Chapitre 5 Flashcards
What are ethics, corporate social responsibility, and
sustainability?
“social” issues that arise
frequently in international business
What are business ethics?
the accepted principles of
right or wrong that govern the conduct of
businesspeople.
What does an ethical strategy refer to?
a strategy, or course
of action, that does not violate a company’s
business ethics
What is a decision making process?
The process of making choices by identifying a a decision, gathering information, and assessing alternative resolutions
What are 7 steps of decision making process?
- Identify the decision
- Gather information
- Identify alternatives
- Weigh the evidence
- Choose among alternatives
- Take action
- Review your decision
In what are many ethical issues rooted in? (4)
Differences in:
1. Political system
2. Laws
3. Economic development
4. Culture
How could ethics differ from one country to another?
Something might be normal in one country and illegal in another
What do most common ethical issue involve?
- Employment practices
- Human rights
- Environmental regulations
- Corruption
- Moral obligations of multinational corporations
What should firms do to guard against ethical abuses?
- Establish minimal acceptable ethical standards that safeguard the basic rights and dignity of employees
- Audit foreign subsidies and contractors regularly to ensure standards are being met
- Take corrective actions as necessary
Name basic human rights found in developed nations that are not universally accepted worldwide (5)
- Freedom of association.
- Freedom of speech.
- Freedom of assembly.
- Freedom of movement.
- Freedom from political repression.
What are Sullivan principles (adopted by GM)? (slide)
- Company should not obey the apartheid rules in its
operation in South Africa - Company should promote abolition of apartheid laws
(Was not sufficient to break down the apartheid regime)
Name the 7 Sullivan principles (si ca c’est demande je quit l’exam)
- Non-segregation of the races in all eating, comfort, and work facilities
- Equal and fair employment practices for all employees
- Equal pay for all employees doing equal or comparable work for the same period of time
- Initiation and development of training programs that will prepare, in substantial numbers, blacks and other nonwhites for supervisory, administrative, clerical, and technical jobs
- Increasing the number of blacks and other nonwhites in management and supervisory positions
- Improving the quality of the life for blacks and other nonwhites outside the work environment in such areas as housing, transportation, school, recreation, and health facilities
- Working to eliminate laws and customs that impede social, economic and political justice
When do ethical environmental pollution problems occur?
When environmental regulations differ between host and home nations
When does tragedy of commons occur?
When a resource held in common by all but owned by no one is overused by individuals, resulting in its degradation.
By what is global tragedy of commons enhanced?
Corporations that move production locations where they
are free to pump pollutants into the atmosphere or
dump them in oceans or rivers, thereby harming these
valuable global commons
What organization regulates conduct of int. business in the taking of bribes and other unethical actions?
U.S. Foreign Corrupt Practices Act (FCPA)
What is FCPA amended to allow for?
Facilitating payments
What does convention on Combating Bribery of Foreign
Public Official in International Business
Transactions do?
Makes the bribery of foreign officials a criminal
offense
Ethical implications of corruption (2)
- Are bribes the price to pay to do a greater good? (May improve efficiency and help growth.)
- Do bribes reduce businesses’ incentive to invest? (Reduces the returns on business investment and leads to low economic growth.)
No question, answer = material
Ethical Dilemmas
- Ethical obligations of multinational corporations are
not always clear-cut.
How should corporations handle ethical
dilemmas regarding employment, human
rights, corruption, and environmental
pollution?
- Pressure from customers and stakeholders to be
transparent in ethical decision making. - No universal worldwide agreement about what
constitutes accepted ethical principles.
Six determinants of ethical behavior?
- Personal ethics.
- Decision-making processes.
- Organizational culture.
- Unrealistic performance goals.
- Leadership.
- Societal culture.
What are personal ethics?
Generally accepted principles of right and wrong
governing the conduct of individuals
By what is formation of ethics guided?
Our parents, our schools, our religion, and the media
What pressure may expatriate managers face?
To violate their personal ethics because they are away from
their ordinary social context and culture
What could lead to unethical behaviors in a corporation?
Parent company may pressure managers to meet
unrealistic goals that can only be fulfilled by acting
unethically
Decision-Making Processes: when may businesspeople act unethically?
When they fail to ask, “Is this decision or action ethical?”
Decision-Making Processes: In what type of processes do ethical problems arise?
In processes that do not incorporate ethical considerations into
business decision making.
Decision-Making Processes: how reduce unethical behavior?
Need to better understand how individuals make
decisions that are ethical or unethical in an
organizational environment.
What is organization culture?
Values and norms shared among an organization’s
employees
What are roots of unethical behavior? (4)
- Organizational culture
- Unrealistic performance goals
- Leadership
- Societal culture
Why can org. culture lead to unethical behaviors?
Some organizational culture may not encourage
people to think through ethical consequences of
decisions
How does leadership influence culture? (2)
- Helps to establish the culture of an organization
and set the examples that others follow. - Employees often take cues from business leaders
What type of societal culture leads to unethical behaviors?
Cultures that emphasize individualism and
uncertainty avoidance are more likely to stress
ethical behavior than cultures where masculinity
and power distance are emphasized
What does philosophy as a system of beliefs and
knowledge provide?
A global influential framework
What is an Approach?
A focused way to deal with something, largely influenced by the
philosophy
How can methodology help Approach dealing with something?
By providing method
Straw Men Approach: Offers inappropriate… (finish the sentence)
guidelines for ethical decision
making
What does Friedman Doctrine (approach) say?
Nobel Prize–winning economist Milton Friedman said
“the social responsibility of business is to
increase profits,” so long as the company stays
within the rules of law.
What is Cultural Relativism? (2 aspects)
- Ethics are reflection of culture.
- Rejects the idea that universal notions of morality
transcend different cultures. (When in Rome, do as the Romans do)
What is the righteous moralist (approach)? (3 bullet points)
- Home-country standards of ethics should be
followed in foreign countries. - Typically associated with managers from developed
nations. - Criticized for its proponents going too far.
What is the naïve immoralist (approach)?
If a manager of a multinational sees that firms from
other nations are not following ethical norms in a
host nation, that manager should not either.
What are utilitarian approaches to ethics? (4 aspects)
- The moral worth of actions or practices is
determined by their consequences (see
consequentialism) - Good = utility
- Actions are desirable if they lead to the best
possible balance of good consequences over
bad consequences. - Best decisions are those that produce the
greatest good for the greatest number of people
What philosophers is utilitarian philosophy associated with?
David Hume, Jeremy Bentham, and John Stuart Mill
What are to drawbacks to utilitarian approaches? (2)
- Difficult to measure benefits, costs, and risks of the action.
- Fails to consider justice.
What are Kantian ethics (they are based on Immanuel Kant)? (2)
- People should be treated as ends and never purely as means to the ends of others.
- People have dignity and need to be
respected.
Why are Kantian ethics considered incomplete? (5)
- System has no place for moral sentiments such as sympathy or
caring - Kantian ethics does not reject moral sentiments like sympathy or caring outright, but it places them in a subordinate role to rational principles and duty.
- Kantian ethics requires individuals to act based on principles that can be consistently applied to everyone.
- This emphasis on universality and impartiality means that moral decisions are made based on rational principles rather than personal sentiments.
- Sympathy and caring, being emotional and subjective, can vary from person to person and may not be universalizable in the same way as rational principles.
What do Rights Theories say? (2)
- Human beings have fundamental rights and privileges that transcend national borders and cultures.
- Moral theorists argue that fundamental human rights form the basis for a moral compass that managers should use in ethical decision making.
What is Universal Declaration of Human Rights? (2)
- Adopted by the UN and ratified by almost every country.
- Lays down principles that should be adhered to irrespective
of the culture.
What does article 1 of declaration of human rights say?
All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.
“Along with rights come obligations”: what does this mean?
- We have the right to free speech and must
respect the free speech of others. - Obligations fall on more than one class of moral
agents—any person or institution that is capable of
moral action.( Includes governments and corporations.)
What do justice theories focus on?
The attainment of a just distribution of
economic goods and services
What is just distribution?
A distribution of goods
and services that is considered fair and
equitable
What did John Rawls argue?
That all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage
What does Veil of Ignorance suggest?
- To ask yourself: What system would you design under a veil of
ignorance? - Those in a position to make laws or any major
decisions that affect a significant number of
people in a society or organization, should
imagine that they do not know what their role
would be in that society or organization.
What are the principles of the veil of ignorance? (2)
- Each person is permitted the max amount of basic
liberty compatible with a similar liberty for others.
* Right to vote
* Freedom of speech - Inequality is allowed only if the inequalities benefit
everyone.
Through what aspects of organization can unethical behavior risk be mitigated? (7)
- Hiring and promotion
- Organizational culture and leadership
- Decision making processes
- Ethics officers
- Moral courage
- Corporate social responsibility (CSR)
- Sustainability
How to mitigate unethical behavior risk through hiring and promotion? (3)
- Hire and promote people with a strong sense of
personal ethics. - Businesses can give potential employees psychological tests and check with prior employers regarding ethical behavior.
- Prospective employees should investigate the ethical
climate in an organization prior to taking a position.
How to mitigate unethical behavior risk through organizational culture and leadership? (3)
- Articulate values that place a strong emphasis on ethical behavior.
- Emphasize the importance of a code of ethics.
- Implement a system of incentives and rewards that recognize people who engage in ethical behavior and sanction those who do not.
How to mitigate unethical behavior risk through decision making processes? (4)
- Put decision-making processes in place that require
people to consider the ethical dimension of business
decisions. - Does the decision fall within the accepted values of
standards that typically apply in the organizational
environment? - Is there a willingness to see the decision
communicated to all stakeholders affected by it? - Would people close to me (family members, friends,
colleagues) approve of the decision?
What is 5 step process to think through ethical problems?
- Identify which stakeholders a decision would affect and in what ways?
- Determine whether a proposed decision would violate the fundamental rights of any stakeholders
- Establish moral intent—place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated
- Engage in ethical behavior
- Audit decisions to make sure they are consistent with ethical principles
Why institute ethical officers? To: …(8)
- Assess the needs and risks that an ethics program must address.
2 Develop and distribute a code of ethics.
3 Conduct training programs for employees.
4 Establish and maintain confidentiality of employees.
5 Comply with government laws and regulations.
6 Monitor and audit ethical conduct.
7 Take action, where appropriate.
8 Periodically reviewing and updating the code of ethics.
Why can moral courage help reducing chances of ethical issues? (3)
- Enables managers to walk away from a decision that
is profitable but unethical. - Gives an employee the strength to say no to a
superior who instructs employee to pursue actions
that are unethical. - Gives employees the integrity to go public to the
media and blow the whistle on persistent unethical
behavior in a company.
Why can corporate social responsibility help reducing chances of ethical issues? (3 bullet points)
- With power comes the social responsibility to
give something back to the societies that enable
multinationals to grow and prosper. - Advocates argue that businesses need to
recognize their noblesse oblige. - Power can be used in a positive way to increase
social welfare, which is ethical, or used in a manner
that is ethically and morally suspect.
What do sustainable strategies do?
They help the firm make good profits without harming the environment while acting in a socially responsible manner to stakeholders
Core idea of sustainability?
Organization’s actions do not exert a negative impact on the ability of future generations to meet their own economic needs and actions impart long-run economic and social benefits on stakeholders
What does sustainable strategy require?
- To use precautionary principles when assessing a course of action
- Do not precipitate or participate in a situation that results in a tragedy of commons
