ETHICS Introduction Ethics and Law Distinguished Ethical Schools

ETHICS • Introduction – Ethics and Law Distinguished – Ethical Schools of Thought – – Utilitarianism Rights-Duties Justice-Fairness Ethics of Care – Application of Ethical Standards

ETHICS AND LAW • Law • Involuntary application of rules and regulation within jurisdiction of host nation • Law provides for sanctions and penalties if noncompliance by international corporation • Ethics • Voluntary compliance with recommendations from International Labor Organization for Economic Cooperation and Development No legal penalties for noncompliance

ETHICS AND LAW • Ethics-continued – Ethical Relativism • theory that different countries or cultures have different ethical belief systems there is no supranational way of determining whether an action is right or wrong – Ethical Problems • Poor ethical decisions can damage corporate profits, reputation, credibility, public image and lead to poor public relations.

ETHICS • Utilitarian-Teleology or consequentialism looks to the consequences of a decision or an action to determine if it was ethically correct. • Utilitarian Theories – Egoism – Benefit Cost Analysis

ETHICS • Utilitarianism – Egoism-associated with Adam Smith’s “Wealth of Nations”. In short, individuals should be allowed to make decisions based upon their own rational self interest. – Benefit Cost Analysis-where one attempts to to monetize the ethical determination by placing a dollar value on the benefits and costs of an action from the narrow perspective of decisionmaker.

ETHICS • Utilitarianism-continued – Criticism of Utilitarianism Theories • Non-quantifiable variables such as human life or well being. • Weighing direct and indirect effects from the perspectives of all parties or stakeholders. • Which concerns should be the “dominant concern” in making ethical decisions. • What are the distributive effects of a decision

ETHICS • Rights and Duties-Individual ethical actions to others. – Ethical Theories on Rights and Duties • Enunciated Rights Approach • Kantian Approach • Virtue Approach

ETHICS • Rights and Duties-continued – Enunciated Rights Approach-individual has a duty to respect the enunciated rights of others • John Locke-inalienable rights as enunciated in the United States in the Bill of Rights, Constitution and Declaration of Independence-life, liberty and property. • French Rights of Man • United Nations Declaration on Human Rights and Development-Articles 3 through 25

ETHICS • Kantian-absolute duty that cannot be changed because of unattractive consequences created by such duty • Categorical Imperative-non-negotiable duties or laws • Obedience to the Law-Bhopal Incident • Virtue Approach-focus is upon the moral character or motivation of the actor. • Actor must avoid vices

ETHICS • Ethics of Care-focuses on the preservation of relationships. The view is that one owes an obligation to some rather than to others. • Milton Friedman-corporation owes a duty to shareholders and not society. • John Kenneth Galbraith-corporation has a social obligation. • Example would be decision to close a plant that injures a number of people in the community.

ETHICS • Ethics of Care-continued – Organizational Ethics-individuall liability for violating organizational moral duties. • Subordinate Responsibility-must think from the perspective of other persons when acting upon the other person. • Caux Round Table Principle for International Business-combining the Western concept of dignity of all human beings and the Japanese concept of Kyosei that a primary value of society is working together.

ETHICS • Application of Ethical Standardsenvironment, bribery, standards and advertising – Environmental • Korea-Rapid economic growth lead to environmental concerns. • Korea created a number of governmental and nongovernmental agencies to protect the environment. • Ethical Issue-should foreign firm apply higher standard or just meet the standards applied by the Korean government.

ETHICS • Bribery – Foreign Correct Practices Act-anti bribery provision, record keeping provision and disbursement provision. – See Comparative Law: Foreign Corrupt Practices Act – See Case Lamb v. Phillips – United States v. Liebo

ETHICS • Bribery-continued – Elements of Offense Under Foreign Corrupt Practices Act • • • Who Corrupt Intent Corrupt Act Recipient Business Purpose

ETHICS • Bribery-continued – Organization for Economic Cooperation and Development • OECD Convention on Combating Bribery of Foreign Public Officials in International Business – Development Centre on Corruption-assist developing nations combating corruption – United States is bound by convention. Convention is similar to FCPA.

ETHICS • International Standard-international organizations businesses may consult – OECD – International Chamber of Commerce – International Organization for Standardization

ETHICS • Advertising – International Chamber of Commerce has some standards on advertising. Examine provisions in insert