ETHICS

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ETHICSINTERNATIONAL BUSINESS
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• Ethic Norms vary across cultures
• Broad ethical norms are shared around the wold.
  The major religions all condemn murder, theft,
  lying. However, the practical implications are
  far more controversial.

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• I - Introduction

• The problems of deciding what behavior is ethical
  are further complicated when values seem to
  change across time.
• Ex Thirty years ago few people thought of
  cigarette smoking as an ethical problem. Medical
  dangers of passively inhaling smoke from another
  persons cigarette.
• Forces in the External Environmentplayed a role
  in a society reordering its ethical priorities.
  Needs to gain international credibility.

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A - Extreme versus non-extreme positions
B - Definite benefits in enforcing some sort of
ethical framework.

• Ex Nike, BMW

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C - A reputation for ethical behavior is
profitable.

• Redefine unethical behavior
• Companies are increasingly aware of their
  dependence upon the social environment. Customers
  and suppliers prefer to deal with companies that
  have a good record on social issues and employees
  to work for them.

• Ex
• a) Levi-Strauss developed a program to address
  the problem of AIDS in the workplace
• b) BMW building a new plant that reutilizes
  parts, recycling used parts

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• II - BRIBERY IN INTERNATIONAL BUSINESS

• It has been against the law since the SEC act of
  1934 to offer questionable or illegal payments to
  foreign officials. However, the 1934 law was
  bypassed so often that the government enacted the
  Foreign Corrupt Practices Act of 1977 (FCPA)
  regarding to international business bribery and
  fraud.
• Under the SEC act only individuals in
  publicly-held firms were liable. The 1977 act
  extended to individuals, and other private
  companies the jurisdiction of the government

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• In 1988 the government made it legal to pay
  foreign officials in order to facilitate or
  expedite permits, licenses, other approvals.
• Thus, it made easier for U.S. companies to make
  payments to facilitate customs procedures, and in
  addition firms may not be liable for under the
  table payments made by their reps, unless the
  company knew about them
• The bribery issue is more prevalent in some
  nations more than in others (See ranking)
• Most likely targets defense contracts, large
  construction projects, turnkey projects.

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III - THE COST OF BRIBERY

• a) The company sets a precedent
• b) The organization may start believing that
  bribery is a standard operating procedure
• c) Bribery may be used to dismiss faux pas,
  failures, and other mistakes
• d) Jail sentences, loss of a job
• e) Increases cost of international business
  operations
• f) Damages firms domestic and international
  reputation

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What to do
a) Call Fraud Section Criminal Division U.S.
department of Justice [phone] b) Call or
contact the Office of the Chief Counsel of
International Commerce, U.S. Department of
Commerce [phone].
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IV - GIFTS
Legal and Illegal Gifts and Practices