ETHICS AND SOCIAL RESPONSIBILITY OBJECTIVES OF THE CHAPTER The current concern that all businesses and the general public have for ethical behavior nd social responsibility is not restricted to the domestic situation. In this era ofa global sconomy, MNCs must be concerned with how they carry out their business and their so al role in host countries. This chapter examines business ethics and social responsibility in the international arena, and it looks at some of the critical social issues that will be con- fronting MNCS in the years ahead. The discussion includes ethical decision making in ‘atious countries, regulation of foreign investment, and current responses to social te sponsibility by today’s multinationals. The specific objectives ofthis chapter are: 1. EXAMINE some of the major ethical issues and problems confronting, MNCs in se- lected countries, 2. EXPLAIN some of the ways that host countries are attempting, to regulate foreign in ‘estments and why reciprocity is such an important trade issue 3. DISCUSS some of the actions being taken by selected industrialized countries to be "more socially responsive to world problems, 479480 INTERNATIONAL MANAGEMENT HORIZONS. ETHICS AROUND THE WORLD The ethical behavior of business has become a major issue. In the United State, insider trading scandals, bribes, and the MAD syndrome (Mergers, Acquisitions, and Divestitures) have received considerable media attention and aroused te public's concern about ethics in international business. Ethics isthe study of morality and standards of concluct. Ethics is important in the study of international management, because ethical behavior in one count sometimes is viewed as unethical behavior in other countries. Considerable atter. tion has been given in the management literature to ethical problems in the United States; not so well known are the ethical issues in other pars ofthe world. The fol lowing sections examine some of the ethical problems that occur in international business in selected countries Ethical Problems and Concerns in Japan In terms of both internal and external business relations, Japan, like the United States, has had more than its share of ethical problems in recent years. Some of the most devastating and widely publicized have occurred in both the political and business arenas. Political and Business Scandals Several years ago, Japan was rocked by a bribery scandal involving the Recruit Company. In an effort to curry favor, this firm had been giving politicians and influential businesspeople an opportunity to buy cut-rate stock in a Recruit real estate subsidiary. The shares eventually were listed on the public stock exchange, and the early stockholders, many of whom ‘were these targeted people, made large returns on their investment. When this in- formation became public, some members of the cabinet, including the prime min- ister, were forced to resign. ‘Since this time, there have been additional scandals. One of the more recent has been a bribery scandal involving ruling-party politicians. In this case, Japanese politicians received money from a property developer in return for helping to re- solve legal problems arising from a contract linked to building a factory? In an- other case, the official charged with running the ruling Liberal Democratic party admitted that he took campaign contributions from the head of a trucking concern and failed to report these funds.” Another major scandal in Japan has involved stock brokers, politicians, and mafia (or “yakuza”) members. Some of the country’s largest brokerages have been accused of giving inside stock tips to important politicians in return for favors Another charge has been that of reimbursing influential customers for losses in the stock market. A third charge leveled at one brokerage was that it did special favors, such as manipulating stocks owned by members of the mob and financing their fees for golf club applications. These charges resulted in resignation of the heads of two of the largest securities firms in the country. More recently, some security firms have been investigated for allegedly agree- ing to buy stocks at an inflated price, with the understanding that these securities would be bought back by the original seller at a higher price.” Instill another case five former officals of a Japanese futures investment firm were arrested for a legedly defrauding customers of almost $100 million by withholding funds it- tended for investment in Hong Kong sugar futures. In a third case, Japan’s FaiETHICS AND SOCALRESPONSIELITY 481 Fighting Back Aninereasing numberof working women in Japan fe! thay |, tect o axial harasanat. For example, oe female | Stecutve ata prestigious TOK serve company found | Stes on er desk ang so har sax if. Male colleagues | lnned up are centro reserbing the woman and on Srother occasion, they wrote te woman's nae the op fa dagram of ahuman bra, ideaing whi lobes dove her soxal obsessions, When tho woman prtete, she {es tanforedto another post andthe men were not di Sine Commenting on the pctor, te femal acute feted that she spent halo her energy tying to cae wth | te uration, wile er bosses acted as though the sa fon was something she would have to soe by here This 5078 eny eprsenttive of wht many Japanese omen ave 08d ovr the years. n facta recent Labor Minty fal raves that 2 percent of al women in management pontlons complan of sexial harassment Oni recent have thy ape aut and iesto do somtring Now thee trea gronng number of lavas charging fms with soa or seni Rarassment and seal crrination in adston oth egal acon being taken by Japanaco omen afarst ther employer, femsle smpiajee from hor courts who work for Japanaseased! mtinton- Sis aso are begining fot back. For example, some ‘Japanese firms in the United States have been ht with sex: ual harassment charges. Sumitomo Corporation, the giant traging firm, faces a complaint before the Equal Empioy- ment Opportunity Commission that its Chicago office ‘abused a female U.S. employee who worked as a sales as- Sistant. The woman charges that Japanese managers lowed pornographic materials to be ckculated and that one ‘anager continually asked her for pictures of hese in & bathing suit. The woman also has charged the fem with gi Ing her only token promotions. In another case, C. toh & Company is new tying to reach an out-t-court sattiement vith female employees at its New York offce. The UL. women employees have inated a classaction suit charg- ing the Japanese fr with sex discrimination. “The lawsuts in the Urited States are more damaging to Japanese multinationals, because thay ara being fled in a Country where sexual harassment is rowed an and courts are prepared to assess heavy damages against companies that break the law. In Japan, however, many firms sb be- love that this issue isnot a serious one. One Japanese lawyer recently stated that companies n Japan are lily to tty to handle the problem without making any significant ‘changes in the way things are done. If this is true, com- plains, lawsuits, and pressure on corporate Japan will un- ‘doubtedly continue untl equalty in the workplace receives ‘moe attention and steps are taken to rectiy @ very real problem, ‘Trade Commission began an investigation into allegations that the country's ma- jor makers of printing ink had conspired to raise prices. Changing Social Climate in Japan ‘The developments noted earlier have helped to focus the attention of many MNCs on the changing social environment in Japan. The role of business ethies in the coming years likely will differ sharply from what it has been in the past, Previously, Japanese politicians and business- People thought nothing of giving favors to each other and looking for reciprocity but this behavior appears to be changing, Influence pedaling (trying to influence others through reciprocal favors) in Japan now is serious business, and everyone from the president of a foreign MNNC to the head of huge domestic corporations such as NTT will be held to the same high standard of ethical behavior. Prejudice and Discrimination in Japan Another area where Japan has faced ethical problems is that of prejudice and lscrimination. One of the most common amples is sexual harassment in the workplace, an issue on which more and more Japanese women are fighting back, as discussed in the accompanying box, “International Management in Action: Fighting Back.” In one recent case, a Woman won a judgment of $12,500 from her company. This was the first lawsuit ver filed in Japan charging sexual harassment, and it set off a wave of concern.*482 INTERNATIONAL MANAGEMENT HORIZONS Within 48 hours of the verdict, the government hac! issued 10,000 copies of a book. let on sexual harassment, and all were quickly snapped up. Besices sex discrimination, some Japanese firms also are having problems deal. ing with minority workers. Comments made by Japanese political figures about African-Americans and Hispanics, for example, have been criticized for their dis- criminatory meaning.” Japanese businesses also have been known to engage in in. sensitive racial stereotypes. For example, a Japanese department store drew fire 4 few years ago for displaying mannequins with distorted stereotypes of black faces, and an entertainment company provoked protests by selling, Little Black Sambo dolls." The biggest furor, however, has been created by Japanese firms’ attempts to keep minority hiring to a minimum. For example, evidence shows Japanese firms that set up operations in the United States tend to favor areas where minorities in general, and African-Americans in particular, are not situated." Most people live ‘within 30 miles of their job site, and national census data show that the propen- sity to commute declines rapidly once one goes beyond this limit. One analysis found that Japanese assembly plants and supplier plants in North America are less likely to set up operations within 30 miles of areas inhabited by minorities, ‘The researchers made observations such as the following: In the course of our research, we heard Japanese managers specifically explain their de cisions on plant siting in such terms... . Des Rosiers, who has carried out several site studies for Japanese auto companies, added: “They ask for profiles of the community by ethnic background, by religious background, by professional make-up... . There are de- mographic aspects that they like. They like a high German content... [The Japanese] probably don’t like other types of profiles.” Ina similar vein, a midwestern state official responsible for recruiting Japanese firms to his state in the early 1980s reported to us that “many Japanese companies atthe time specifically asked to stay away from areas with high minority populations This study provided further evidence for prejudice and discrimination when the percentage of African-American in the local area was compared with the per- centage that were employed by Japanese firms. The results showed that African- Americans were consistently underrepresented in the Japanese plants. Legal ac- tion stemming from discriminatory employment practices has been successful against some Japanese firms in the United States. For example, several years ag0, Honda of America Manufacturing, Inc. agreed to give 370 African-Americans and women a total of $6 million in back pay to resalve a federal discrimination com plaint, and Sumitomo Bank's US. operation was handed a $2.6 million sex dis- crimination verdict These examples and empirical evidence indicate that Japanese firms in the United States have had more than their share of problems in dealing with the hit- ing and treatment of minorities and women. More important, unless Japanese firms change their approach, these problems will grow worse during the coming, years, because equality in the workplace continues to be a central social issue and indicator for social responsibility of business in the United States.” In fairness to the Japanese, however, it should be noted that they are making an effort to im- prove equality in employment, and their concern for the safety and health of workers may be unmatched anywhere in the world." Social Responsibility Implications from Lobbying Another area of growing ethical concern is the Japanese lobbying effort in the United States."* Japan, more(CHAPTER 17; ETHICS AND SOCIAL RESPONSIBILTY 483 than othér countries, spends millions of dollars every year for lobbying in Wash- ington. For this money, Japanese firms have been able to hire very savvy, effective Jobbyists, and these investments seem to be getting results. For example, when the Japanese firm Toshiba sold defense-sensitive, high-tech milling equipment to the former Soviet Union, the Japanese lobby in Washington was able to defuse the is- sue effectively. The lobbyists persuaded those writing sanctions into a final trade bill to water down the penalties for Toshiba ‘The Japanese also have been very effective in lobbying at the state and local lev- els. Here are two examples: In Illinois, where Mitsubishi Corp. opened 2 $650 million auto plant with Chrysler CCorp., Mitsubishi executives became a driving force behind the month-long Festival of Japan. Working through the Chicago Japanese Chamber of Commerce and the Japan- ‘America Society, in cooperation with the Japanese consul-general, they raised $1.2 mil- lion for the festival. The highlight of the event: a vist by then Prime Minister Nobors ‘Takeshita to meet Illinois Governor James R. Thompson and other luminaries, In the southeast, Japan's regional effort is assisted by former Georgia Governor George Busbee, a founder of the Japan/US, Southeast Assn, which groups top Japa- nese and Southeastern political ane business leaders, When a Washington problem arises, these regional networks are in place to help Japan. Says TRW's Choate [a well- known trade expert), “The Japanese government and Japanese companies are infinitely ‘more effective in lobbying in this town [than US. companies)" Is it ethical for Japanese firms to hire bank-rolled, well-connected, talented lob- byists to argue their case in Washington? Is it ethical for former US. cabinet offt- cers and elected officials to become lobbyists for Japan? Recall the furor over ex- President Reagan's receiving millions of dollars for his speaking engagements in Japan soon after he left office. Certainly, these activities are legal. Many Americans feel that the interests of the United States and Japan are not the same when it comes to business dealings, however, and that Americans are being shortchanged in the process. To the extent that these feelings (some would call them latent racism)'” persist, Japanese lobbying will continue to be an area of ethical concern during the years ahead. 4 The Status of Women Managers in Japan The number of women in manager- | ial positions in Japan has been increasing in recent years, but statistics reveal that | these opportunities still are quite limited and, similar to the US., a “glass ceiling” exists, For example, in 1979, as part of the background research for the forthcom- : ing Japanese Equal Employment Opportunity Law, a cabinet-level commission surveyed companies listed on the stock exchange and special corporations in three ‘major urban centers. The data revealed that of the 1497 companies surveyed, the average firm had 3321 employees, and of these, 242 were in management posi- tions. Women, however, constituted 23 percent of the work force of these large firms—but only 0.3 percent of those in decision-making positions. Since then, follow-up studies have tried to determine whether Japanese women Were making any headway in large firms. In 1981, the same cabinet-level com- mission found that the number of women employees had grown to 40 percent of the work force in these large firms—but still only 0.5 percent of the management group. A 1984 study found a very slight improvement, but women still repre- | sented less than 1 percent of management. In a 1989 update, the Women’s Bureau surveyed 7000 Japanese companies with 30 or more employees. This study was conducted 3 years after the Equal Employment Opportunity Law went into effect. '4840 paRTs: INTERNATIONAL WANAGEMENT HORIZONS Inthe largest frm, the Bureau found that 12 percent of companies with more than “100 workers and 67 percent of those with 1000 to 4999 workers had woman the division-hend level, For women at the section-head level, the rates were at Percent for companies with over 300 workers and 25 percent for those with 10) {o 4999 workers. For women atthe first supervisory level, which represents the Pool from which managerial personnel will be selected in the futur, the ae were 72 percent of companies with 5000 or more employees and 52 percent ot companies with 1000 to 4999 employees. Overall, the japanese Women’s Burton concluded! These gure area remarkable improvement over the situation reported in 196. They all refer, however tothe percentage of companies that report having any women at] in theic managerial ranks. The actual percentage of women in these postions reraing minuscule, According tothe national wage census for 1989, in companies employing 1.000 oF more persons, only 0.36 percent of division heads and 0.13 percent of sce heads were women but women held 36 percent ofthe... subsection-head positions By the most generous measure, women occupied only 22 percent of managerial positn, in companies with 1000 or more employees." There are a number of reasons for the lack of progress among women in large Japanese firms. One is that they often are excluded from transfers to branch offices OF posts far away from their homes. As a result, they are unable to acquire the range of experience needed for promotion to upper-level managerial positions Among those Japanese women who have been able to achieve managerial rank in large corporations, there is evidence that they have done so only after long ser vice to the company and often at the expense of marriage and motherhood. The fastest road to the top for Japanese women appears to be in small businesses, where they are able to play an important role and are recognized for their achieve. ments. The opportunities do not seem to be as promising in large firms, despite the enactment of the Equal Employment Opportunity Law that was supposed to help reduce barriers to promotion. In fact, under current interpretations of this law, firms can require women to commit themselves at the time of hiring to either (1) a traditional track with good benefits but no promotion opportunities; or 2) a career track with more rigorous standards and opportunities ostensibly equiva- lent to those offered to male permanent employees. Since most women are un- willing to opt for the latter track, businesses feel they can legitimately refuse to Promote them to higher level positions. Moreover, because few women work in government ministries that could put political pressure on companies to alter. their current practices, there appears to be little likelihood that things will change in the near future. About the only major development that could change this bleak picture for Japanese women may be the inereasing demand for skilled employees and the growing labor shortage now being brought about by declining birth rates. Commenting on this development in Japan, Steinhoff and Tanaka recently pre dicted: ‘The labor shortage will not only increase employment opportunities for women in large companies but will atthe same time lead to changes in the way large companies utilize their managerial employees. The companies assume that women are unwilling OF able to meet the high time and energy commitments the current managerial system de ‘mands, but young men are also increasingly reluctant to pay the price. As the compat nies reduce working hours, social demands, and arbitrary transfers in order #9 KeeP ; their male managers, they will also be creating a more favorable working environmentCHABTER 17: ETHICS AND SOCAL RESPONSIOLITY 485 for women. Thus Japan appears tobe at a turning point, with several factors converging 'o change both the opportunity structure and the work environment for women in mane agement." Ethical Problems and Concerns in Europe Ethical behavior in European countries is an important area of interest in interna- tional management, Because in some respects, these countries differ sharply from Japan and the United States.™ France and Germany are good representative ex. amples. One study surveyed 124 US,, 72 French, and 70 German managers." Each was asked to respond to a series of five vignettes that examined ethical situations re, lated to coercion and control, conflict of interes, the physical environment, pater- nalism, ancl personal integrity. In most cases, the U.S, managers’ responses were quite different from those of their European counterparts. The following is an ex. ample of one of the vignettes: Rollfast Bicycle Company bas been barred from entering the market in a large Asian country by collusive efforts ofthe local bicycle manufacturers. Rolfast could expect to net 5 million dollars per year from sales if it could penetrate the market. Last week » businessman from the country contacted the management of Rollfast and stated that he could smooth the way for the company to sellin his country for a price of $500,000. ‘The executives from the three countries were asked how they would respond to the request for payment. The Americans were opposed to paying the money; 39 Petent of them said that a bribe was unethical oF illegal under the Foreign Cor- rupt Practices Act, Only 12 percent of the French managers felt that way, and none of the Germans agreed. However, 55 percent of the French and 29 percent of the Germans said that paying the money was not unethical but merely the price to be paid for doing business. Part of the reason for these answers is that to date, neither France nor Germany has laws that make it a crime to bribe or corrupt a public or private official of an- other country. Legal restrictions are not the only reasons for the differences in ‘managerial views of ethical behavior, however, Here is the conflict-of-interest vi pnette that was presented to the managers: Jack Brown is vice president of marketing for Tangy Spices, «large spice manufacturer Jack recently joined a business venture with Tangy’s director of purchasing to import black pepper from India. Jack’s new company is about to sign a five year contract with Tangy to supply their black pepper needs. The contract i set ata price 3 cents per pound above the current market price for comparable black pepper imports” Should Brown sign the contract? Once again, the managers were divided regard ing what should be done ancl why. Most U.S. managers felt that signing the con. tract would be dishonest or a conflict of interest. Many of the French managers asreedi, but only one-third of the Germans indicated that they would not sign the agreement, Summing up the responses of the managers to all five vignettes, the researchers concluded lone were to generalize, the US, managers were noticeably more concerned with eth “al and legal questions. Their French and German counterparts appeared to worry486 PARTS: INTERNATIONAL MANAGEMENT HORIZONS ‘more about maintaining a successful business posture, To e sure, there was some over. 8: Ps over lapping of responses; however, the dtferences remained.” This cross-national research on ethical behavior shows that MNCs must be aware that the ethical practices oftheir home country may be quite different from, those of countries where they do business. A number of reasons account for these differences, including culture, personal values, incentives, and the obvious legal restrictions. ‘The Status of Women Managers in Europe Because most European countries have experienced only limited population growth in recent years, integration of women into the work force has become a critical goal. Similar to the United States and Japan, however, European women have encountered equal opportunity problems and a “glass ceiling” in the man. agerial ranks. The following discussion examines the current status of women ‘managers in three major European nations: France, Germany, and Great Britain, France The proportion of French women in the labor force from 1900 until 1979 remained at about 35 percent. Since then, however, more than 2 million women have entered the work force, compared with less than 200,000 men. This trend ‘would seem to indicate that women now should be gaining a greater foothold in the managerial ranks—and to a degree, this is true. Over the last 35 years, the number of women managers has increased almost ninefold, while the number of ‘managerial positions has increased fivefold. The greatest gains have been in prod- uct promotion and sales, import-export, sales administration, real estate, urban planning and architecture, socioeconomic studies, and chemistry. Table 17-1 pro- vides some of the latest available cata on French managers by function. Although French women are making strides in the management ranks, they still are underrepresented in corporate management. Table 17-1 shows that women still are far behind men in terms of corporate management and the tradi- tional functions of manufacturing and sales. A number of reasons are given for this underrepresentation. One is that promotion into top management depends on more than diplomas, abilities, and ambitions As in the United States and Japan, French women face many obstacles when trying to break the glass ceiling, As one analysis of women managers in France notes; Being a manage incades having to work long hour, travel, make difcult decisions! tmotvate people, and achieve high bjsctives “most often with limited resources and strong business competitors, For women manages it also often means ghting thin their own company to establish a reputation asa leader—since women are rarely spot taneously seen as leaders avoiding or responding appropriately to Sexist ceca tvating employees to accept and execte ther decision, and sometimes hiding thet iamily problems. Women frequently have more dificult than men getting acess 0 formation necessary to make wise corer decisions. Although its important for women to understand the organization's carer cir, few companies in France provide such information through ether equal opportunity managers or assertiveness courses™ Froma legal standpoint, French law guarantees equal treatment and equal pro- fessional opportunities. Enforcement of these guarantees is fairly weak, howevel, and organizations that could be valuable to women generally are uninvolved. Fot example, unions have generally resisted taking on women’s issues, and there afonneren 17 Tics ano soci ResPoxsiouTy 487 Function Percentage of women Percentage of men Corporate management 29 66 Manufacturing, construction 22 107 Manufacturing support services 24 a5. esearch, dovelonmant 79 129 Marketing Sales 199 ara Banking, insurance, rel estate, 40 44 tourism, transportation Administration 184 61 Finance, accounting, contol 86 57 Information ystems 78 97 Personnel, education 7 a7 (Communications 87 18 Medical, social, culture oa 24 Others 28 14 Total 100.0 1000 eee ‘The total i tas tan 100 becaute of rounding, ‘Source: Helene Alexandre, Les Fermes Cazes [Women Manages. Pas: APEC, 1850. zo organizations in France comparable to the Coalition of Labor Union Women in the United States that could promote equal opportunity issues. Even French asso- ciations of women managers are limited in their efforts and, for the most part, fo- us primarily on social networking, So, while some French companies have pro- ‘moted women into higher-level positions and have affirmative action programs in place, these firms unfortunately still are the exception rather than the rule. As one analyst recently put it, “Companies’ needs for the best possible managers will fa- vor highly qualified women; but to succeed, these women will most likely have to accept even more difficult working conditions.” Germany Before unification, 47 percent of working-age women in West Ger- many and 91 percent of those in East Germany were in the work force. In both West and East, however, women held few top management positions. Studies of large West German firms found that 5.9 percent of top managers and 7.8 percent of managers at the next level were women, but only 0.7 percent were members of managing boards of public companies. [n East Germany, one-third of all manage- ment positions were held by women, but these primarily were low-level jobs. With the unification of Germany, the status of women in management does not look any more promising, One reason is that professional qualifications appear to relate inversely to hierarchical position. Antal and Krebsbach-Gnath explained this seeming paradox as follows: ‘The higher the position, the less significance the organization attaches to... “objective” ériteria. The factors that receive more weight in promotion decisions for senior manage- ‘ment positions are both less objective and more often based on traditional male career Patterns. In effect, therefore, they discriminate against women. Among the factors listed488. pants: IVTERNATIONAL MANAGEMENT HORIZONS in one study for promotion into upper-level management were professional com, tence, effectiveness, professional experience, length of experience, time with the cue pany, commitment to the jo, and professional and regional mobility. To the extent the: “objective” factors and qualifications, such as education and training that women car consciously acquire, play a lesser role in decision making, other sociopsychological and systemic factors assume increasing importance and create less easly surmountable bar, riers to carver development for women Unlike some other countries, Germany in the last decade has introduced laws that mandate equal opportunity and the creation of equal opportunity positions throughout the public sector. Today, all German states must ensure that ther leg. islation provides for equal treatment of men and women in the workplace. On the other hand, use of quotas are unacceptable, and this makes the legislation difficult to enforce. Additionally, those individuals who are designated as equal opportu. nity officers typically have difficulty carrying out their tasks, because they often lack the needed authority to enforce their decisions. In the private sector, there has been some progress toward increasing the nume ber of women in upper-level management positions through the introduction of voluntary equal opportunity programs. Some German firms also have nominated individuals or groups and assigned them the responsibility of ensuring equal op- portunity for all personnel. Another, and more recent, development is the concla- sion of company-level, work-family agreements between employers and workers’ representatives regarding parental leave and return plans. These plans allow em ployees to take a longer parental leave than is granted by law, and to attract these employees back, these plans guarantee an equivalent job on returning from the ex- tended leave. Some analysts indicate that Germany’s growing need for competent managers likely will increase the number of women in management and the opportunity for them to achieve higher-level positions. On the other side, critics argue this is wishful thinking and that what is needed is stronger legislation. Still others con- tend! that until there is a fundamental change in the way that male managers view the role and status of women, nothing significant will happen. These arguments all point to one conclusion: Opportunities for women managers in Germany re- ‘main limited and do not seem likely to improve significantly before the turn of the century: Great Britain By the beginning of the 1990s, approximately 12 million women ‘were in the British work force, which was about 44 percent of the country’s total work force. As shown in Table 17-2, the number of women in management and re- lated occupations has been steadily increasing over the last two decades. Once again, however, as in other countries, British women are not well represented at the highest levels of most organizations. As one analyst notes: If membership in the Institute of Directors is an indicator, the proportion of women at the most senior levels in both the public and private sector remains very small, There are ‘ho woman chief executives among Britain’s top 100 companies, as listed in The Times. and a 1989 report found that among members of company boards in the 200 langest i lustrial companies in the United Kingdom, only 21 had women board members. In o- tal, 24 women were appointed, but the majority, eighteen, were either part-time of rnonexeeutive directors. Several of the appointed women had a family connection to the ‘company or a title—that of Indy of baroness.»OARETER 17) ETHICS AND SOOIALRESPONSILTY 489 nM DRITISH WOMEN IN MANAGEMENT AND RELATED OCCUPATIONS — ‘Women as a percentage of all employees in catagory category 1975 1996 1991 oneral management 97 104 = Management positions, excluding general 109 164 = management Professional and related supporting management 120 203 - and administrative positions Managers and administrators = = 308 Professional occupations = - 383 ‘Associate professional and technical occupations = = 43 ‘Wal, all management and related occupations 13 174 379 Source: New Earings Survey 1975 Pat. Table 198 aw Eurngs Survey 1986, Pan. Taba 198, Laon HMSO: M. Nayor ana: Purd, "asus of he 1991 Labour Free Savy Ehploroon aan Ae ee ‘Most women managers in Britain are employed in retail distribution, hotel and catering, banking, finance, medical and other health services, and food, drink, and tobacco: Almost all of these women managers are atthe lowest levels, and they have a long way to go if they hope to reach the top. Legislation designed to pre- vent discrimination in the work place is proving to be of limited value; however, number of steps are being taken to help British women attain equal opportunity in employment. In recent years, British women have been setting up their own associations, 1 such as the Women’s Engineering Society, to develop sources for networking and i to increase their political lobbying power. There also is a national association, known as The 300 Group, that campaigns for women seeking election to Parla. ment, In addition, women have become very active in joining management and Professional associations, such as the Hotel, Catering and Institutional Manage- ‘ment Association; the Institute of Personnel Management; and the Institute of \ Health Service Management. Women now constitute 50 percent or more of the i membership in these professional associations. At the same time, a growing number of British companies are proactively try- ing to recruit and promote women into the management ranks. They are intto- ducing career development programs specifically for women and are prepared to take whatever steps are necessary to ensure that outstanding women remain with ‘he company. For example, the National Westminster Bank allows women man agers to leave for up to 5 years to raise their children and then return to a man~ agement position at their previous level. Firms also are designing strategies to en. | Sure that equal opportunities are, in fact, being implemented. Chief executives and directors of leading companies recently have formed a group known as Op- Portunity 2000. One of the group's goals is to provide a wide range of assistance ‘o women who are interested in business careers; in particular, the focus is on helping firms to demonstrate a commitment to these goals, change their old ways of doing business, communicate their desires to potential women managers, and490 FARTS: INTERNATIONAL MANAGEMENT HORIZONS. make the necessary financial and time commitments that are needed to ensure success. While its sil foo early to say how successful Opportunity 2000 vl be these efforts do appear tobe onthe right track. One analysts summed up the cat rent status and future direction as follows: Recent forecasts of the economy in Britain have highlighted the increased dependence that companies will have on women in the twenty-first century It forecasts that there will be greater need for managers, professionals, and associated staff and that women ‘will generally represent an increasing proportion of that workforce. It remains to be seen ‘whether initiatives such as Opportunity 2000 will enable the number of women man agers to reach a self-sustaining critical mass. Women managers have made strides for. ‘ward in the last eecade. Perhaps with many companies waking up to the necessity of re- taining all good employees, more will also learn to use the full potential of their women as managers in order to benefit both the corporate and the national economies Ethical Problems and Concerns in CI Along, with the tremendous market opportunities in China are some ethical prob- lems for MNCs doing business there. After the violent, June 1989 crackdown on the student protestors in Beijing’s Tiananmen Square, many questioned whether any business should be conducted there until more freedom and human rights, were restored. As.a result, many MNCs pulled out or have not gone into China Despite the ethical implications stemming from Tiananmen Square, many MNCs were, and still are, attracted to the competitive advantages offered by China, One of these advantages is the low cost of labor. Companies as nearby a8 Hong Kong and as far away as the United States have found this cheap labor at tractive, In the case of Hong Kong, a severe labor shortage and strict labor laws have made it difficult to meet mounting work demands in industries such as clothing and toy making. In the case of US. manufacturers, many toy makers have subcontracted their work to the Chinese, because labor is such a large percentage of their overall costs. Factory workers in China are not well paid, and to meet the demand for out put, they often are forced to work 12 hours a day, 7 days a week. In some cases, children are used for this work and are paid very litte, usually only one-half of an adult's wages. The government also has been using prison labor to produce goods for the export market.* In addition, since China recently has opened up to the out side world and there has been a rush to get rich under the market economy re forms, there has been a dramatic increase in crime and illegal business activities” These developments have led to friction between the U.S. Congress and China, and they have resulted in continual efforts by the Senate to impose conditions on the renewal of China's favorable trade status with the United States." During the 1990s, the personal support of Presidents Bush and Clinton have been needed to ensure that China's most favored nation trade status remained intact." Piracy and Counterfeit Problems The US. government is taking a harder line oon Chinese piracy of intellectual property. In the case of music recordings, pirated sales in recent years were 265 percent greater than retail sales of these products, as shown in Figure 17-1. This makes China the largest pirate of this intellectual property in the world. Industry analysts also believe that 90 percent of computer software in China has been pirated from USS. firms; the same is true fora host of