griffin05_final_im - CHAPTER 5 Ethics and Social...

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CHAPTER 5 Ethics and Social Responsibility in International Business After studying this chapter, students should be able to: > 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 cross-cultural and international contexts. > 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. LECTURE OUTLINE OPENING CASE: Exporting Jobs, or Abusing People? The opening case focuses on the ethical debate surrounding the use of child labor, particularly by multinational corporations setting up facilities in poor countries. It looks at abuses that occur in the harvesting of fruit in South America, the production of soccer balls in Mexico, and the manufacturing of athletic footwear in Asia. Key Points Children as young as 9 years old are used in fruit harvesting in South America. It is usually the children’s parents that take their children out of school to help earn money for the family. Minute Maid, Tropicana, and Nestlé have become involved in importing fruit juices from South American suppliers. In Mexico, children as young as 8 years old are paid $1 for each soccer ball they sew (sewing a soccer ball takes roughly 2 hours). These youngsters usually go to school, but then head to work for 6 hours (earning $3). Although child labor is illegal in Mexico, the law is seldom enforced.
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63 Chapter 5 Nike has been criticized for using suppliers in South Asia that use child labor and provide unsafe working conditions. Nike has fought back, claiming that wages are high (by local standards) and that it is Nike’s suppliers’ responsibility to abide by local laws. Many other examples exist – which continue to fuel the debate about how to balance the profit driven quest for lower labor costs against the potential exploitation of children and other low-wage earners and human rights violations. CHAPTER SUMMARY Chapter Five focuses on ethics and corporate social responsibility. It starts by working its way through definitions of ethics and then focuses on ethics in business. From there, it moves to a discussion of the social responsibilities that organizations have toward their stakeholders, the natural environment, and general social welfare. The chapter concludes by reviewing attempts to legally regulate ethical and socially responsible international business conduct (such as the Foreign Corrupt Practices Act and the Anti- Bribery Convention of the OECD). I. NATURE OF ETHICS AND SOCIAL RESPONSIBILITY IN INTERNATIONAL BUSINESS Ethics is defined as “an individual’s personal beliefs about whether a decision, behavior, or action is right or wrong. Ethical behavior usually refers to behavior that conforms to generally accepted social norms. Unethical behavior describes behavior that does not conform to generally accepted social norms.
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