TopicThree

Ethics and
Social Responsibility
 Ethics and Social Responsibility in
International Management
Ethics
Study of morality and standards of conduct.

Dilemmas arising from conflicts between ethical

standards between countries most evident in
employment practices

Doing well by doing good

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Ethics and Social Responsibility in
International Management
Corporate Social Responsibility (CSR)
Involves the voluntary actions of a firm to benefit
society beyond requirements of law and direct
interests of firm

CSR concerns include working conditions in

factories and service centers as well as
environmental impacts of corporate activities

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Ethics Theories and Philosophy

Kantian philosophical traditions

Aristotelian virtue ethics
Utilitarianism
Eastern philosophy

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 Human Rights

Human rights issues challenge MNCs

Currently no universally adopted standards for what is
acceptable behavior

Human rights violations still rampant globally

Tiananmen Square (1989) and apartheid (reducing in 1994)
Womens rights and gender equity

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 Ethics and Social Responsibility
Around the World: JAPAN
Equal opportunity issues
Refusal to hire women or promote them into
management positions
Hostile work environment
Traditional role of females and female employees
Sexual harassment may not be considered a moral
issue

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 Ethics and Social Responsibility
Around the World: EUROPE
Equal employment opportunity
Glass ceiling difficult to get upper management
position

France, Germany, Great Britain have seen increase

in number of women in management, but tend to
represent only lower levels

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 Labor, Employment and Business
Practices
Employment and business practices
Difficult to establish a universal foundation of
employment practices

Difficult dilemmas in deciding working conditions,

expected consecutive work hours, and labor
regulations

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 Environmental Protection
and Development
Countries approach the issue of conservation
of natural resources differently

Many companies violate laws and jeopardize

the environment

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The Environmental Kuznets Curve

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 Globalization and Ethical
Obligations of MNCs
Should the MNC adopt the regulations in the
country of origin or those in the country of
operation?
Doing the right thing is not always easy
Levi Strauss in Bangladesh
Children under age

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 Reconciling Ethical Differences
across Cultures
Integrative Social Contracts Theory
Corporate Social Responsibility
Sustainability
Development that meets humanitys needs without
harming future generations

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 Corporate Social Responsibility
and Sustainability
Nongovernmental organization (NGO)

NGOs have grown in number, power, influence

NGO activism has caused major changes in corporate

behavior NGOs have been active in promoting fair trade
products

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 Corporate Response to Social
and Organizational Obligations
Agreements and codes of conduct committing
MNCs to maintain certain standards
U.N. Global Compact
Codes help offset real or perceived concern
that companies move jobs to avoid higher
labor or environmental standards in their home
markets

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 Corporate Governance

Corporate governance
The system by which business corporations are
directed and controlled.

Becoming more important after numerous

scandals
Arthur Anderson, Enron, UnitedHealthcare

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 Corporate Governance

Many continental European countries are

insider systems

Rules and regulations differ among countries

and regions
U.K. and U.S. systems are outsider systems

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 Corruption

Corruption
Government corruption is a pervasive element in
international business environment

Some evidence that discontinuing bribes does

not reduce sales of the firms products or
services in that country

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 Global Initiatives to Increase
Accountability and Limit Corruption
Foreign Corrupt Practices Act

Organization of American States Inter-

American Convention Against Corruption
Foreign Corrupt Practices Act

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 Corruption and
Foreign Corrupt Practices Act
Recent formal agreement by many
industrialized nations to outlaw the practice of
bribing foreign government officials

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 International Assistance

Governments and corporations are

collaborating to provide assistance to
communities and locales through global
partnerships

Best investments

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