S I X T H

E D I T I O N

BUSINESS AND ITS

ENVIRONMENT

David R Baron
Stanford University

PEARSON

Pearson Education International

Contents
List of Cases
Preface

PART I:

xvi

xix

STRATEGY AND THE NONMARKET ENVIRONMENT

CHAPTER 1 Market and Nonmarket Environments

1
Introduction
1
The Environment of Business
2
The Role of Management
3
Market and Nonmarket Environments
4
Analysis of the Nonmarket Environment: The Four I's
5
The Nonmarket Environment of the Automobile Industry
5
Issues 5 Interests 8 Institutions 9 Information 10
Change in the Nonmarket Environment
11
Anticipating Change in the Nonmarket Environment
13
The Nonmarket Issue Life Cycle
13
EXAMPLE: GRADUATION CARDS

14

Summary
16
Cases
17
The Nonmarket Environment of the Pharmaceutical Industry
The Nonmarket Environment of McDonald's
20
The Nonmarket Environment of Google 25

17

CHAPTER 2 Integrated Strategy

33
Introduction
33
Strategy in the Nonmarket Environment
33
The Importance of Nonmarket Strategy 33 Competition and Change in the Nonmarket Environment 35
Strategy and the Nonmarket Issue Life Cycle 36 Strategies and Borders 36
Integrated Strategy
37
Google and the Spectrum Auction 38
EXAMPLE: DIRECT-TO-CONSUMER ADVERTISING AND INTEGRATED STRATEGY IN THE
PHARMACEUTICAL INDUSTRY
40

Approaches to Integrating Market and Nonmarket Strategies 41

Nonmarket Positioning
42
Nonmarket Positioning and Market Strategies 43
EXAMPLE: EBAY'S POSITIONING IN LEGAL SPACE

44

Positioning Spaces 46 The Perils of Positioning 47

Nonmarket Capabilities and Reputation
48
A Framework for the Analysis of Nonmarket Issues

49

EXAMPLE: CITIBANK AND CREDIT CARDS FOR UNDERGRADUATES

Organization of the Nonmarket Strategy Function

Summary
53
Cases
54

51

52

Exclusive Resorts: Entrepreneurial Positioning and Nonmarket Defense

54
Envirotest Systems Corporation (A)
57
Molecular Insight Pharmaceuticals: Integrated Strategy for a Development Stage Molecular
Medicine Company
61

vi Contents
CHAPTER 3 The News Media and Nonmarket Issues
66
Introduction
66
The Role of the News Media in Nonmarket Issues
66
Messages and Their Interpretation
68
A Theory of News Media Coverage and Treatment
69
Intrinsic Audience Interest 69 Societal Significance 70 Combining the Perspectives 70
Extending the Theory
72
Newsworthiness 72 The Cost of Coverage 73 Balance and Fairness 73
The Nature of the News Media
74
News Organizations as Businesses 74 The Profession 74 Does the News Media Treat Issues Selectively? 75
Bias, Accuracy, and Fairness 76 The Internet and Citizen Journalism 77
Business Interactions with the News Media
78
The Need for Information 78 Media Strategies 78 Responses and Media Vacuums 79
Media Interviews 79 Anticipating Issues 80 Unanticipated Events 81
Recourse in Disputes with the Media
81
Private Recourse 81
EXAMPLE: PROCTER & GAMBLE AND NEIGHBOR TO NEIGHBOR

Recourse to the Law: Defamation and Libel 83

Summary
85
Cases
86
General Motors: Like a Rock? (A)
86
Illinois Power Company (A)
88
CHAPTER 4

Private Politics

Introduction
Campaigns

82

Political Recourse 84

90

90
91

EXAMPLE: PIZZA HUT AND HEALTH INSURANCE REFORM

93

Private or Public Politics?

95
Activist Strategies
96
Advocacy Science 98 Target Selection 98
EXAMPLE: FISH FARM ACTIVISM

99

A Generic Strategy of Activists 100

Activist Organizations
101
0
Activists and Their Organizations 101 Greenpeace 102
Interacting with Activist Organizations
103
Assessment 103 Strategy and Negotiations 104
EXAMPLE: NEGOTIATING WITH ACTIVISTS: ONBANK

106

Challenging the Activists 106

Summary
107
Cases
109
Shell, Greenpeace, and Brent Spar
109
Nike in Southeast Asia
112
Anatomy of a Corporate Campaign: Rainforest Action Network and Citigroup (A)
Anatomy of a Corporate Campaign: Rainforest Action Network and Citigroup (B)

115
118

CHAPTER 5 Crisis Management

120
Introduction
120
The Nature and Causes of Crises
120
The Pattern of Crisis Development
121
EXAMPLE: PEPSICO AND THE SYRINGE EPISODE

124

Components of a Crisis Management Program

125
Avoidance 126 Crisis Preparedness 127 Root Cause Analysis 128
Summary
133

Response 129

Resolution 132

Contents vii
Cases
135
Buffalo Savings Bank (A)
135
Mattel: Crisis Management or Management Crisis
Merck and Vioxx
140
PART I

PART II:

136

Integrative Case: Wal-Mart: Nonmarket Pressure and Reputation Risk (A)

PUBLIC POLITICS AND NONMARKET STRATEGY

144

153

CHAPTER 6 Nonmarket Analysis for Business

153
Introduction
153
A Framework for the Analysis of Nonmarket Action in Public Politics
154
Interests and Interest Groups 154 The Amount of Nonmarket Action 155 The Demand for
Nonmarket Action 155 The Costs and Effectiveness of Nonmarket Action 156
The Distributive Politics Spreadsheet 158
The Nature of Political Competition
159
EXAMPLE: INTERNET WINE SALES

161

Institutions and Institutional Officeholders 162

Moral Determinants of Collective Action
162
Boeing in a Pickle
162
Analysis of Boeing in a Pickle
164
The Nonmarket Issue 164 Distributive Consequences 165 Boeing's Nonmarket Agenda and
Objectives 166 The Nature of the Politics 167 Interests and the Demand for Nonmarket Action 167
The Supply Side 167 The Distributive Politics Spreadsheet 168 Institutions and Institutional
Officeholders 168 Nonmarket Strategy Formulation 170 The Outcome 171
Summary
171
Appendix A: Nonmarket Action and the Free-Rider Problem
173
Appendix B: The Organization of Congress
175
Cases
181
Tobacco Politics 181
Scrubbers and Environmental Politics 183
Repeal of the Luxury Tax 184
CHAPTER 7 Nonmarket Strategies for Government Arenas
185
Introduction
185
Responsible Nonmarket Action
186
Criticisms of Business Nonmarket Action 186
Nonmarket Strategy Formulation
189
Managers and Nonmarket Strategies 189 Implementation 194
Understanding Outcomes
195
Generic Nonmarket Strategies
196
Representation Strategies 196
EXAMPLE: TOSHIBA AND TRADE SANCTIONS

Majority-Building Strategies 199

Nonmarket Strategies 203

197

Informational Strategies 202

EXAMPLE: CHINA AND MOST FAVORED NATION STATUS

Public Officeholders as Targets of

204

Institutions, Interests, and Strategy Choice

205
Institutions and Responsiveness 205 Interests: Client and Interest Group Politics 205
Summary
206
Appendix: The Politics of the Extension of Daylight Saving Time
208
Cases
212
Federal Express and Labor Organization 212
Carried Interest Taxation 213
Wal-Mart and Its Urban Expansion Strategy 217

 viii

Contents

CHAPTER 8 Implementing Nonmarket Strategies in Government Arenas

Introduction
220
Lobbying
220
EXAMPLE: PACIFICARE'S NONMARKET PORTFOLIO

220

221

The Nature of Lobbying 222 Technical and Political Information 223 Credibility and
Relevance of Information 224 Access 225 Timing and Focus 226 Government
Allies 226 Controls on Lobbying 226
Electoral Support
227
Myths and Realities of Campaign Financing 228 Election Financing Laws 228 The Pattern of
Campaign Contributions 229 Purposes of Campaign Contributions 230
Grassroots and Constituency Campaigns
231
Mobilization 231 Business Grassroots Campaigns 232 The Effectiveness of Grassroots Programs 232
Coalition Building
233
Peak Associations 233 Trade Associations 234 Ad Hoc Coalitions 235
Coalitions and Consensus 235
EXAMPLE: PHARMACEUTICAL POLITICS

236

Testimony
236
Public Advocacy
237
Judicial Actions
238
Organizing for Nonmarket Effectiveness
239
Developing Nonmarket Capabilities
239
Summary
240
Cases
242
Responsible Lobbying? 242
Internet Taxation 247
Pharmaceutical Switching 252
PARTII

PART III:

Integrative Case:FuelEconomy Standards2007

GOVERNMENT AND MARKETS

CHAPTER 9 Antitrust: Economics, Law, and Politics

Introduction
265
Antitrust Law
267
The Antitrust Statutes 267
EXAMPLE: MONOPOLY

259

265
265

269

Exemptions 269
Enforcement of the Antitrust Laws
270
Government Enforcement 270 Private Enforcement 272 Per Se Violations and the Rule of Reason 273
Antitrust Thought
274
The Structural Approach 275 The Chicago School 277 The New IO Approach 278
Examples of the Differences in Antitrust Thought
280
Vertical Arrangements 280 Predatory Pricing and Entry Deterrence 282 Collusion and
Price-Fixing 283 Mergers and Merger Guidelines 284
Compliance
286
The Politics of Antitrust
287
Summary
288
Cases
289
Price Fixing in the Airways 289
The Staples-Office Depot Merger? 290
The Microsoft Antitrust Case 294
CHAPTER 10 Regulation: Law, Economics, and Politics
302
Introduction
302
Periods of Regulatory Change
303

Contents ix
The Constitutional Basis for Regulation
304
Regulatory Commissions and Agencies
305
Delegation, Rule Making, Due Process, and Discretion
The Nonmarket Environment of Regulatory Agencies

306
307

EXAMPLE: REGULATORY RULE MAKING IN THE BUSH ADMINISTRATION

309

Explanations for Regulation

310
Market Imperfections
310
Natural Monopoly 310 Externalities 312 Public Goods 313 Asymmetric Information 313
Moral Hazard 314 Government Imperfections 315
The Political Economy of Regulation
316
Capture and Rent-Seeking Theories 316 Fairness 316 Other Public Purposes: Media Ownership
Rules 317 Preemption 318
A Nonmarket Theory of Regulation
318
EXAMPLE: THE POLITICAL ECONOMY OF REGULATION: ATVS

319

Redistribution and Cross-Subsidization 320

Cost-of-Service Regulation
320
Deregulation
321
Telecommunications 321 Electric Power 323 Auctions 324
Summary
325
Cases
326
The FCC and Broadband Regulation 326
Enron Power Marketing, Inc., and the California Market
330
The FCC Media Ownership Rules
332
CHAPTER 11 Environmental Management and Sustainability
337
Introduction
337
;
The Environment and Sustainability
337
Goals and Actions 337 Global Climate Change 338 Policy 338
Socially Efficient Control of Externalities
340
The Coase Theorem 340
EXAMPLE: THE COASE THEOREM

Tradeoffs 339

342

Transactions Costs and the Limits of the Coase Theorem 343

Cap-and-Trade Systems
344
>
Cap-and-Trade Systems to Address Acid Rain 345
Global Climate Change and Emissions Trading Systems
346
The United States and Carbon Emissions 347 Emissions Trading in the European Union 347
Emissions Trading Within BP pic (British Petroleum) 348
Regulation as Opportunity
348
Government Policy: The EPA
349
Enforcement 350 Standards Setting and Engineering Controls 351 Incentive Approaches 351
EXAMPLE: INTEL AND THE PROJECT XL

352

Superfund 352 State Policy Initiatives 353

The Political Economy of Environmental Protection
353
The Nature of Environmental Politics 353 Judicial Politics 354
Distributive Politics 355 Private and Public Politics 356
EXAMPLE: THE EQUATOR PRINCIPLES

357

NIMBY and Private Politics 358

Management of Environmental Protection Issues

359

EXAMPLE: DOW CHEMICAL AND LOCAL ENVIRONMENTALISTS

EXAMPLE: MCDONALD'S AND WASTE REDUCTION
362
EXAMPLE: ENVIRONMENTAL ACTIVISM AT HOME DEPOT

Voluntary Collective Environmental Programs

Summary
365

364

363

361

Advocacy Science 354

 X Contents
Cases

366

Regulation as Opportunity: Cummins Inc.

366
Emerging Nanotechnology Regulation: Samsung's SilverCare Washing Machine
Environmental Justice and Pollution Credits Trading Systems
370

368

CHAPTER 12 Law and Markets

374
Introduction
374
The Common Law
375
Property
376
Bargaining 376 Incentives and Appropriability 377
Intellectual Property
377
Intellectual Property Protection 378
EXAMPLE: INTELLECTUAL PROPERTY ENFORCEMENT AND DIGITAL PIRACY
EXAMPLE: MICKEY MOUSE POLITICS AND LAW

Contracts

379

381

383

EXAMPLE: GENENTECH AND CITY OF HOPE

384

Enforceability 385 Breach 385 Remedies 385

Torts
386
The Product Safety Problem and Social Efficiency
387
Entitlements, Liability, and Social Efficiency
389
Entitlements and Their Protection 389 The Assignment of Social Costs and the Choice Between Liability
and Regulation 391
Products Liability
392
The Development of Products Liability Law 392 Allowable Defenses Under Strict Liability 395
Preemption 396 Damages 397 The Politics of Products Liability 398
Imperfections in the Liability System
399
EXAMPLE: SILICONE BREAST IMPLANTS

401

Summary
403
Cases
404
California Space Heaters, Inc.
404
Patent Games: Plavix
406
Obesity and McLawsuits
408

CHAPTER 13 Information Industries and Nonmarket Issues

Introduction
413
The Economics of Online Markets
414
Internet Privacy
417
EXAMPLE: GOOGLE: GMAIL AND PRIVACY

The Internet and Tax Policy

Online Communities
425
Summary
427
Cases
428

419

423

DoubleClick and Internet Privacy

428
eBay and Database Protection
433
eBay: Private Ordering for an Online Community

438

PART III Integrative Case: Credit Card Regulation

PART IV:

445

GLOBAL NONMARKET STRATEGY

CHAPTER 14 The Political Economy of Japan

Introduction
451
Issues
452
Interests
454

451

451

413

Contents xi
Institutions
455
The Diet 455 Political Parties and the Electoral System 456 The Bureaucracy 458
Political Reform 460
The Judicial System and the Antimonopoly Law
462
Cultural Foundations
462
Tying the Components Together: A Framework of Political Exchange
464
Political Exchange 464
Characteristics of Business
466
Business-Government Interactions
467
The Organization of Business for Nonmarket Action 467 Nonmarket Strategies 468
Relationships with the Bureaucracy 469 Lobbying and Points of Access 470
Information 471 Corporate Nonmarket Styles 471
Summary
472
Cases
474
The Breakup of Nippon Telephone and Telegraph? 474
The Privatization of Japan Post
476
Uniqlo: Success Breeds Nonmarket Challenges 479
CHAPTER 15 The Political Economy of the European Union
481
Introduction
481
The European Union
481
The Single European Act 482 The Maastricht Treaty 483
The Institutions of the European Union
484
The European Commission 484 The Council of Ministers 485 The European Parliament 486
The Court of Justice 487 The European Economic and Social Committee 487 The EU Legislative
Process 488 Economic and Monetary Union 488 The EU Constitutional
Treaty 490 Competition Policy 490
EXAMPLE: MICROSOFT ANI> EU COMPETITION POLICY

493

State Aids and the Common Agricultural Policy 494 The Social Charter, Social Democracy, and Labor
Markets 494
Nonmarket Issues
496
Interests and Their Organization
498
Nonmarket Strategies in the European Union
499
EXAMPLE: PRONUPTIA AND FRANCHISING

504

Summary
505

Cases
506
The European Union Carbon Tax 506
The European Union Data Protection Directive 509
Aldeasa and the EU Duty Free Abolition (A)
511
CHAPTER 16 China: History, Culture, and Political Economy
517
Introduction
517
Historical Background
518
Pre-Republican 518 The Communist Era 520 The Reform Era 521
Confucianism and Social Explanations
523
Applications in Society, Politics, and Business 525
The Nonmarket Environment and the Four Fs
527
Institutions and Government 528 State Institutions 530 Provincial and Local Governments 531
Business: State-Owned Enterprises, Foreign Direct Investment, and International Trade
532
State-Owned Enterprises 532 Foreign Direct Investment 533 International Trade Policy and
WTO Membership 534 Regulation 535
Continuing Issues
535
Human Rights 535
EXAMPLE: AN INTELLECTUAL PROPERTY CHALLENGE

Energy and the Environment 539

537

 xii Contents
Summary
540
Cases
541
Wugang and the Reform of State-Owned Enterprises
Direct Selling in China
543
Google in China
545

541

CHAPTER 17 Emerging Markets

549
Introduction
549
Country Assessment
549
Individual Freedoms 550 Economic Freedom 550
Competitiveness 551 Culture 551
Opportunities
551
EXAMPLE: INDIA

Corruption 550

Political Risk 551

552

Opportunity at the Bottom of the Pyramid? 553 River Blindness 553 Fair Trade 554
Microfinance 556 Underdeveloped Markets and Business Groups 557
Risk Assessment
558
Causes and Types of Risks 559
Management in the Nonmarket Environment
562
Summary
563
Cases
564
Tesco PLC in India?
564
Social Entrepreneurship: Banco Compartamos 567
Social Entrepreneurship: Kiva
568
MTN Group Limited
570
CHAPTER 18 The Political Economy of International Trade Policy
574
Introduction
574
The Economics of International Trade
575
Competitive Theory 575 Strategic Trade Theory 578
The Political Economy of International Trade Policy
579
The Dual Nature of the Politics of International Trade 579 Asymmetries in the Politics 580
International Trade Agreements
581
The World Trade Organization 581 General Agreement on Trade in Services (GATS) 582 TradeRelated Aspects of Intellectual Property Rights (TRIPS) 582 Agriculture 583 Government
Procurement 584 Antidumping, Countervailing Duties, and Safeguards 584 Dispute Settlement 584
The Doha Round of WTO Negotiations 587 Other Trade Agreements 588
U.S. Trade Policy
588
The Structure of U.S. Trade Policy 588 U.S. Trade Law and Its Administration 589
The Political Economy of Protectionism
590
Formal Policies 590 Channels of Protection 591
EXAMPLE: STEEL IMPORTS AND THE NONMARKET CAMPAIGN

592

The Political Economy of Market Opening

594
The North American Free Trade Agreement 594 Market Opening Under the Threat of Retaliation 595
Summary
596
Cases
597
Cemex and Antidumping
597
Compulsory Licensing, Thailand, and Abbott Laboratories 602
Sophis Networks and Encryption Export Controls (A)
607
PART IV Integrative Case: Toys 'JP Us and Globalization
614

PART V:

ETHICS AND CORPORATE SOCIAL RESPONSIBILITY

CHAPTER 19 Corporate Social Responsibility

Introduction
619
The Trust Gap
620

619

619

Contents xiii
What Is Corporate Social Responsibility?
621
Milton Friedman's Profit Maximization 621
Compliance with the Law
625
Stakeholder Theory
626
The Business Roundtable Statement on Social Responsibility
628
Discussion 629
Corporate Social Responsibility and Corporate Social Performance
EXAMPLE: TUNA AND DOLPHINS

630

631

A Framework for Corporate Social Performance

632
Terminology 632 The Setting 632 Motivations for CSP 633 Rewards 634
Summary 635 Empirical Research 635
Corporate Governance
637
Social Accountability 637 The Duties of Boards of Directors 638 Sarbanes-Oxley 639
The Market for Control 640
Summary
641
Cases
642
The Collapse of Enron: Governance and Responsibility 642
Wal-Mart: Nonmarket Pressure and Reputation Risk (B):A New Nonmarket
Strategy 647
Playing by the Rules?
650
CHAPTER 20 Ethics Systems: Utilitarianism
Introduction
653
The Managerial Role of Ethics
653
What Ethics Is and Is Not
654
Personal and Business Ethics
655
Ethics and Private Interests
655
Ethics, Politics, and Change
655
Casuistry
656
EXAMPLE: SAVING THE DIVISION

653

657

The Methodology of Ethics

657
The Relationships Among Moral Philosophy, Ethics, and Political Philosophy
659
Utilitarianism: A Consequentialist System
660
Utilitarianism and Self-interest 661 Aligning Self-interest with Societal Well-Being 661 Utilitarianism,
Distribution, and Altruism 662 Summary of the Components of Utilitarianism 662
Utilitarian Duty and the Calabresi and Melamed Principles
662
Act and Rule Utilitarianism
664
Jointly Determined Consequences 665 Decision Making in the Face of a Moral Transgression 666
Utilitarianism and Rights
666
Criticisms of Utilitarianism
667
Philosophical Criticisms 667 Interpersonal Comparisons of Utility 668 Identifying Costs and
Benefits 668 The Measurement Problem 668 The Information Problem 669
Utilitarianism in Application
670
Categories of Situations 670 Methodology 670
EXAMPLE: LIVING BENEFITS
671
EXAMPLE: INTEGRITY TESTS
672
EXAMPLE: LIFE INSURANCE SCREENING FOR PREEXISTING CONDITIONS
EXAMPLE: REDLINING

673

Summary
674
Cases
675
Pricing the Norplant System
Tax Shelters 677
Pfizer and Celebrex 679

675

673

XIV

Contents

CHAPTER 21 Ethics Systems: Rights and Justice

Introduction
681
Classification of Ethics Systems
681
Classes of Rights
682
Kantian Maxims or Moral Rules
683
EXAMPLE: LIVING BENEFITS

681

684

The Relationship between Maxims and Rights 684

Criticisms of Kantian Rights 687
EXAMPLE: PRIVACY

Intrinsic and Instrumental Rights 685

688

Applied Rights Analysis

689
Claimed and Granted Rights 689
EXAMPLE: LIFE INSURANCE SCREENING FOR PREEXISTING CONDITIONS

691

A Methodology for Rights Analysis 691

Conflicts Among Rights
691
Rights and Interests 692 Prioritization 692
EXAMPLE: INTEGRITY TESTS

693

Equal Employment Opportunity

694
Disabilities and Rights
696
Neoclassical Liberalism
697
Categories of Justice Theories
698
Distributive Justice 698 Compensatory Justice 699 Injustice 700
Rawls 's Theory of Justice
700
The Framework for Justice as Fairness 700 The Principles of Justice 702
Incentives 703
EXAMPLE: LIVING BENEFITS

The Role of

704

Duty in Rawls's Theory 704

EXAMPLE: CLINICAL TRIAL OBLIGATIONS

Criticisms of Rawls's Theory 705

705

Applying the Principles of Justice 706

EXAMPLE: AFFIRMATIVE ACTION

707
EXAMPLE: INTEGRITY TESTS
709
EXAMPLE: REDLINING
709
EXAMPLE: LIFE INSURANCE SCREENING FOR PREEXISTING CONDITIONS

Higher Order Standards for Evaluating Ethics Systems

Summary
710
r
Cases
712

710

710

Genetic Testing in the Workplace 712

Citigroup and Subprime Lending 714
Consumer Awareness or Disease Mongering? GlaxoSmithKline and the Restless Legs Syndrome
CHAPTER 22 Implementing Ethics Systems
Introduction
720

720

EXAMPLE: LEVI STRAUSS & COMPANY AND GLOBAL SOURCING

Moral Determinants of Nonmarket Action

EXAMPLE: CIRCLE K'S HEALTH CARE POLICY

721

722
723

The Challenge of Corporate Social Responsibility

724
Corporate Social Responsibility and Ethics in Practice
726
EXAMPLE: UNOCAL CORPORATION AND THE DIRTY CAR BOUNTY
726
EXAMPLE: SOUTH SHORE BANK AND COMMUNITY DEVELOPMENT
727
EXAMPLE: BP AND SOCIAL RESPONSIBILITY
727
EXAMPLE: WAL-MART REPUTATION AND STAKEHOLDER MANAGEMENT
EXAMPLE: CITIGROUP: RESPONSIBILITY UNDER FIRE?
730
EXAMPLE: JOHNSON & JOHNSON'S "OUR CREDO"
731

728

Core Principles and Their Evolution 731 The Body Shop and the Social Audit 732 Codes of
Conduct 733 Competitive and Proprietary Information 734 Principles and Reasoning 734

716

Contents XV
Tensions in the Implementation of Ethic Principles
735
Paternalism 735 Nonmarket Action and Restraint 736
Sources of Unethical Behavior
738
Summary
739
Cases
740
Denny's and Customer Service 740
Gilead Sciences (A): The Gilead Access Program for HIV Drugs
Advanced Technology Laboratories, Inc.
746
CHAPTER 23 Ethics Issues in International Business
Introduction
749
International Law and Institutions
750
Cultural Relativism
751
Human Rights and Justice
754
Slave Labor in Saipan? 754
Operating in Developing Countries
755
AIDS and Developing Countries
756

742

749

EXAMPLE: GLAXOSMITHKLINE AND NONMARKET SPILLOVERS

757

Responsibility for Working Conditions in Suppliers' Factories

758
Sweatshops 758 Private Governance and Self-Regulation: The Fair Labor Association 759
Company Responses 759
International Codes
761
Questionable Foreign Payments and Corruption
761
Questionable Payments and Ethics Principles 762 The Lockheed Case 763 A Utilitarian Analysis
of Bribery 764 The Foreign Corrupt Practices Act 766 Company Codes 767 Cummins's
Practice 768 The OECD Anti-Bribery Convention 769
Summary
770
Cases
772
Complications in Marnera 772
De Beers and Conflict Diamonds
773
. Siemens: Anatomy of Bribery
774
PART V
References

Integrative Case: GlaxoSmithKline and AIDS Drugs Policy

784

Index

796

778