SOCIAL AND ETHICAL ISSUES IN INTERNATIONAL BUSINESS

PRESENTED BY: Palashi Borah Kanta Roy Priyanka Konwar

ETHICS
Moral standards, not governed by law, that focus on the human consequences of actions

BUSINESS ETHICS A form of applied Ethics or professional ethics that examines ethical principles and moral or ethical problems that arises in a business environment. Sources: Religion Cultural Experience Legal system .

Ethics can .IMPORTANCE OF ETHICS ‡ Ethics corresponds to basic human needs ‡ Values create credibility with the public ‡ Values give management credibility with Employees ‡ Values help better decision making ‡ Ethics and Profits ‡ Law can t protect society.

SOCIAL RESPONSIBILITY AND INTERNATIONAL BUSINESS(Challenges) ‡ Managing the type of the Government obtaining in a host country where subsidiary of MNC is located. ‡ Host Government s attitude towards foreign investment . ‡ Relationship between home country and host country.

‡ Social problems of host country. ‡ International laws is weak in addressing social effects in Business. .CONTD .

race. Safety of working conditions. color. information. discrimination by sex. ‡ Stockholders: Fair return on Investment ‡ Employees: Fair wages. fair price. ‡ Host Country: Impact on local economies.Who are effected by ethical issues?? ‡ Customers: Product safety. ‡ Society in general: Environmental protection. creed. proper disclosures. . following local laws. impact on local social institutions. child labor. raw material depletion.

Corruption: is abusing public office for private gain. .INTERNATIONAL BUSINESS AND ETHICS  Bribery and CorruptionBribery: a deliberate attempt to persuade someone to act improperly in favor of briber by offering money of gifts or any other material gain.

Due to cultural differences an International firm may vary its work practices to suit the local culture and avoid ethnocentrism. Work Practices and Work remunerationsThe ethical dilemma facing an International firm is what type of technology it should employ in the host country. .

dumping of toxic chemicals into the environment. .  Environmental pollution: The emission of pollutants. around toxic chemicals for long hours and less wage and salaries in developing countries.OTHER ISSUES  Employment Practices: Working conditions like hot weather.

.RELATIVISM Vs. ‡ Cultural ethical relativism What is right or wrong. good or bad. UNIVERSALISM ‡ Individual ethical relativism No absolute principle of right and wrong. depends on one's culture. ‡ Ethical universalism Universal and objective ethical rules located deep within a culture that also apply across societies. good or bad. in any social situation.

Ethical and Legal Distinctions in International Management China United States Yes Alcohol Consumption Usury Women Drivers A Yes Alcohol Consumption Usury Women Drivers Child Labor Facilitating Payments Prayer at Work Legal No Legal Child Labor Facilitating Payments Prayer at Work No No B Ethical Yes No Ethical Yes Islamic Countries Yes Child Labor Facilitating Payments Prayer at Work Legal Alcohol Consumption Usury Women Drivers No No 17-12 Ethical Yes .

. creates pressures to have common ethical practices that transcend national cultures and institutional differences. ‡ Interactions between trading create pressures for imitating the business practices of other countries ‡ MNCs that do business across the world have employees from varied cultural backgrounds who need common standards and rules regarding how to behave. ‡ growth of international trade and trading blocks.Pressures for Ethical Convergence. such as NAFTA and the EU.

UDHR ILO 17-14 . especially plant closings. UDHR ILO. UDHR ILO. pay basic living wages to employees MNCs operations should benefit lower-income groups of the host nation Organization ILO ILO. OECD.Employment Practices and Policies (selected) Policy MNCs should not contravene the manpower policies of host nations MNCs should respect the right of employees to join trade unions and to bargain collectively MNCs should develop nondiscriminatory employment policies and promote equal job opportunities MNCs should provide equal pay for equal work MNCs should give advance notice of changes in operations. minimally. UDHR ILO. and mitigate the adverse effects of these changes MNCs should. OECD ILO. OECD.

proper labeling.Consumer Protection Policy MNCs should respect host-country laws and policies regarding the protection of consumers MNCs should safeguard the health and safety of consumers by various disclosures. TNC Code TNC Code 17-15 . and accurate advertising Organization OECD. safe packaging.

Helsinki. ILO. TNC Code UDHR. ECHR. conscience. and protection against unemployment and discrimination MNCs should respect all persons¶ freedom of thought. opinion and expression. Helsinki. ILO. TNC Code 17-16 . and movement and residence within each state MNCs should promote a standard of living to support the health and wellbeing of workers and their families MNCs should promote special care and assistance to motherhood and childhood Organization UDHR. peaceful assembly and association. Helsinki. communication. Helsinki. ILO. work. choice of job. security of person. just and favorable working conditions. liberty. TNC Code UDHR. and privacy MNCs should respect the rights of all persons to equal protection of the law. ILO.Basic Human Rights and Fundamental Freedoms Policy MNCs should respect the rights of all persons to life. religion. Helsinki. TNC Code UDHR. ECHR. ILO. TNC Code UDHR.

Ex.4 Corrupt 9.2 9.5 9.3 9.7 9.7 9.5 10 = Least 9.6 9. 17-1: Least Corrupt Countries Worldwide 9.5 9.1 Finland Denmark New Zealand Iceland Singapore 17-17 .4 9.3 9.

17-2: Corruption in Western and Eastern Europe 10 9.2 10=Least Corrupt 5 4 3 2.7 9 8 7 6 6 5.1 2 1 0 Finland Italy Slovenia Moldova 17-18 .Ex.

5 2 1.7 1 0 Canada USA Mexico Costa Rica Nicaragua Chile Paraguay 17-19 .5 3 2. and South America 9 9 8 7. 17-3: Corruption in North.7 7.5 7 6 5 10=Least Corrupt 4 3.Ex.6 4. Central.

4 6 4.8 5 4 10=Least Corrupt 3 3. 17-5: Corruption in Northern and Southern Africa 7 6.6 1 0 Tunisia Egypt Botswana Nigeria 17-20 .Ex.4 2 1.

5 3.Ex.1 4 3.5 3. 17-6: Worst Bribe Payer Countries 4.5 0 Russia China Taiwan South Korea Italy .5   10=Leas o up ¢¢ ¡ 17-21   2 1.9 3 2.5 1 0.8 3.2 3.5 4.

2. 3. do training in ethics Strict enforcement of codes is essential Actions speak louder than words 17-22 . The top management must be committed to the company s ethics program A written company code that clearly communicates management s expectations must be developed Provide an organizational identity to the ethics program A formal program must be in place to implement the ethics code The line managers. 6. 5. 7. not consultants.What Companies Can Do to Integrate Ethics and Business Conduct 1. 4.

Implications for Managers ‡ Develop a Framework for Evaluating Ethical Codes and Determining Personal Ethics ‡ Understand Behaviors and Ethics of Other Societies ‡ Consider Approaches to Resolving Cross-Cultural Ethical Conflicts .