporate social responsibility and sustainability into their businesses strategy and operations. In each case, the company has responded to changes in the what?
external environment insult to capitalize on increasing interest in and support of sustainability and business. This interest has spread around the globe such that both developed and developing countries and their companies are increasingly committed to a sustainable future.
The adage, "when in Rome, do as the Romans do" is derived from the idea of cultural relativism and suggests that businesses and their managers should behave in accordance with the ethical standards of the country they are active in, regardless of MNC headquarters location. It is necessary, to some extent, to rely on local teams to execute under local rules; However, this can be taken to what?
extremes. While a business who is only objective is to make a profit may opt to take advantage of these differences and norms and standards in order to legally gain leverage over the competition, it may find that negative consumer opinion about unethical business practices, not to mention potential legal action, could affect the bottom line. Dilemmas that arise from conflicts between ethical standards of a country and business ethics, or the moral code guiding business behavior, are most evident in employment and business practices; Recognition of human rights, including women in the workplace; And corruption.
In complying with the provisions of the FCPA, US firms must be aware of changes in the law that make FCPA violators subject to federal sentencing guidelines. The origin of this law and the guidelines that followed can be traced 22 Lockheed Corp executives who were found guilty of paying a 1,000,000 US dollar bribe to a member of the Egyptian parliament in order to secure the sale of aircraft to the Egyptian military. One of the executives was sentenced to probation and fined 20,000 US dollars and the other who initially fled persecution was fined 100 and 25,000 US dollars and sentence to 18 months in prison. Another development that promises to give teeth to anti bribing legislation is a what?
formal agreement by a host of industrialized nations to outlaw the practice have bribing foreign government officials. The treaty which initially included the member nations of the organization for Economic Cooperation and development or OECD, marked a victory for the United States, which outlawed foreign bribery two decades previously but had not been able to persuade other countries to follow its lead. As a result, American firms had long complained that they lost billions of dollars in contracts each year two rivals that bribed their way to success.
After a number of NGOs pressed companies to take responsibility for the conditions that allowed for these tragedies, Several global apparel firms including Swedish based retailer H&M, Inditex owner of the Zara chain, Dutch retailer C&A, and British companies Primark and Tesco agreed to a plan to help pay for fire safety and building improvements in Bangladesh. The Bangladesh government announced that it would what?
improve its labor laws, raise wages, and ease restrictions on forming trade unions. Walmart and Gap chose not to sign on to the European led agreement out of concerns that they could be subject to litigation. Instead they initiated a separate agreement with US retail trade groups and a bipartisan thinktank. These challenges in the reforms they bring a should contribute to improved workers conditions and help prevent similar tragedies.
The discussion about ethics, CSR and human rights prompts the question how much responsibilities do MNC's have in changing these practices? Caught should they adopt the regulations in the country of origin or yield to those in the country of operation? One remedy could be to what?
instill a business code of ethics that extends to all countries or to create contracts for situations that may arise.
Human rights issues present challenges for MNC's as there is currently no single, universally adopted standard of what constitutes acceptable behavior. It is difficult to list all rights inherent to humanity because there is considerable subjectivity involved, and cultural differences exist among societies. Some basic rights include what?
life, freedom from slavery or torture, freedom of opinion and expression, and a general ambiance of nondiscriminatory practices. One recent violation of human rights that resonated with MNCS was the 2018 assassination of journalist Jamal Khashoggi, a Saudi dissident, by high level Saudi Arabian government officials.
Another interesting trend among businesses and NGO's is the movement towards increasing the availability of fairly traded products. Beginning with coffee and moving to chocolate, fruits, and other agricultural products, fair trade is an organized social movement in what?
market based approach that aims to help producers and developing countries obtain better trading conditions and promote sustainability.
The ethical behavior of business and the broader social responsibilities of corporations have become major issues in the United States and all other countries around the world. Ethical scandals and questionable business practices have received considerable what?
media attention, aroused the public's concern about ethics in international business, and brought attention to the social impact of business operations.
Equal Employment opportunities may be more troubled in Japan than other countries, but the glass ceiling remains pervasive throughout the world. Although progress has been made, women in the United States still earn less than what?
men with the same job. France, Germany, and the United Kingdom have seen an increase in the number of women in management positions but unfortunately woman and management still tend to represent only the lower level and do not seem to have the resources to move up in the company. This is partially due to social factors and perceived levels of opportunity or lack thereof. The United States, France, Germany, in the United Kingdom all have equal opportunity initiatives, whether they are guaranteed by law or represented by growing social groups. Despite the existence of equal opportunity in French and German law, the national organization for women in the United States and British legislation, there is no guarantee that initiatives will be implemented. It is a difficult journey as women attempt to breakthrough the highest levels of the glass ceiling in the workplace but they continued progress is promising.
It is important to have an understanding of what is truly good an practical wisdom to enable one to form an effective plan of action towards realizing what is good; However, absent a fixed and habitual desire for the good, there is little incentive for good actions. There is also an important social component to virtue Siri insofar as ones formation is a special process. The exemplars and practices one finds in one's cultural context guide one's what?
moral development. Virtue theory relies heavily on existing practices to provide an account of what is good and what character traits contribute to pursuing and realizing the good and concrete ways.
Display improvements in Environmental Protection and ethical business practices, many companies continue to violate laws and or jeopardize safety and environmental concerns in their operations. This is particularly true an emerging and developing countries where environmental laws may be reasonably strong but are not as vigorously an forced as in higher income countries. As one example in January 2019, more than 100 children at a primary school in Taizhou China began experiencing what?
nausea, nosebleeds, and vomiting due to toxic chemicals used in the construction of a new running track. In response the Chinese government announced it would update its national standards for the construction of school recreational facilities. As citizens become more demanding that governments and businesses take action to address environmental pollution and the media report on these controversies, officials are likely to feel pressured to respond.
Eastern philosophy, which broadly can include various philosophes of Asia, including Indian philosophy, Chinese philosophy, Iranian philosophy, Japanese philosophy, and Korean philosophy, tends to view the individual as part of, rather than separate from , nature. Many western philosophers generally assume as a given that the individual is something distinct from the entire universe, and many western philosophers attempt to describe and categorize the universe from a detached, objective viewpoint. Eastern perspectives on the other hand, typically hold that what?
people are an intrinsic and inseparable part of the universe and that attempts to discuss the universe from an objective viewpoint, as though the individual speaking or something separate and detached from the whole, are inherently absurd.
Looking at the effect of the FCPA on US Multinationals , it appears that the law has had far more of a positive effect than a negative one period given the growth of American MNC's in recent years, it seems fair to conclude that bribes are not a basic part of business in many countries, for when multinationals stopped this activity, they were still able to sell in that market. on the other hand, this does not mean that bribery and corruption are a thing of the past. Indeed, bribery continues to be a what?
problem for MNC's around the world. In fact recent scandals at IKEA, Odebrecht, Siemens, shell, and many other multinationals underscores The reality that executives continue to participate in bribery and corruption. Factors that appear to contribute to these fluctuations include changes in government or political party in power, economic crises, and crackdowns in individual countries.
Do you later in May 2011, an explosion at a Foxconn iPad factory killed 2 employees. In a survey of Foxconn employees, over 43% of workers stated that they have Ben or seen part of a workplace accident. As a result of these controversies, Foxconn, Dell, Hewlett-Packard and Apple agreed to what?
raise its base pay wage by more than 30%. Earlier Honda had raised wages at some of its factories by 24%. Additional pressure from Apple in 2012 further improved employee safety and reduced working hours at Foxconn. By July 2013, weekly work hours had been limited to just 49 per employee, this reduced overtime hours from 80 to just 36 per month.
At a United Nations summit in September 2015, world leaders placed development at the heart of the global agenda by adopting the sustainable development goals. The 17 sustainable development goals constitute an ambitious agenda to significantly improve the human condition by 2030. The goals set clear targets for what?
reducing poverty, hunger, disease, and inequalities while protecting the environment and climate. For each goal, targets and indicators have been defined and are used to track the progress in meeting the goals. A more specific initiative is the Global Fund to fight AIDs, tuberculosis and malaria, which was established in 2001. Through the end of 2018, the Global Fund had committed over 38 billion US dollars in grants to over 151 countries.
There is a range of ethical theories and approaches around the world, many emanating from what?
religious and cultural traditions.
Many NGOs recognize that MNC's can have positive impacts on the countries in which they do business, Often adhering to higher standards of social and environmental responsibility than local firms. In fact MNC's may be an imposition to transfer best practices and social or environmental actions from their home to host countries markets. In some instances, MNC's and NGOs collaborate on what?
social and environmental projects and in doing so contribute both to the well being of communities and to the reputation of the MNC. The emergence of NGOs that seek to promote ethical and socially responsible business practices is beginning to generate substantial changes in corporate management, strategy, and governance.
MMC's are increasingly engaged in a range of responses to growing pressures to contribute positively to the social and environmental progress of the communities in which they do business. One response is the agreements and codes of conduct in which MNCs commit to maintain certain standards and their domestic and global operations. These agreements which include the UN global compact, the global reporting initiative, the social accountability SA8000 standards, in the ISO 14,000 Environmental Quality standards, provided some assurances that went MNC's do business around the world, they will maintain a minimum level of what?
social and environmental standards in the workplaces and communities in which they operate. These codes help offset the real or perceived concern that companies move jobs to avoid higher labor or environmental standards in their home markets. They may also contribute to the raising of standards in the developing world by exporting higher standards to local firms in those countries.
Kantian philosophical traditions argue that individuals and organizations have responsibilities based on a core set of moral principles that go beyond those of narrow self interest. In fact, Kantian moral analysis rejects consequences either conceivable or likely, as morally irrelevant when evaluating the choice of an agent. rather, a Kantian approach asks us to consider our choices as implying a general rule, or Maxim that must be evaluated for its consistency as a universal law. For Kant, What is distinctive about rational behavior is not that it is self interested or even purpose driven, though all actions do include what?
some purpose as part of their explanation. Instead, rational beings, in addition to having purposes and being able to reason practically in their pursuit, are also capable of evaluating their choices through the lens of a universal law, what Kant calls the moral law or the categorical imperative. From this perspective, we ought always to act under a Maxim that we will consistently act in a manner that is desirable for all under similar situations, thus becoming a de facto universal law.
Corporate governance structure specifies the distribution of rights and responsibilities among different participants in the Corporation, such as the board, managers, shareholders, and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the what?
structure through which the company objectives are set and the means of attaining those objectives and monitoring performance.
This approach called integrative social contract theory or ISCT, attempts to navigate a moral position that does not force decision makers to engage exclusively in relativism versus absolutism. It allows substantial latitude for nations and economic communities to develop their unique concepts of fairness but draws the line at flagrant neglect of core human values. It is designed to provide international managers with a framework when confronted with a what?
substantial gap between the apparent moral and ethical values in the country in which the MNC is headquartered in the many countries in which it does business. Although I SCT has been criticized for its inability to provide precise guidance for managers under specific conditions, it nonetheless offers one approach to helping reconcile a fundamental contradiction in international business ethics.
Ensuring that all contractors along the global supply chain are compliant with company standards is an ongoing issue and one that is not without challenges. This issue came to a head once again when a Bangladesh factory that produced products for Walmart caught fire in November 2012, killing 112 workers. Walmart immediately responded by severing all ties with who?
suppliers who use subcontractors without Walmart's knowledge and began requiring all overseas factories to pass audits before they could be used to produce Walmart products. Yet a subsequent collapse of a garment factory in Bangladesh in April 2013 that killed more than 1000 and a fire not two weeks later also in Bangladesh, killing eight, the challenges companies face and trying to develop and implement policies for production that is highly outsourced.
The newer area of corporate social responsibility is closely related to ethics. However, we discuss CSR issues separately. Ethics is the study of or the learning process involved in understanding morality, while a CSR involves what?
taking action. Furthermore, the area of ethics has a lawful component and implies right and wrong in a legal sense, while CSR is based more on voluntary actions. Business ethics and CSR therefore may be viewed as two complementary dimensions of a company's overall social profile and position.
Ethics is often the victim of subjectivity as yields to the will of cultural relativism, or they believe what?
that the ethical standard of a country is based on the culture that created it and that moral concepts lack universal application.
As noted in the introduction, ethical dilemmas arise from conflicts between ethical standards of a country and business ethics, or the moral code guiding business behavior. Most MNC's seek to adhere to a code of ethical conduct while doing business around the world yet they must make some adjustments to respond to local norms and values. Navigating this natural tension can be challenging. One approach advocated by two prominent business ethicists suggests what?
that there exist implied social contracts that generally govern behavior around the world, some of which are universal or near universal. These hyper norms include fundamental principles like respect for human life or abstention from cheating, lying, and violence. Local community norms are respected within the context of such hyper norms when they deviate from one society to another.
While the United States has the Environmental Protection Agency to provide information about an enforce environmental laws, the United Nations also has a division dedicated to education, promotion, facilitation, and advocacy of sustainable practices and environmentally sound concerns, called what?
the United Nations environment program or UNEP. The degree to which global awareness and concern are rising extends beyond laws and regulations, as corporations are now taking strides to be leaders in this green movement.
The foreign corrupt policy's act or FCPA makes it illegal for US companies and their managers to attempt to influence foreign officials through personal payments or political contributions. Prior to passage of the FCPA, some American multinationals had engaged in this practice but realizing that their stockholders were unlikely to approve of these tactics, the firms typically disguised the payments as entertainment expenses, consulting fees, and so on. Not only does the FCPA prohibit these activities, but the US Internal Revenue Service also continually audits what?
the books of the MNC's. Those firms that take deductions for such illegal activities are subject to high financial penalties, and individuals who are involved can even end up going to prison period strict enforcement of the FCPA has been applauded by many people but some critics wonder if such a strong stance has hurt the competitive ability of American MNC's. On the positive side, many US multinationals have now increased the amount of business in countries where they used to pay bribes. Additionally, many institutional investors in the United States have made it clear that they will not buy stock in companies that engage in unethical practices and will sell their Holdings in such firms. Given that these institutions have hundreds of billions of dollars invested, senior level management must be responsive to their needs.
Through these and other efforts, MNC's, governments, and international organizations are providing a range of resources to communities around the world to assist them as they respond to what?
the challenges of globalization and development. International managers will increasingly be called upon to support and contribute to these initiatives.
Corporate governance will undoubtedly remain high on the agenda of governments, investors, NGOs, and corporations in the coming years, as pressure for accountability and responsiveness continues to increase. As noted, government corruption is a pervasive element in the international business environment. Recently publicized scandals in Brazil, China, Costa Rica, Egypt, Pakistan, Russia, South Africa, and elsewhere underscores what?
the extent of corruption globally especially in the developing world. However a number of initiatives have been taken by governments and companies to begin to stem the tide of corruption.
Following his murder, executives from numerous MNC's including Uber, Viacom, JPMorgan Chase, The Virgin group, and Google, cancelled their participation in what?
the future investment initiative business conference set to take place later that month in Saudi Arabia.
Utilitarianism, a form of consequentialism, favors the greatest good for the greatest number of people under a given set of constraints. A given act is morally correct if it maximizes utility, that is if the ratio of benefit to harm which is calculated by taking everyone affected by the act into consideration, is greater than the ratio resulting from an alternative act. This theory was given its most famous modern expression in the works of Jeremy Bentham and John Stuart Mill, Two English utilitarian's writing in the 18th and 19th centuries, both of whom emphasized what?
the greatest happiness principle as their moral standard. Utilitarianism is an attractive perspective for business decision-making, especially in Western countries, because its logic is similar to an economic calculation of utility or cost benefit, something many western managers are accustomed to doing.
The offshoring of highly technical jobs can also result in the relocation of some domestic management positions, treating an interesting dynamic in the scope of ethics and corporate responsibility. While most international managers concern themselves with understanding the social culture in which the Corporation is enveloped and how that can mesh with the corporate culture, this recent wave involves the extension of an established corporate culture into a new social environment. The difference here is that what?
the individuals being moved offshore are part of a corporate citizenship, meaning that they will identify with the Corporation and not necessarily the outside environment; The opposite occurs when the firm moves to another country and seeks to employ local citizens. IBM proves that it is possible to succeed with such an effort but as more and more companies follow suit other questions and concerns may arise. How will the two cultures work together? Will employees adhere to the work schedule of the home or the host country? Will the host country be open or reluctant to an influx of new citizens? The latter may not be a current concern due to the infrequency of offshoring but MNC's may face a time when they have to consider more than just survival of the company. One must also bear in mind the effects these choices will have on both cultures.
Apple also partnered with the fair labor Association too independently audit the safety of the Foxconn plants. Some analysts believe these higher wages combined with the longstanding shortage and high turnover of factory workers in China will eventually result in what?
the lowest wage manufacturing moving to other countries such as Vietnam while higher value added production will remain in China.
The emergence of organized civil society and NGOs has dramatically altered the business environment globally and the role of MNCs within it. Although social movements have been part of the political and economic landscape for centuries, the emergence of NGO activism in the United States during the modern era can be traced back to when?
the mid 1984 when a range of NGO's including church and community groups, human rights organizations, and other anti apartheid activists, built a strong network stand pressed US cities in states to divest their public pension funds of companies doing business in South Africa. This effort combined with domestic unrest, international governmental pressures, and capital flight posed a direct sustained and ultimately successful challenge to the white minority rule, resulting in the collapse of apartheid.
Recent examples in the palm oil and coal industries help illustrate the complex an increasingly important impact of NGOs on MNC's. In 2018 after facing pressure from the WWF and other NGOs, Nestle committed to achieving certified sustainable sourcing for 100% of its palm oil by 2020 three period palm oil is an affordable and versatile ingredient that is used in a variety of products but obtaining the oil often results in the clear cutting of forests and other severe environmental impacts. Many companies including Cargill, Procter and gamble, and unilever, have made similar commitments to join what?
the roundtable on sustainable palm oil, a nonprofit group that includes NGOs and other stakeholders. In 2015 on the opening day of the United Nations climate summit in Paris, Morgan Stanley and Wells Fargo announced that they would no longer provide financing to coal mining companies in both the developed and developing world. Morgan Stanley also stated that it , as a finance ear, has a responsibility to guide the global community towards a low carbon economy. This announcement came after several months of aggressive pressure and lobbying by Environmental Protection groups, including the rainforest Action Network . An online petition initiated by RAN drew thousands of signatures.
what is Corporate governance?
the system by which business corporations are directed and controlled.
In addition to government and corporate sponsored ethics and social responsibility practices, governments and corporations are increasingly collaborating to provide assistance to communities around the world through global partnerships. This assistance is particularly important for those parts of the world that have not fully benefited from globalization and economic integration. Using a cost benefit analysis of where investments would have the greatest impact, a recent study identified what?
the top priorities around the world for development assistance. Fighting malnutrition, controlling malaria, and immunizing children are shown to be the best investments. Government, international institutions, and corporations are involved in several ongoing efforts to address some of these problems.
Women's rights and gender equity can be considered a subset of human rights. While the number of women in the workforce has increased substantially worldwide, most are still experiencing the effects of a glass ceiling, Meaning that it is difficult if not impossible to reach what?
the upper management position. Japan provides a good example. A 2018 survey found that 3/4 of Japanese businesses still have no female members on their senior leadership teams. Despite a nearly equal proportion of females and males graduating from college, less than 10% of all Japanese management positions are occupied by women. Many female college graduates are still offered only secretarial or low level jobs, as many Japanese business leaders still believe that woman will quit and get married within a few years of employment. Japan ranked 110th in the 2018 gender gap index study by the World Economic Forum, placing at far behind most other advanced economies.
In international management, executives may rely upon one or more of these perspectives when confronted with decisions that involve ethics or morality. While they may not invoke the specific philosophical tradition by name, they likely are drawing from what?
these fundamental moral and ethical beliefs when advancing a specific agenda or decision.
GE has pursued an aggressive initiative to integrate environmental sustainability with its business goals through the ecomagination program. Management styles again are changing as agendas are refocused on not only seeing the present but also looking to the future of human needs in the environment. Echo imagination is a GE strategic initiative to use innovation to improve energy efficiency across the globe. By meeting the demand for green products and services, GE is generating value for shareholders as well as promoting environmental sustainability. At a GE Hitachi nuclear energy power plant in North Carolina, a new wastewater system has reduced water usage by 25 million gallons annually, avoiding nearly 80 tons per year of CO2 emissions and realizing annual savings of $160,000 in water and energy costs. GE's ecomagination ZeeWeed Membrane bioreactor technology transforms up to 65,000 gallons per day of wastewater into what?
treated water that can be used in the facilities cooling towers. GE Jenbacher engines capture gas from various fuel sources, even garbage, to create power. Jenbacher Indians are at a core of a Mexican landfill gas energy project, which president Felipe Calderon called a model renewable energy project for Latin America. This project's power supports Monterrey's light rail system during the day and city street lights at night.
Unbiased ethical decision-making processes are imperative to modern international business practices. It is difficult to determine a what?
universal ethical standard when the views and norms in one country can vary substantially from those and others.
now with standing recent scandals, and general North American and European systems are considered comparatively responsive to shareholders and other stakeholders. In regions with less well developed legal and institutional protections and poor property rights, such as some countries in Asia, Latin America, and Africa, forms of crony capitalism may emerge in what?
which week corporate governance and government interference can lead to poor performance, risky financing patterns, and macroeconomic crises.
Conservation of natural resources is another area of ethics and social responsibility in which countries around the world differ widely in their values and approach. Many poor, developing countries are more concerned with improving the basic quality of life for their citizens than worrying about endangered species or the quality of air or water. There are several hypothesis regarding the relationship between economic development as measured by per capita income and the quality of the natural environment. The most widely accepted thesis is represented in the environmental Kuznets curve or EKC, which hypothesizes that the relationship between per capita income and the use of natural resources and or the emission of wastes has an inverted U shape. According to this theory, as developing economies industrialize and per capita income begins to increase, the use of natural resources and or the emission of wastes increases. Once economic production and per capita income reach a certain inflection point, the use of the natural resources and or the emission of waste begins to decline. Reasons for this inverted U shaped relationship are hypothesized to include income driven changes in what?
- the composition of production and or consumption - the preference for Environmental Quality - institutions that are needed to internalize Externalities - increasing returns to scale associated with pollution abatement
China's human rights record continues to be a challenge for MNC's. Human rights lawyers are frequently detained by the government and peaceful Tibetan activists have received lengthy prison sentences for expressing their freedom of speech. In 2018 it was estimated that as many as what?
1,000,000 ethnic Uighur Muslims were being held in re education internment camps in the Xinjiang region of China. Despite these violations, most MNC's continue their involvement in China although friction still exists between countries with high and low human rights standards
Despite difficulty in achieving international consensus on environmental reform, recent progress holds promise. The Paris agreement with 194 signatories as of 2019 is a wide ranging greenhouse gas agreement that aims to drastically reduce global emissions beginning in 2020. The agreement was originally drafted in when?
2015 at the 21st annual United Nations climate change conference. Representatives from more than 185 countries contributed to the agreement and all parties at the conference agreed unanimously to the final text. Following official ratification by more than 55 countries representing in excess of 55% of global emissions, the Paris agreement officially took effect in November 2016.
Another phenomenon in response to globalization has been not just to offshore low cost labor intensive practices, but to transfer a large percentage of highly specialized jobs of all types to foreign locations. This is especially true in India where the inexpensive highly educated workforce has aided many institutions but also has put a strain on some industries, particularly home based technology services. IBM with a long history rooted in the United States now bases more than what?
30% of its employees in India. Cutting edge research efforts including the development of AI and self driving car technologies, have increased at its Indian operations. While IBM continues to shrink its domestic workforce, the company has doubled its employment in India in the past 10 years. The labor costs in India at less than half of those in the United States give companies like IBM a competitive advantage by offering high quality consulting expertise that is unmatched by its Indian competition but at a similarly low cost.
In addition to the 36 members of the OECD, a number of developing countries including Argentina, Brazil, Bulgaria, Columbia, and South Africa, have signed on to the OE CD agreement. Latin American countries have established the organization of American states or OAS enter American convention against corruption, which had what?
34 signatories by 2019, including Argentina, Brazil, Chile, Mexico, and the United States. As a way to prevent the shifting of corrupt practices to suppliers and intermediaries, they transparent agents against contracting entities or TRACE, standard was developed after a review of the practices of 34 companies. It applies to business intermediaries including sales agents, consultants, suppliers, distributors, resellers, subcontractors, franchisees, and joint venture partners, so that final producers, distributors, and customers can be confident that no party within a supply chain has participated in corruption. Both governments and companies have made important steps in their efforts to stem the spread of corruption, but much more needs to be done in order to reduce the impact of corruption on companies and the broader societies in which they operate.
Walmart one of the most well known and pervasive global retailers have begun to recognize the numerous benefits of the adage, think globally act locally. Walmart has set 3 broad corporate goals in regard to sustainability: to use 100% renewable energy, to achieve 0 waste, and to sell products that are sustainable for the environment and people. Working with environmentalists, the company has innovative its production and supply chain practices to reduce waste and pollution, and therefore reduce costs. By 2018, Walmart had managed to divert what?
78% of waste and unsold products from landfills. In an effort to encourage sustainability from its suppliers, Walmart created a sustainability hub website to share standards and encourage innovation. Additionally, the company has set stringent environmental policies for its suppliers, including its 2017 deforestation policy which requires suppliers to use certified or recycled wood products. And Walmart's efforts are truly global. In line with the three corporate goals, the companies buying solar and wind power in Mexico, sourcing local food in China and India, and analyzing the lifecycle impact of consumer products in Brazil. Walmart aims by 2025 to reduce emissions globally by 18% and achieve 0 waste in its operations in the United States, Canada, Japan, and the United Kingdom. Although Walmart has faced some setbacks in ITS global CSR efforts, it continues to respond to pressures for social responsibility and sustainability.
what is Fair trade?
An organized social movement and market based approach that aims to help producers in developing countries obtain better trading conditions and promote sustainability.
The recent global, ethical, in governance scandals have placed corporations under intense scrutiny regarding their oversight and accountability. Uber, Wells Fargo, and Volkswagen are just a few of the dozens of companies that have been found to engage in inappropriate and often illegal activities related to governance in recent years period in addition, a number of financial service firms, including Danske bank, credit Suisse, Deutsch bank, Citigroup, and many others, have been found to have engaged in inappropriate trading or other activities. Corporate governance is increasingly high on the agenda for who?
Directors, investors, and governments alike in the wake of financial collapses and corporate scandals in recent years period the collapse is an scandals have not been limited to a single country or even a single continent, but have been a global phenomenon.
In early 2010, the issue of relatively low wages paid by Chinese subcontractors made the headlines after a number of suicides by workers at factories run by who?
Foxconn, one of the largest contractors for electronics firms such as Apple, and a strike by workers at a Honda plant.
what is Nongovernmental organizations (NGOs)?
Private, not-for-profit organizations that seek to serve society's interests by focusing on social, political, and economic issues such as poverty, social justice, education, health, and the environment.
