Tan Tao University

Guest Lecture
Ethics in International Business
Dr. Michael J. Barnes
4
th
May , 2012



Ethics in International Business

Accepted principles of right or wrong in the
conduct of business
Ethical strategy is a course of action that does
not violate these accepted principles
Moral dilemmas occur when none of the
alternatives seem ethically acceptable


Roots of Ethical Dilemmas

Political systems, Laws, Economic conditions, and Cultures
vary greatly from nation to nation

Most common problems in IB involve:

- Employment practices
- Human Rights
- Environmental regulations
- Corruption
- Moral obligations of MNCs



Roots of Unethical Behavior

Business ethics relate to personal ethics
Failure to ask: Is this Ethical?
Organizational Culture and Climate
Pressure to meet unrealistic goals
Leadership and the example they set

Some Approaches to Business
Ethics
M. Friedman: Only social responsibility is to
maximize profits so long as within law
Cultural Relativist: Ethics reflect culture, so When
in Rome, do as the Romans do
Righteous Moralist: Home-country standards are
appropriate everywhere
Nave Immoralist : If competitors not following
ethical norms, then you should not either


18
th
/19
th
Century
Ethics & Philosophy

Utilitarians ( D Hume, J Bentham, JS Mill)
Moral worth of actions determined by
consequences, or the net good
Immanuel Kant: People have dignity and
should not be treated merely as means to the
ends of others

20
th
Century Rights & Justice
Fundamental rights transcend national borders
and cultures
UN Universal Declaration of Human Rights
Article 23 on Employment states right to
- work, - free choice, - just and favorable
conditions, - protection against
unemployment, - equal pay for equal work, -
form and join trade unions

Five Practical Steps


Favor hiring and promoting people with a
well-grounded sense of personal ethics
Build an Organizational Culture with a high value on
ethical behavior
Make sure Leaders Walk the Talk
Implement decision-making processes that requires
consideration of Ethical Dimension
Develop Moral Courage


Moral Courage
Enables managers to walk away from a
decision that is profitable, but unethical
Gives an employee strength to say No to
a superior who instructs her to pursue
unethical action
Gives you the integrity to whistle blow
Does not come easy, and may cost you your
job
Source
International Business (6
th
edition)
By Charles W. L. Hill
Chapter 4
Published by McGraw-Hill