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    11 views17 pages

    IBT Ethics in International Business

    Uploaded by

    Alexander Liwanag

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 17
    “Ep Many of the ethical issues in internati systems, law, economic dev hical Issues in International Business ences. In the international b employment practices, humai ‘moral obligation of multinati usiness setting, n rights, enviro EMPLOYMENT PRACTICES When work conditions in @ host nation are clearly inferior to those in a multnatondh home nation, what standards should be applied? Those of the home nation, those ofthe host nation, or something in between? While few would suggest that pay and work cow ditions should be the same across nations, how much divergence is acceptable! Fes ample, while 12-hour workdays, extremely low pay, and a failure to protect woes Gfainst toxic chemicals may be common in some developing nations, does thi mt that itis okay for a multinational to tolerate such working conditions in iss there, or to condone it by using local subcontractors? tia For example, in the 1990s Nike found itself the center of a storm of protest ot news reports revealed that working conditions at many of its subcontractors — Poor. Typical of the allegations were those detailed in a CBS News ee that aired in 1996. The report painted a picture of young women at a ea SB eetor who worked with toxic materials six days a week in poor conton 20 cents an hour. The report also stated that a living wage in Vietnam was at ‘ghaah F Westen nner Bas () endpera Se cece Giron Fi ne ce iene comacting policies wete perceived 31 unethical, Nlkevsnanagement pectahed& gene Sor of ll subcontactors? owing by indepen “Sores Sa ar ees matte ici che ee ogg rn et “er i er eee tae eee ocr Feces Seon Sem enh rh et tonne cs ihe age ne Series ea eh eerie eg ee i proche compre a ee oe oe Fearing aon HUMAN RIGHTS Cdestins of human sights can are ininterttional busines: Ba human ih sll Heer ad in many ration Rights that we ake for ranted in developed nations, aa rare otnion eed of speech, eedom of sembly, eo of move, aa sa olieal epson ats0 0, ae by no meats universal accented Haase eye) One of theron obvious histone examples was South Aca Sere ccf whe leant aparthes, which didnot ed une 1994, The apathed ane a onc nightscothe majority nonehite popslation of South AB aaareaee een eo terwcen whites and nonwhites, reserved cern ocupationt © dane ceeibtes and prohibeed blacks from being placed in postions where cy seers Chins Despite the adlour nature ofthis eyatem, Western busines ot Teel Seah fie, By the 1980s however, many quetoned the ethics of Jing 2, ed a ed set yoo bY ain ‘South ican economy, supported the epresive opted See esate o change thei plc ih le 1970,and ey 19550" Gnce Monors which had sgniean axis in South Af, was athe larftont ef ths tend, GM adopted what came to be called the Sulina principles, names Kren of hi trend OM apt manera a member of GMS toa of decor Narra eae eal js or GM wo peat in South Aten ong Salim argued thot it was ns che company sou no bey the spate ns company should do everything within Hs pore orc laws Sullivan’ Ta pec by US. hums operating in South A Sullivans principe were Wi er ation of the tes ws ne wae The South African government gor i igjoanuns tartan Oe ted dn mt levine ee sa niin uo cake down the apartheid regime har any Areva ome eosin ea So ee a eh = ould not ed ais Se untty Ditterences es aise when envio mental regulation in hort nations infer © nation. Many p dlp nate ve ol epics oe ese of olan te dampigot echt te wee one ae ths otk, abun Tho gsc ees cng deep a to codigo cay the in beige eo pollion fom he se fukinavnals than onde tonel fe Er cate comes ee of foreign ol companies in Nigeras Acconing toa 1992 report prepared by ences ‘Apt from ai olution fom che cine isin ad lates day and nigh, prac {ng pono ues that are sey al yatereicly wiping ot wulnrale bene Bag anid enangeing ihe if of plant ge, snd man hitselt,wehave widespread ter, pollton at sind olla thot sulin the death of mont aunt aA oven stage ofthe ie offi fh a kl fh onthe ne han, wht, the shes han, arcu contaminated wth ol spil ecome dango fr farming even vere ther contin to roduce scant ile? ‘The implication in his description is that pollution controls applied by feign coms nisin Nigeria were much mote lax than those in developed nations Should multinational el re to pollte i a developing nation’ To do so hay ‘gems ethical. Is there a danger that amoral management might move producto developing nation precisely because costly pollution controls ate Nor fequied, cad the company is therefore fre to despll the environment and pechape enone heat ple in suet to lover proction costs and gain a competiive advantage Wher {he nit and moral thing todo in such ciscomances—pellute to ste af vont advantage, or make sue that fore Le len susie thereto enon anata eg pollution controls? ™ These questions ae on aed importance ease some prs he envonent ae ‘public good that no one owns, 7 Sut anyone cn despoi No one owns the snp ih seis ut lating bath, no mater sre the lesen a es Poor put out livestock om these common’ ets creep neen tos could Rr We tcl consequence was ree ee eu a aE a rahe ct 8 oni, ‘egradation of the commons, andthe Raking payment nesses can and have gained econo Ris ro rate Sea ae Ta ohn nea order for Lockheed’s TriStar jet from Nippon Air. When the payments were discovered, USS. officials charged Lockheed with falsification of its records and tax violations. Although such payments were supposed to be an accepted business practice in Japan (they might be viewed as an exceptionally lavish form of gift giving), the revelations created 2 scandal there too. The government ministers in question were criminally charged, one committed suicide, the government fell in disgrace, and the Japanese peo- ple were. outraged. Apparently, such a Payment was not an accepted way of doing busi- Res: in Japan! The payment was nothing more than a bribe, paid to corrupt officials, to secure a large order that might otherwise have gone to another manufacturer, such as Boeing. Kotchian clearly engaged in unethical behavior, and to argue that the payment was an “acceptable form of doing business in Japan” was self-serving and incorrect. a : f-ing mayen Sonim mn el Neo gE ae tig ays ae not yet sce cnc hat woul wo eee Cie oar hy ments in ech preferential eaten Rather gs ments tte evn the san wetness ough ese Frm fice oven, bt mgt nthe dette ution of fc In 197 he ce a liince minke fm she meme stnes ofthe Orne for Feoomie Cooperation and Developm (OECD) followed the US hyve the Convention on Combating Bribery of Foreign Publi Ofte ne The cent which wet oo 17 of fregn pb conan that male Semen bree es tnsler German fn). The convention exlas facilitating pyments made wo sent ‘While fang payment, or speed money, ar exlide from bot the Fry ‘ConrupePractces Act and the OECD convention on bribery the ethical implicates svaking such payments are unclear. In many counties, payee o goverment offical the form of speed money ae a par of life One can argue that not investing bese povcriment ffcils demand speed maney ignores the fet tae such Investnent ee Fring substantial benefits to he local populace in ers of income and jobs. roma page matic standpoint, giving bribes, although alle evih might be the pric that ms gail todo a rete good (asuring de Investment creates bs where none ened and assuming the practice isnot illepl). Several eaamomiste advocate this tessoning se ‘esting that inthe context of pervasive an cumbersome regulations in developingoey "ies coruption may improve efcteney and help srowthy These economine hoon that in a county where preexisting politialsrvetutes distort o inte the working of the matket mechanism, corruption inthe form of blck-matketering stugaling ed Side paymenes to government bureaucrats t0 "speed up approval for busines eee, iments may enhance welfe* Arguments sich ath peruaded the US, Cones «exempt facili payments rom the Foreign Compt Pretces Act Jn contrast, aher economists have argued tha compton reduces the retums on bus ‘es vestment and lads to lw economic growth” In a countiy where compan © omon, unproductive bureaucrats who demand sie payments fr prating he eaves fee permision to operate may siphon off he profits fom a Wines: atin Thee {ces business’ incentive to invest and may setand a countrys econo path owe One study ofthe connection between comuptin and economic srth ia 30 come found tha comuption hada significant nepatve tnpact on acounirps eth ee Given the debate ad she complexity of this nue on aun gh eee te gen gation i dificult and the demas for speed money createsa genine head eee Yes cortuion ibd, and yes, it may har a countrys conomtc develonene ee ee there are bo cases where se pyments to government officials can ene the bras ac hriers wo investments that create jobs: However hsp sane ene the fst that coco tends to compe bath the bebe giver and the ec ee ene fed on tel ard once an india stars con the ond ol carpe une ace imay be iis if not imposible. This anon stengthens the sea eee hate ‘zing in coneion, no mater how compeling the Kelis nie ek Many multinationals have accep this agument. The lage al elinatinal, BR {or example, asa er-olernce approach rowan clatter neo {wns have «ore nuanced app, For expt, cote the elem eet aoe ‘Methies su Da Coming Paw Co wemplyees wil ot ahora ie payment sto veraent employ ‘sorte Henfirieor angune ee ote to vase een nine role ‘ens expeie the perinmance of mua vk ong dacanged, Ince hte local une practice etates such upon une psc cl ‘yments arte for dhe ini noun neceaiy lst he aeartly docrentel receded” _ il ‘This statement lows for facilitating payments when “ gece ft eli po hen “there is no altemative: MORAL OBLIGATIONS ‘Mulinatonal corporations have power that comes fom their contol over rescur etsy me pte Rate em se cone cus nd sine ne ony by livs and repens tural hen ee Car manny a cts thes that mblethen topper anion Tecan seca ets a erage oil epoiy Sencha sal Soe el sent eden het ins ogee ence tee learn ‘ere deg ee hl mn Serre oe aieaieeemiecent Sage ete we rr tal same French term iliy of people Ieluvior that (Bthical Dilemmas ee Desgugttn eal lion ad we eneea ie tee rae -ement about accepced ethical principles. From an rset Terma mane sity gee sil recive ine rid sen Sr Toad ace eS an Cine rl Ae em human hy and th ep the Anan och arate: ora para @ com Doses i ractice of “if giving” between i nied ema S dered right and proper behaviors an a Siete ocala mi ‘the rifts are substantial. Na on farting American executive find hae tice as a form of bri ale ede the ANE ST an aha ten ene rhe ara es atte dig f AIDS. Mesos rene ae Fences the American wl ing St eal ahr hs eg onthe an espns ei te he by Be i NeDona Os hen pce and walk oi past the ust frien Te A ple uterus cheers With ead and int he MDa theta cont ebro and is lm shake Aa ale tof he gt stuation, wud beat yas oti Ari ope a Would hae been bit, chro have aed he en he to continue working rol ot, eye sc ih a nab phon gun el aor fund i te thar wold ave ld pn nul ave bea te ight thing fo do? ha cana snot the eect ential lemma? he oblige Thatcher thea lemmas oe non fe ae alkeraives ees eal a chy sation in a eed aor war no acceptable, bu given tat se wa aan ae tere auld heonlysorce face. What the Ameria ca ne tcc ne asa orl compas Pears an ial See Ee a duoc a tcl ema to find am eel Seer tne hat ue amoral compas or ethical grt gh aan ee we va cash note hw etc lemmas exis because man eilSecme i ae dg in en 1 eed oy Doing the tight thing or even E> Se re tagtie bekestrtemes (Be (the Roots of Unethical Behavior “as we have seen, examples abound of managers behaving in a manner that might be ‘$4gci Mnethiea'n an ncemationalbainee sting Why do managers behave 28 eS ee en gl nite he gro, he eases ae SRST ome generations canbe made (oe Figure 41). PERSONAL ETHICS snes ethics are not divorced from personal eis, whlch ‘wincpes of right and oi Suir ot Se tpi lly accepted oat Re cide iy tafe ha Peeve a wet er a ares eae pee ie ee in en irs ee tc a aa as ay ser finns ethic far Seley to ephane 008 Exel Home-country managers working abroad in multinational fms (expattate manag rs) may experience more than the usual degre of presute to violate their personal eth. tes. They are away from their ordinary socal context and supporting culture. and they. are pychologically and geographically distant from the paren company. They may Be based in a culture that doesnot place the same vale on ethical norms important in the manager's heme centr, and they may be surzouned by local employees wh have les rigors ethical standards. The parent company may pressure expatiate Managers tO meet unrealistic goals that can oly he flied hy cutting corners acting unedically, Forexample, ws meet centrally mandated performance soa exp sive nibes to wat contacts or might umplement working eon ca controls that are below minimal acceptable stindands, Local managers might encourage the expatriate to adopt such kehavior Due tots geographical distance, the parent com ‘any may be unable fo see how expatriate managers are meeting goals, ort may choose ot tasce how they are doing s, allowing such behavior co lurish and persis. DECISION-MAKING PROCESSES Seer aie of unethical behavior in a husnes setting have conclude that bus- espeplesomerines ono eal they are Fehavingunettally pearly beets they simply ta tos le this decision oration ethical" nated they apply staghtrandhiines alls ro whae they perceive to be a butines decison, forge Sing tha the decom may alo ave an importane echial dimension, The aul Brceser chat do mow inorpoate ethical considerations nt bs Taismay have Koen the cae at Nike inthe station dicumed cals when managers

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