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IBT Notes Chap 5

This document provides an overview of ethics, corporate social responsibility, and sustainability in international business. It discusses key topics like employment practices, human rights, environmental pollution, and corruption that companies may face. Unethical behavior can stem from personal ethics, decision-making processes, organizational culture, leadership, performance goals, and societal culture. The document examines philosophical approaches like utilitarianism, Kantian ethics, and rights theories to guide ethical decision making. It focuses on the managerial implications of these issues in international operations.

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311 views

IBT Notes Chap 5

This document provides an overview of ethics, corporate social responsibility, and sustainability in international business. It discusses key topics like employment practices, human rights, environmental pollution, and corruption that companies may face. Unethical behavior can stem from personal ethics, decision-making processes, organizational culture, leadership, performance goals, and societal culture. The document examines philosophical approaches like utilitarianism, Kantian ethics, and rights theories to guide ethical decision making. It focuses on the managerial implications of these issues in international operations.

Uploaded by

Mairene Castro
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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IBT Notes

CHAPTER 5 – Ethics, Corporate Social Responsibility, and Sustainability


Introduction
Ethics, corporate social responsibility, and sustainability are “social” issues that arise frequently
in international business.
 Ethics are the core starting point.
• Ethics – refers to accepted principles of right or wrong
o Ethics serves as the foundation for what people do or do not do, and
ultimately ethical behavior of employees results in corporate social
responsibility and sustainability practices engaged in by the company.
• Business ethics are the accepted principles of right or wrong that govern the
conduct of business people.
• Ethical strategy refers to a strategy, or course of action, that does not violate a
company’s business ethics.

Ethics and International Business


 Employment Practices
• Suppose work conditions in a host nation are inferior to those in a
multinational’s home nation.
 Human Rights
• Freedom of association.
• Freedom of speech.
• Freedom of assembly.
• Freedom of movement.
• Freedom from political repression.
 Environmental Pollution
• Problems occur when environmental regulations differ between host nations
and home nation.
 Corruption
• Ethical implications of corruption:
o Are bribes the price to pay to do a greater good?
o Do bribes reduce businesses’ incentive to invest?
Ethical Dilemma
- A situation in which there is no ethically acceptable solution.

Roots of Unethical Behavior


Why do managers behave unethically?
• Six determinants of ethical behavior:
1. Personal Behavior / Ethics
 From parents, schools, religion, media.
 An individual with a strong sense of personal ethics is likely to behave
in an unethical manner in a business setting.
2. Decision-Making Processes
3. Organizational Culture
4. Leadership
5. Unrealistic Performance Goals
 Hinted at: the pressure from the parent company to meet unrealistic
performance goals that can be attained only by cutting corners or
acting in an unethical manner.
6. Societal Culture

Philosophical Approaches to Ethics


Straw Men
 Offer inappropriate guidelines for ethical decision making.
• The Friedman Doctrine― “the social responsibility of business is to increase
profits,” so long as the company stays within the rules of law.
• Cultural relativism―ethics are reflection of culture.
• Righteous moralist―a multinational’s home-country standards of ethics should
be followed in foreign countries.
• Naïve Immoralist – Asserts that if a manager of a multinational sees that firms
from other nations are not following ethical norms in a host nation, that
manager should not either.
 Utilitarian and Kantian Ethics
• Utilitarian approaches to ethics:
o Actions are desirable if they lead to the best possible balance of good
consequences over bad consequences.
• Kantian ethics:
o People should be treated as ends and never purely as means to the ends
of others.
o People have dignity and need to be respected.
 Rights Theories
• Human beings have fundamental rights and privileges that transcend national
borders and cultures.
• Universal Declaration of Human Rights
o A United Nations document that lays down the basic principles of human
rights that should be adhered to.
 Article 23:
- Everyone has the right to work, to free choice of employment, to
just and favorable conditions of work, and to protection against
unemployment.
- Everyone has the tight to equal pay for equal work.
- Everyone who works has the right to just and favorable
remuneration
- Everyone has the right to form and to join trade unions for the
protection of his interests.
 Justice Theories
• Focus on the attainment of a just distribution of economic goods and services.
• Just Distribution – a distribution of goods and services that is considered fair and
equitable

Focus on Managerial Implications

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