Session 6: Ethical Issues in International Business

1
Session 6 Ethical Issues in International
Business

• Chapter 22
• Objectives
• Understand the concept of cultural relativism
• Understand various aspects of questionable
  foreign payments
• Understand the issues involved in operating in
  developing countries

2
Ch. 22 Ethics Issues in International Business

• Cultural Relativism refers to
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3
3 General Principles to Guide Global Business
Activity

• Respect for core human values (human dignity,
  respect for basic rights, and good citizenship),
  which determine the absolute moral threshold for
  all business activities
• Respect for local traditions
• The belief that context matters when deciding
  what is right and wrong.

4
Five Guidelines for Ethical Leadership

• Treat corporate values and formal standards of
  conduct as absolutes
• Design and implement conditions of engagement for
  suppliers and customers
• Allow foreign business units to help formulate
  ethics standards and interpret ethics issues
• In host countries, support efforts to decrease
  institutional corruption
• Exercise moral imagination

5
Operating in Developing Countries

• Issues are more complex when people cannot
  protect their rights or advance their interests
  due to poverty, lack of education, inadequate
  health care, etc.
• Governments may not provide adequate information
  or protection

6
Questionable Foreign Payment

• In some undeveloped countries, small payments
  (bribes) to lower level government officials
  facilitates administrative hurdle clearing.
• At what point does a firm forego sales if
  recurring and pervasive payments present an
  injustice?

7
Group Presentations