ethics and social responsibility in international business 5

ethics and social responsibility in international business 5 - i n t e r n a t i o n a l b u s i n e s s , 5 t h e d i t i o n chapter 5

Chapter Objectives 1 • Describe the nature of ethics • Discuss ethics in cross-cultural and international contexts • Identify the key elements in managing ethical behavior across borders • Discuss social responsibility in crosscultural and international contexts 5 -2

Chapter Objectives 2 • Identify and summarize the basic areas of social responsibility • Discuss how organizations manage social responsibility across borders • Identify and summarize the key regulations governing international ethics and social responsibility 5 -3

Exporting Jobs or Abusing People? • Minute Maid • Tropicana • Nestle • Nike 5 -4

Ethics is an individual's personal beliefs about whether a decision, behavior, or action is right or wrong. 5 -5

Ethical Generalizations • Individuals have their own personal belief systems • People from the same cultural context will tend to hold similar beliefs • Behaviors can be rationalized • Circumstances affect adherence to belief systems • National culture is intertwined with ethics 5 -6

Figure 5. 1 Ethics in a Cross-Cultural Context Behavior of Organization Toward Employees Behavior of Employees Toward Organization Cultural Context Behavior of Employees and Organization Toward Other Economic Agents 5 -7

How Organizations Treat Employees Some businesses in Africa have taken steps to educate their employees about how AIDS is contracted. 5 -8

Acceptability of Bribery 5 -9 • Acceptable • Unacceptable – Russia – Australia – China – Sweden – Taiwan – Switzerland – South Korea – Austria

Managing Ethical Behavior Across Borders Guidelines or codes Ethics training Organizational practices Corporate culture 5 -10

Corporate Social Responsibility Corporate social responsibility is the set of obligations an organization undertakes to protect and enhance the society in which it functions. 5 -11

Areas of Social Responsibility Organizational stakeholders Natural environment 5 -12 General social welfare

Examples of Companies with a Commitment to CSR 5 -13 • L. L. Bean • Dell Computer • Toyota • Daimler. Chrysler • Lands’ End • BP • 3 M • Honda

Map 5. 1 Social Responsibility Hot Spots 5 -14

Approaches to Social Responsibility Obstructionist Defensive Accommodative Proactive 5 -15

Figure 5. 3 Approaches to Social Responsibility Most Responsible Least Responsible Obstructionist 5 -16 Defensive Accommodative Proactive

Obstructionist Stance • Do as little as possible to address social or environmental problems • Deny or avoid responsibility • Examples – Astra – Nestle – Danone 5 -17

Defensive Stance • Do what is required legally, but nothing more • Corporate responsibility is to generate profits • Example – Philip Morris 5 -18

Accommodative Stance • Meet ethical and legal requirements and more • Agree to participate in social programs • Match contributions by employees • Respond to requests from nonprofits • No proactive behavior to seek such opportunities 5 -19

Proactive Stance • Strong support of social responsibility • Viewed as citizens of society • Seek opportunities to contribute • Examples – Mc. Donald’s – The Body Shop – Ben & Jerry’s 5 -20

Managing Compliance Formally Legal compliance Ethical compliance 5 -21 Philanthropic giving

Managing Compliance Informally Leadership Organizational culture 5 -22 Whistle-blowing

Evaluating Social Responsibility A corporate social audit is a formal and thorough analysis of the effectiveness of the firm’s social performance. 5 -23

Steps in Corporate Social Audit Define social goals Analyze resources devoted to each goal Determine degree of achievement for each goal Make recommendations 5 -24

Actors in Policy Formulation Process The state The market 5 -25 Civil society

Regional Stereotypes Anglo-Saxon approach Asian approach Continental European approach 5 -26

Regulating International Ethics and Social Responsibility • Foreign Corrupt Practices Act (FCPA) • Alien Tort Claims Act • Anti-Bribery Convention of the Organization for Economic Cooperation and Development • International Labor Organization (ILO) 5 -27