International Business

9e

By Charles W.L. Hill

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 5

Ethics in
International Business
 What Is Ethics?
 Ethics - accepted principles of right or wrong that
govern
 the conduct of a person
 the members of a profession
 the actions of an organization
 Business ethics - accepted principles of right or
wrong governing the conduct of business people
 Ethical strategy - a strategy, or course of action,
that does not violate these accepted principles

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 What Are The Philosophical
Approaches To Ethics?
 There are several different approaches to
business ethics
 Straw men approaches deny the value of
business ethics or apply the concept in an
unsatisfactory way
Friedman doctrine
Cultural relativism
Righteous moralist
Cultural Relativism
Naïve immoralist

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 Strawmen Theories

The Friedman Doctrine states that the only

social responsibility of business is to increase
profits, so long as the company stays within
the rules of law

Cultural Relativism believes that ethics are

nothing more than the reflection of a culture
(‘When in Rome, do as the Romans’)

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 Philosophical
Approaches to Ethics: Straw Man

 The Righteous Moralist claims that a

multinational’s home-country standards of ethics
are the appropriate ones in all countries

 The Naïve Immoralist asserts that if a manager

sees that firms from other nations are not
following ethical norms in a host country then
they should not either

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 What Are The Philosophical
Approaches To Ethics?
 Others approaches are favored by moral
philosophers and are the basis for current
models of ethical behavior
Utilitarian ethics
Kantian ethics
Rights theories
Justice theories

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 Philosophical Approaches to Ethics:
Utilitarian and Kantian Ethics

 Utilitarian approaches to ethics hold that the moral

worth of actions or practices is determined by their
consequences
 An action is judged to be desirable if it leads to the best
possible balance of good consequences over bad
consequences
 One problem with utilitarianism is in measuring the
benefits, costs, and risks of an action
 The second problem related to utilitarianism is that it does
not consider justice, so the minority will always be at a
disadvantage

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 Philosophical Approaches to Ethics:
Utilitarian and Kantian Ethics

 Kantian ethics hold that people should be

treated as ends and never purely as means to
the ends of others
 People are not instruments like a machine
 People have dignity and need to be respected
 Kantian ethics are viewed as incomplete

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 Philosophical Approaches to Ethics:
Rights

 Rights theories recognize that human beings

have fundamental rights and privileges which
transcend national boundaries and cultures
 Rights establish a minimum level of morally acceptable
behavior
 Moral theorists argue that fundamental human rights
form the basis for the moral compass that managers
should navigate by when making decisions which have
an ethical component

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