Professional Documents
Culture Documents
Ethics and
Social Responsibility
McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Ethics and Social Responsibility
3-2
Ethics and Social Responsibility in
International Management
Ethics
Study of morality and standards of conduct.
Dilemmas arising from conflicts between
ethical standards between countries most
evident in employment practices
Inferring right vs. wrong in legal sense
3-3
Ethics and Social Responsibility in
International Management
Corporate Social Responsibility (CSR)
Involves the voluntary actions of a firm to benefit
society beyond requirements of law and direct
interests of firm
Closely related to ethics
CSR concerns include working conditions in
factories and service centers as well as
environmental impacts of corporate activities
3-4
Ethics Theories and Philosophy
3-5
Human Rights
3-6
Ethics and Social Responsibility
Around the World: JAPAN
Equal opportunity issues
Refusal to hire women or promote them into
management positions
Hostile work environment
Traditional role of females and female employees
Sexual harassment may not be considered a moral
issue
3-7
Ethics and Social Responsibility
Around the World: EUROPE
Equal employment opportunity
Glass ceiling pervasive throughout the world
France, Germany, Great Britain have seen increase
in number of women in management, but tend to
represent only lower levels
3-8
Labor, Employment and Business
Practices
Employment and business practices
Difficult to establish a universal foundation of
employment practices
Difficult dilemmas in deciding working conditions,
expected consecutive work hours, and labor
regulations
Offshoring due to differences in labor costs
3-9
Ethics and Social Responsibility
Around the World: CHINA
Workers not well paid
Often forced to work 12 hours a day, 7 days a week
2010 factory worker suicides
Human rights violations
Use of child labor
3-10
Environmental Protection
and Development
Countries approach the issue of conservation
of natural resources differently
Poor countries are more focused on improving the
welfare of their citizens rather than improving the
environment
Environmental Kuznets Curve
Many companies violate laws and jeopardize
the environment
2010 BP Gulf explosion
3-11
The Environmental Kuznets Curve
3-12
Globalization and Ethical
Obligations of MNCs
Should the MNC adopt the regulations in the
country of origin or those in the country of
operation?
“Doing the right thing” is not always easy
Levi Strauss in Bangladesh
3-13
Reconciling Ethical Differences
across Cultures
Integrative Social Contracts Theory
Helps companies avoid relativism versus
absolutism
Gives managers a framework to use when they
face a gap between the moral and ethical values in
the home country and in the host country
Corporate Social Responsibility
Sustainability
Development that meets humanity’s needs without
harming future generations
3-14
Corporate Social Responsibility
and Sustainability
Nongovernmental organization (NGO)
Private, not-for-profit organization that seeks to serve
society’s interests by focusing on social, political, and
economic issues such as poverty, social justice, education,
health and the environment.
NGOs have grown in number, power, influence
NGOs have urged MNCs to be more responsive to range of
social needs in developing countries
NGO activism has caused major changes in corporate
behavior
NGOs have been active in promoting fair trade products
3-15
Corporate Social Responsibility
and Sustainability
NGOs in U.S. and globally
Save the Children
Oxfam
CARE
World Wildlife Fund
Conservation International
3-16
Corporate Response to Social
and Organizational Obligations
Agreements and codes of conduct committing
MNCs to maintain certain standards
U.N. Global Compact
Codes help offset real or perceived concern
that companies move jobs to avoid higher
labor or environmental standards in their home
markets
Contribute to raising of standard in developing
world by exporting higher standard to local firms in
these countries
3-17
Principles of the Global Compact
Human Rights
Labor
Environment
Anti-Corruption
3-18
Principles of the Global Compact
3-19
Corporate Governance
Corporate governance
The system by which business corporations are
directed and controlled.
Distribution of rights and responsibilities
Stakeholder management
Spells out rules and procedures
Makes decisions
Becoming more important after numerous
scandals
Arthur Anderson, Enron, UnitedHealthcare
3-20
Corporate Governance
3-21
Corruption
Corruption
Government corruption is a pervasive element in
international business environment
Scandals in Russia, China, Pakistan, Lesotho, South
Africa, Costa Rica, Egypt and elsewhere
Some evidence that discontinuing bribes does
not reduce sales of the firm’s products or
services in that country
3-22
Selected Countries Ranked in
Transparency International Corruption
Perception Index
3-23
Global Initiatives to Increase
Accountability and Limit Corruption
Foreign Corrupt Practices Act
makes it illegal for U.S. companies and their
managers to attempt to influence foreign officials
through personal payments or political contributions
“Entertainment” expenses
“Consulting” fees
Organization of American States Inter-
American Convention Against Corruption
Foreign Corrupt Practices Act
3-24
Corruption and
Foreign Corrupt Practices Act
Recent formal agreement by many
industrialized nations to outlaw the practice of
bribing foreign government officials
Organization for Economic Cooperation and
Development
29 members plus several other countries have
signed on
Fails to outlaw most payments to political party
leaders
Does indicate growing support for anti-bribery
initiatives
3-25
International Assistance
3-26
Copenhagen Consensus
Development Priorities
3-27
The U.N. Millennium
Development Goals
3-28
Review and Discuss
3-29