laws. Managers working internationally may be most exposed because they can be caught between home country ethical norms and those encountered abroad. - Linking Ethics, Corruption, and Responsible Behavior After complying with local law (the bottom of the pyramid), management should ensure that company activities follow high ethical standards (the middle). As they expand abroad, most firms believe it is sufficient to comply with laws, regulations, and basic ethical standards. However, in addition, sophisticated MNEs now emphasize socially responsible behavior (the top of the pyramid). Corporate social responsibility (top) Ethical Behavior ( MIddle) Complying with laws and regulations ( bottom) Corporate Social Responsibility implies a proactive approach to ethical behavior in which firms not only seek to maximize profits, but also to benefit society and the environment. Typical CSR values include: 1. Avoiding human rights abuses, 2.Upholding the right to join or form labor unions, 3. Eliminating compulsory and child labor, 4. Avoiding workplace discrimination, 5.Protecting the natural environment, 6. Guarding against corruption, and Engaging in philanthropy, such as donating money, products, or volunteer labor to good causes. CSR is about business giving back to society. However, many firms have been slow to adopt CSR. - The Value of CSR Customers, partners, shareholders, and the media increasingly believe firms have an obligation to be socially responsible to the societies where they operate. Rationale for CSR in international business: 1. CSR is simply the right thing to do. 2. recruit and retain high-quality employees. It also improves employee perceptions of the firm, which in turn enhances their loyalty and focus on company goals. 3. differentiates the firm in the marketplace and enhances branding, particularly useful in foreign markets where the entrant may be unknown or struggling against local competitors. Consumers prefer buying from companies they trust. 4. enhances the quality and effectiveness of intermediary relationships and collaborative ventures. Suppliers, intermediaries, and potential joint venture partners prefer collaborating with reliable firms with strong reputations. 5. helps reduce business costs. For example, firms save money when they minimize packaging, recycle materials, trim energy use, and reduce operational waste. 6. helps avoid increased taxation, regulation, or legal action by government authorities. Consumers, other stakeholders, and the media increasingly look to companies to be socially and
environmentally responsible. Over time many consumers prefer products made by firms with strong CSR. In addition to profit-seeking focal firms, more nongovernmental organizations (NGOs) are undertaking international CSR initiatives, often in conjunction with multinational firms.
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- Fall '07
- Improper Ethical Behavior