ETHICS AND LAW

ASSIGNMENT

CONDUCTING
INTERNATIONAL
BUSINESS IN AN
ETHICAL MANNER
[LOBLAWS]
 CONDUCTING INTERNATIONAL BUSINESS IN AN ETHICAL MANNER

(PART – 1)

1. Did Panting Steel’s employees or KSN’s managers act in an unethical or illegal manner at
any time during the visit from Hokomito’s representatives? Explain your reasoning.

 There is a thin line difference between a gift and bribe in corporate scenario. A gift is
something of value that is given without expecting anything in return, whereas a bribe is the
same thing provided with the intention of gaining favour or influence. Bribes and gifts might
take the form of cash, tangible goods, tickets to a sporting event, entertainment, vacation,
rounds of golf, or meals at a restaurant. Thus, it can be concluded that even insignificant
gifts can give the impression of excessive influence.
Even though we all agree that it is improper to use money as a kind of coercion or bribery to
influence someone's decision or outcome, it is getting harder to determine where to draw
the line between acceptable and unacceptable behaviour. Accepting these favours and
presents might occasionally be a proper element of a professional partnership. Accepting
them, however, circumstances might be a grave violation of professional and corporate
ethics, and possibly even against the law of that particular country where these things
happen.
In this case, KSN’s manager have arranged the services in such a way which can be
perceived as a bribe more than just respect and appreciation shown prospective business
partners. This can be easily perceived that Panting Steel’s employees have used products of
luxury brands, expensive sporting activities, luxury accommodation and transportation as a
means of bribe to Hikomito’s representative to favour the business partnership on their
behalf. Thus, this act is considered as unethical or an illegal activity from the eye of business
ethics.

2. Should Panting Steel follow the advice given by KSN to make facilitation payments to
owners of the Chinese steel mill? Explain your reasoning.

 No, Panting Steel should not follow the advice given by KSN to make facilitation payments
to owners of the Chinese steel mill. Since Panting steel follows a strong business code of
conduct and is committed to do business in a an ethical and professional manner therefore
it should not follow KSN advice to make under-table payments to the custom officials in
order to process their shipment in a timely fashion. If Panting Steel follows KSN’s advice
than it will lead to unethical business practices. Moreover, giving or taking bribe is not

CONDUCTING INTERNATIONAL BUSINESS IN AN ETHICAL

1
MANNER
 CONDUCTING INTERNATIONAL BUSINESS IN AN ETHICAL MANNER

acceptable and is against the ethical standards laid down by the United Nations Convention
Against Corruption.

3. Would it be illegal or unethical for Panting Steel or KSN to make facilitation payments to
customs officials and what action should Panting Steel take to ensure that its business
activities in Asia meet its strong business code of ethics?

 It is illegal or unethical for panting steel or KSN to make facilitation payments to customs
officials because it is unethical for code of conduct. There are many ways by which panting
steel or KSN ensure that its business activities in Asia meets its strong business code of
ethics. First of all, if panting steel or KSN really wants to grow their business in Asia then
they would decrease their price of steel, by which it becomes affordable for China to make
payments to customs officials. Another way it to convince the China mill about the quality of
the steel of painting steel or KSN so they can overlook the facilitation payments and have
huge profit turnover in return. Apart from this, panting steel or KSN should make some
clause in the business code of ethics regarding this situation, which can create some
permanent solution for this concern and makes both the parties get agree on the import
and export of steel in affordable manner.

CONDUCTING INTERNATIONAL BUSINESS IN AN ETHICAL

2
MANNER
 CONDUCTING INTERNATIONAL BUSINESS IN AN ETHICAL MANNER

(PART – 2)

1. Research the situation and describe in detail the situation and the extent of the ethical
dilemma.

 The case emerged out of the breakdown of the nine-story Rana Square on April 24, 2013, in
the Bangladeshi capital of Dhaka. Taking all things together, 1,130 individuals were killed,
and 2,520 others were genuinely harmed. Two of the dress assembling organizations that
made up for a lost time in the breakdown were Pearl Worldwide and New Wave, which was
under agreement to supply Loblaws with attire for its Joe New brand. Two years after the
misfortune, Arati Rani Das, who lost an appendage and whose mother was killed in the
breakdown, and three other Bangladeshi residents sent off a proposed class activity in
Ontario against Loblaws and three partners. In their explanation of the case, the offended
parties contended Loblaws was liable for labourer wellbeing. They claimed the organization
knew work environments in Bangladesh were hazardous and needed to guarantee the
structures in which Joe’s New pieces of clothing were made were protected. Prevalent
Court Equity Paul Perell chose in July 2017 that Bangladesh's regulations applied.
Accordingly, he finished up the case had been recorded past the point of no return, and that
Loblaws owed no "obligation of care" to the proposed class individuals. On the bid,
Ontario's top court agreed. In its choice in December, the Court of Allure managed the
passing’s and wounds that shaped the premise of the case, and those that happened in
Dhaka. The court found that Loblaws had little command over the manufacturing plants and
had never vowed to review Rana Square for primary well-being. Subsequently, the court
chose, the administering regulation was that of Bangladesh. The court likewise found the
case had been documented past the point of no return.

2. Refer to the link

https://fittfortrade.com/sites/default/files/standards_of_ethical_conduct.pdf
For each of the elements noted, indicate how the organization did not meet the ethical
standards for each category (5 marks)
• Responsibilities to the individual
• Responsibilities to the organization
• Responsibilities to the community and society
• Responsibilities to the profession
• Conflict of interest

CONDUCTING INTERNATIONAL BUSINESS IN AN ETHICAL

3
MANNER
 CONDUCTING INTERNATIONAL BUSINESS IN AN ETHICAL MANNER

 Responsibilities to the individual: When doing a business, an individual's primary duty is to

thoroughly research the property, the building(s), the materials used in the construction,
and all terms and conditions before signing anything.
Responsibilities to the organization: Every organisation has a moral obligation to research if
a location is commercial and whether its employees are a good match for society.
Responsibilities to the community and society: It is the responsibility of the individual to
determine whether or not the structure being created meets their needs.
Responsibilities to the profession: Professionals who use a certain set of knowledge and
skills as professionals have a set of obligations under the idea of professional ethics.
In addition to not being appropriately assigned, duties for certain jobs or tasks were also
ignored.
Conflict of interest: The concerns or aims of two different parties were incompatible.

3. What were the resulting implications for the organization overall?

 The process of change: Organizational transformation is implemented by corporations using
a three-pronged phased strategy. Unfreezing, which entails detecting and unlearning
incorrect previous behaviour that is occasionally established in an organization's culture, is
the most crucial and challenging stage of the process.
Employees resistance to change: The human aspect should not be disregarded by a
changing company. Changing business operations inside a corporation is crucial. The
process is likely to fail if employees are not involved or are unwilling to embrace change.
Employee turnover: After a significant restructuring, firms frequently experience some
employee churn. If an employee thinks the workplace is too unpredictable, she can go for
work somewhere where she feels safer.
Deteriorating work climate: Organizational changes that cause ambiguity and job insecurity
result in a deteriorating work environment, which can have a detrimental impact on an
organization's financial health.

CONDUCTING INTERNATIONAL BUSINESS IN AN ETHICAL

4
MANNER