Chapter 4a Ethics in International Business

Chapter 4a Ethics in International Business - 4-1Click to...

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Unformatted text preview: 4-1Click to edit Master subtitle styleChapter 4Ethics in International Business4-2IntroductionEthicsrefers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization Business Ethics are the accepted principles of right or wrong governing the conduct of business peopleEthical Strategy is a strategy, or course of action, that does not violate these accepted principles4-3Ethical Issues in International BusinessThe most common ethical issues in business involve employment practiceshuman rightsenvironmental regulationscorruptionthe moral obligation of multinational companies4-4Employment PracticesQuestion:When work conditions in a host nations are clearly inferior to those in a multinational’s home nation, what standards should be applied?The standards of the home nation?The standards of the host nation?Something in between?4-5Human RightsQuestion:What is the responsibility of a foreign multinational when operating in a country where basic human rights are not respected?Basic human rights taken for granted in the developed world such as freedom of association, freedom of speech, freedom of assembly, freedom of movement, and so on, are by no means universally accepted4-6Environmental PollutionQuestion:Should a multinational feel free to pollute in a developing nation if doing so does not violate laws?When environmental regulations in host nations are far inferior to those in the home nation, ethical issues ariseThe tragedy of the commons occurs when a resource held in common by all, but owned by no one, is overused by individuals resulting in its degradation4-7Classroom Performance SystemMultinational companies are concerned with ethics in all of the following areas excepta)Employment practicesb)Human rightsc)Environmental regulationsd)Trade regulations4-8CorruptionQuestion:Is it ethical to make payments to government officials to secure business?In the United States, the Foreign Corrupt Practices Actoutlawed the practice of paying bribes to foreign government officials in order to gain business The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions adopted by the Organization for Economic Cooperation and Development (OECD) obliges member states to make the bribery of foreign public officials a criminal offense4-9CorruptionSome economists suggest that the practice of giving bribes might be the price that must be paid to do a greater goodIn countries where preexisting political structures distort or limit the workings of the market mechanism, corruption in the form of black-marketeering, smuggling, and side payments to government bureaucrats to “speed up” approval for business investments may actually enhance welfare However, other economists have argued that corruption reduces the returns on business investment and leads to low economic growth4-10Moral Obligations...
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This note was uploaded on 09/23/2011 for the course ECON 101 taught by Professor Smith during the Spring '11 term at North Shore Community College.

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Chapter 4a Ethics in International Business - 4-1Click to...

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