BUSINESS ETHICS

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BUSINESS ETHICS

• Ethics - the rules and values that determine what
  goals and actions people follow when dealing with
  other human beings
• Business ethics all business decisions with
  ethical consequences

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INTERNATIONAL BUSINESS ETHICS

• The unique ethical problems faced by managers
  conducting business operations across national
  boundaries

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SOCIAL RESPONSIBILITY

• The responsibility businesses to society beyond
  making profits
• Often reflect the ethical values and decisions
  of the top management team
• Ethics and social responsibility not easily
  distinguished in practice

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EX 15.1
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BALANCING THE NEEDS OF THE COMPANY WITH ETHICAL
CONSEQUENCES

• Managers must weigh and balance the economic,
  legal, and ethical consequences of their
  decisions

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FORMS OF ANALYSES

• Economic
• Legal
• Ethical

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TRADITIONAL VIEWS

• Two basic systems of ethical reasoning
• Deontological
• Teleological

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DEOLONTOLOGICAL THEORIES

• Actions have a good or bad morality regardless of
  the outcomes they produce

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TELEOLOCIAL

• Morality from the consequences of an act
• Utilitarianism

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MORAL LANGUAGES

• A contemporary view
• Basic ways that people use to make ethical
  decisions and explain ethical choices

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SIX BASIC ETHICAL LANGUAGES

• Virtue and vice
• Self control
• Maximize human welfare
• Avoiding harm
• Rights/duties
• Social contract

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NATIONAL DIFFERENCES

• National culture and social institutions affect
  ethical behavior/social responsibility

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EX 15.3 ETHICAL ISSUES IDENTIFIED BY SENIOR U.S.
AND EUROPEAN MANAGERS
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ETHICAL RELATIVISM VS ETHICAL UNIVERSALISM

• Ethical relativism - each society's view of
  ethics considered legitimate and ethical
• Ethical universalism - basic moral principles
  transcend cultural/national boundaries

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PRACTICAL PROBLEMS OF FOLLOWING EITHER

• Convenient relativism - companies use ethical
  relativism to behave any way they please
• Cultural imperialism with ethical universalism

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ETHICAL CONVERGENCE

• In spite of wide differences in cultures and
  social institutions, growing pressures for
  multinationals to follow same rules

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PRESSURES FOR ETHICAL CONVERGENCE

• Growth of international trade
• Creates pressures for uniformity
• Increased cross national imitation
• Mixed cultural background employees

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FOREIGN CORRUPT PRACTICES ACT

• Forbids U.S. companies to make or offer payments
  or gifts to foreign government officials to get
  or retain business
• FCPA does not prohibit some forms of payments
  that may occur in international business
• Payments made under duress to avoid injury or
  violence are acceptable

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EFFECTS OF THE ETHICS GAP

• FCPA and proliferation of ethical codes in US are
  creating an ethics gap
• FCPA blocked some gains in export market share
  and FDI
• Pressure on other countries to follow US rules

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CODE OF CONDUCT

• For moral language to work, there must be codes
  of conduct
• Current codes exist based on codes from
  international governing bodies (UN, ILO) and
  international agreements

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WHY MULTINATIONALS DO NOT ALWAYS FOLLOW ETHICAL
PRINCIPLES?

• Governments make agreements
• Compliance voluntary
• Not all governments subscribe
• Each guide is an incomplete moral guide

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HOW SHOULD THE MANAGER DECIDE?

• Consider whether the action makes business sense
• Conduct an ethical analysis