DSST Business Ethics and Society 2

American companies lose billions of dollars from

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American companies lose billions of dollars from complying d.i) Giving other countries a competitive advantage 121) Grease Payments – small bribes paid to government officials to facilitate routine bureaucratic decisions a) In many cases these small bribes are condoned by government officials 122) Multi-National Company (MNC)– one that operates in more than one country a) Usually has a parent company and component company which operate in different countries b) Cultural Differences b.i) Methods of payment – some countries it is acceptable to take bribes b.ii) Employment practices – and acceptable to employ children 123) American Businesses – in foreign countries are subject to American anti-corruption and anti-terrorism laws a) One of the most common mistakes of American businesses operating internationally is following the local custom of paying under the table bribes 124) EU Convention on Corruption passed in 1997 – makes it a criminal act to pay bribes inside and outside the European Union a) Civil servants from the EU can be prosecuted for bribery under this legislation 125) Bribes vs Grease Payments a) Bribe – to pay a large amount of money to get a friend out of jail b) Grease payment – to pay a small amount of money to speed up your visa 126) Union Carbide – Pesticide Plant in Bhopal India – in 1984 – exposed over 500,000 to a deadly poison gas which leaked from the plant a) Worst industrial accident in history b) Responsibility fell on the company and the government of India 127) Integrative Social Contract Theory – (ISCT) - theory of business ethics by Donaldson and Dunfee and concerns cross national cultural differences a) ISCT consist of 4 categories of norms a.i) Hypernorms – values acceptable to all cultures and organizations, (i.e.: against murder, theft, rape etc.) a.ii) Consistent Norms – most codes of ethics fall under this category – cannot conflict with hypernorms, more culturally specific a.iii) Moral free space – allows managers to adapt where the norms of a country conflict with consistent norms in the home country (a.iii.1) Freedom to join communities and to act jointly to establish moral rules which apply to community members a.iv) Illegitimate norms – incompatible with hypernorms - lack moral authority, exposing workers to deadly chemicals 128) Sweatshops – low pay, poor working conditions, safety and health violations, child labor a) Often found in Pakistan, Vietnam, Thailand, Honduras, Indonesia and Philippines 129) SA 80 00 Initiative – approved a set of labor standards that include the right to safe working environment, a moratorium on child labor, a living wage, the right for workers to unionize, and a 48 hour work week
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a) Companies that want to comply with the SA8000 standards apply for certification through an outside auditor 130) Transnational Organization – successfully manages both local and global concerns in an integrated plan that offers them the most flexibility a) Cultural differences exist between countries that create barriers that impede effective bargaining a.i)
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