Chapter 10: Globalization of Ethical Decision-Making Flashcards
What is an MNC?
a public company that operates on a global scale without significant ties to any one nation or region.
Highest level of international business commitment and are characterized by a global strategy of focusing on opportunities throughout the world.
Problems with MNCs
Their size and power create ethical issues related to exploitation of both natural and human resources. Critics point out that MNCs raise issues of unfair competition
They are not inherently unethical but their size and power often seem threatening to less developed countries.
International Monetary Fund (IMF)
Came from the Bretton Woods agreeement of 1944. Leaders decided that the responsibilities for the regulation of monetary relationships among nations should be carried out by an extra-national body. Member states provide funds for IMF through quotas that are proportional to the size of their economies.\
The IMF makes short-term loans to member countries that have deficits and provides foreign currencies for its members.
Main function is to regulate monetary relationships between national economies.
Concept of risk and IMF bailouts was important during the last global recession. Because of a massive amount of debt the European countries of Greece and Ireland required major bailout packages from the IMF
UN Global Compact
Is a set of 10 principles that promote human rights, sustainability, and the eradication of corruption.
World Trade Organization
153 member and observer nations.
Administers its own trade agreements, facilitates future trade negotiations, settles trade disputes, monitors the trade policies of member nations.
Rules on trade issues such as dumping, the practice of charging high prices for products in domestic markets while selling the same products in foreign markets at low prices.
Bribery
US FOREIGN CORRUPT PRACTICES ACT prohibits American companies from making corrupt payments to foreign officials for the purpose of obtaining or keeping business. Small facilitation payments are allowed
The UK Anti-Bribery act goes further by holding businesspeople more accountable for bribery. It does not have provisions for facilitation payments.
Human Rights
United Nations Human Rights Declaration
Inherent dignity that should be afforded to all people with equal and inalienable rights as the foundation of freedom, justice and peace in the world.
Cultural Relativism
“When in Rome, do what the Romans do”
Global Business
practice that brings together people from countries that have different cultures, values, laws and ethical standards
Country Culture Values
Are specific to groups, sects, regions or countries that express actions, behavior and intent.
National Culture
Consists of everything in our surroundings that is made by people- both tangible and intangible.
Individualism/collectivism
how self oriented cultural members are in their behavior
power distance
refers to the power inequality between superiors and subordinates
Uncertainty avoidance
refers to how members respond to uncertainty
global common Values
common values shared across most cultures
