3. Ethics, sustainability, CSR Flashcards
Topic 3
CSR vs ethics
CSR - organisation being a good corporate citizen
ethics - individuals in an organisation
CSR dilemma
challenge businesses face in balancing the need to maximize profits with the growing expectation to act responsibly and ethically towards society and the environment
MNC primary goal
Profit - their social responsibility
MNC moral responsibility
MNCs should anticipate and solve social needs
ethical relativism
moral judgments are not universal and depend on the specific cultural or societal norms in which they are made
3 MNC stakeholders
- host (economy, employees, community, etc)
- home country (owners, customers, employees, etc)
- society (standard of living, global interdependence, etc)
MNC piecing together stakeholders
- look at company HQ stance
- look at duties to customers, employees, etc
- other similar considerations
> MNC has to consider all and find a good median
List some business benefits from Corporate Social Responsibility (CSR).
- Improved brand value and reputation
- Improved employee recruitment, motivation, and retention
- Improved access to capital
- Secured license to operate
- Revenue increase, and cost and risk reduction
global corporate culture
An integration of the business environments in which firms currently operate
How do the USA and Europe differ in their CSR approaches?
- USA - doing business correctly
- Europe - people, society and environmentalism
> however ultimately, similar purpose
What are some methods for dealing with cross-cultural dilemmas?
- Engaging stakeholders and sometimes NGOs in a dialogue.
- establish principles and procedures for addressing difficult issues
- adjusting reward system to reflect CSR commitment
What is moral universalism?
Addressing the need for a moral standard that is accepted by all cultures.
ethnocentric approach
applying morality used in home country regardless of host country’s system of ethics
ethical relativism.
Adopting the local moral code of whatever country in which a firm is operating.
international business ethics
The business conduct or morals of MNCs in their relationships with individuals and entities.
What are the three domains of human action?
- Domain of codified law (legal standard) - lowest ethical standard
- Domain of ethics (social standard) - usual ethical standard
- Domain of free choice (personal standard) - exceptional ethical standard
What is teleology in ethics?
explanation based on consequence, rather than cause
What is utilitarianism?
The greatest good for the greatest number of people.
Kant’s moral law
if 3 conditions are satisfied, one shouldn’t just act, they must act
3 conditions:
- must not kill people
- must be born from rational thinking
- must not use people for the sake of using them
perceived problems associated with globalization?
- World not sharing equitably in benefits; developed get richer, developing stay or get poorer
- Homogenisation destroying cultural diversity
- Exploitation of developing countries
- Companies exerting influence over national governments
- Low skilled workers losing jobs in developed countries
arguments for globalisation
- Trade allows a country to capitalise on its natural resources
- allows poorer countries to compete based on low cost labour, allowing those developed countries to invest in high-cost infrastructure
- There is some evidence to suggest that interest in cultural products from developing countries and cultures is growing, rather than shrinking
De George’s moral guidelines for MNCs.
- Inflict no intentional or direct harm
- Produce more good than bad for host country
- Contribute to host country’s development
- Respect human rights of employees
- Pay fair share of taxes
- Respect local cultural beliefs
- Cooperate with government
ethical issues in global business
- questionable marketing tactics
- product safety
- plant safety
- HRM
- environmental problems
bribes vs facilitation payments
- Bribes - large amounts to influence officials to do something they wouldn’t otherwise do
- Facilitation payments - small sums to speed up minor routine actions
