NATIONAL UNIVERSITY OF MODERN LANGUAGES

ISLAMABAD
BBA 5 C (AFTERNOON)
Business Ethics
Group F
•Sana Malik.

•Jaweria Arshad.

•Abdul Rehman Malik.

•Mirza Omer Baig.

•Muhammad Waqar.

•Mubashir.

Presented to:
Mam Sobia Rashid.
Globalization Change Factors
 End of communism
 Emergence of China and India
 Information technology/Internet
 Free trade and trading agreements (EU, NAFTA, ASEAN,
WTO)
 World Bank and IMF
 Global terrorism
 Growth of multinational enterprises
 Global poverty and income disparity
 Consumers demanding corporate social responsibility
 Shift to service economies and knowledge workers
Four Key Attributes of Global Executives

 A deep understanding of both their local and global

markets
 Solid business fundamentals
 The ability to attract and retain top talent
 The ability to champion new world thinking.
Managerial and Ethical Competencies

 Multidimensional perspective
 Line management proficiency
 Good decision making
 Resourcefulness
 Cultural sensitivity
 Culturally adaptive
 Team building skills
 Mental maturity
 Negotiating skills
 Change agent skills
 Visionary ability
 The Global Sullivan Principles
 Express our support for universal human rights
 Promote equal opportunity for our employees at all levels of the company with
respect to issues such as color, race, gender, age, ethnicity or religious beliefs
 Respect our employees’ voluntary freedom of association
 Compensate our employees to enable them to meet at least their basic needs and
provide the opportunity to improve their skill and capability in order to raise their
social and economic opportunities
 Provide a safe and healthy workplace; protect human health and the environment;
and promote sustainable development
 Promote fair competition including respect for intellectual and other property
rights, and not offer, pay or accept bribes
 Work with governments and communities in which we do business to improve the
quality of life in those
 Promote the application of these Principles by those with whom we do business
Things Managers Should Know
 your own cultural and ethical values and principles
 those of your organization or company
 those of the individuals, team, and organization in
whose culture you are working
 Two traps to avoid:
 Acting ethnocentrically
 Moral and cultural relativism
Cross-cultural Business Ethical Issues:
1.Bribery

 Bribery and gifts

 Read and understand the legislation and its enforcement on
corruption and bribery
 Read and understand the U.S. Foreign Corrupt Practices Act
and the OECD convention guidelines
 Know your business associates and partners where you do
business
 Take an active role in education, compliance and due
diligence
 GIFT means (1) Genuine, (2) Independent, (3) Free, and (4)
Transparent
Cross-cultural Business Ethical Issues: 2.Racial
and Sexual Discrimination

 “Under international human rights law, states are obliged to

combat discrimination in all its forms,” according to Amnesty
International.
 Racial discrimination – high potential in countries dealing with
immigration issues
 Government prevention support: Indonesians (80%), Chinese
(77%), Azerbaijanis (72%), French (69%), Americans (69%),
Britons (69%), Ukrainians (65%), Mexicans (64%), Iranians
(61%), Russia (58%), Egypt (56%), Nigeria (56%), the
Palestinian territories (53%), and South Korea (53%).
 Government prevention opposition: Turks (23% support, 43%
oppose) and Indians (27% support, 20% oppose)
Cross-cultural Business Ethical Issues:
3.Piracy and Intellectual Property Protection
 Defending ideas, inventions, and creativity
 International Chamber of Commerce estimates the
global fiscal loss of IP at over $600 billion a year
 China, Russia, Argentina, Chile, Egypt, India,
Israel, Lebanon, Thailand, Turkey, Ukraine, and
Venezuela are countries that are monitored
The Dark Side of Globalization
 Crime and corruption
 Economic poverty and child slave labor
 Digital divide, creating ‘losers’
 Westernization of other cultures
 Erosion of individual nations’ sovereignty
Frequent Misuses of MNE Power

 Not forthright about known defects (Ford/Firestone)

 Questionable safety standards and controls (Union Carbide)
 Lack of proper product instructions that are understandable
(Nestle)
 Support of questionable governmental practices or policies
(South Africa)
 Not paying fair share of taxes
 Exerting undue political influence
 Damaging the physical environment
 Committing corporate crimes (bribery, kickbacks, etc)
MNE Counterarguments Hire local labor
Create new jobs

 Hire local labor

 Create new jobs
 Co-venture with local entrepreneurs and companies
 Attract local capital to projects
 Provide for and enhance technology transfer
 Develop particular industry sectors
 Provide business learning and skills
 Increase industrial output and productivity
 Help decrease the country’s debt and improve its balance
of payments and standard of living
Figure 8.6: MNE Stakeholder Management,
Environmental Issues, and Ethical Concerns
Unethical Requirements of MNE’s by Host
Countries

 Limit repatriation of MNE assets and earnings

 Pressure and require MNEs to buy component parts
and other materials from local suppliers
 Require MNEs to use local nationals in upper-level
management positions
 Require MNEs to produce and sell selected products in
order to enter the country
 Limit imports and pressure exports
 Require a certain amount or percentage of profit to
remain in or be invested in the country
Host Country Criticisms of MNEs

 MNEs can dominate and protect their core technology and research and
development, thus keeping the host country a consumer, not a partner or
producer.
 MNEs can destabilize national sovereignty by limiting a country’s access to
critical capital and resources, thereby creating a host- country dependency on
the MNE’s governments and politics.
 MNEs can create a “brain drain” by attracting scientists, expertise, and talent
from the host country.
 MNEs can create an imbalance of capital outflows over inflows.
 MNEs can disturb local government economic planning and business practices
by exerting control over the development and capitalization of a country’s
infrastructure.
 MNEs can destroy, pollute, and endanger host-country and LDC environments
and the health of local populations.
MNE Guidelines for Doing Business in Less Developed Countries

 Do no intentional harm
 Produce more good than harm for the host country
 Contribute to the host country’s development
 Respect human rights, local culture
 Pay fair share of taxes
 Cooperate with local government as partners
 Attend to actions, consequences, and failures of the firm
 Maintain high safety standards and controls
 Protect the natural environment
Employment Practices Guidelines

 MNEs should not contravene the workforce policies of host nations.

 MNEs should respect the right of employees to join trade unions and to
bargain collectively.
 MNEs should develop nondiscriminatory employment policies and
promote equal job opportunities.
 MNEs should provide equal pay for equal work.
 MNEs should provide favorable work conditions, limited working hours,
holidays with pay, and protection against unemployment.
 MNEs should respect local host-country job standards and upgrade the
local labor force through training.
 MNEs should adopt adequate health and safety standards for employees
and grant them the right to know about job-related health hazards.
 MNEs should, minimally, pay basic living wages to employees.
Environmental Protection Guidelines

 MNEs should respect host-country laws, goals, and priorities concerning

protection of the environment.
 MNEs should preserve ecological balance, protect the environment, adopt
preventive measures to avoid environmental harm, and rehabilitate
environments damaged by operations.
 MNEs should disclose likely environmental harms and minimize the risks
of accidents that could cause environmental damage.
 MNEs should promote the development of international environmental
standards.
 MNEs should control specific operations that contribute to the pollution of
air, water, and soils.
 MNEs should develop and use technology that can monitor, protect, and
enhance the environment.
Consumer Protection and Political Payment
Guidelines

 MNEs should respect host-country laws and policies

regarding the protection of consumers.
 MNEs should safeguard the health and safety of
consumers by various disclosures, safe packaging,
proper labeling, and accurate advertising.
 Political Payment:
 MNEs should not pay bribes or make improper
payments to public officials.
 MNEs should avoid improper or illegal involvement or
interference in the internal politics of host countries.
Basic Human Rights and Freedoms

 MNEs should respect the rights of all persons to life, liberty, security
of person, and privacy.
 MNEs should respect the rights of all persons to equal protection of
the law, to work, to choice of job, to just and favorable work
conditions, and to protection against unemployment and
discrimination.
 MNEs should respect each person’s freedom of thought, conscience,
religion, opinion and expression, communication, peaceful assembly
and association, and movement and residence within each state.
 MNEs should promote a standard of living to support the health and
well-being of workers and their families.
 MNEs should promote special care and assistance to motherhood
and childhood.
Four Stages of International Negotiations

 Build interpersonal relationships (learning about

the people)—separate people from the problem.
 Exchange task-related information—focus on
interests, not positions.
 Persuade—invent options for mutual gain, instead
of relying on preconceived positions, high pressure,
or “dirty tricks”.
 Make concessions and agreements—use objective
decision criteria.
Styles of International Ethical Decision Making

 Foreign Country Style – applies values and norms

of local host
 Empire Style – uses home country values an norms
 Innerconnection Style – uses values and norms that
are shared across companies and national cultures
 Global Style – applies a more integrated,
specialized set of values and norms
Figure 8.8: Global Values Map
Thanks!