What determines the complexity of doing business abroad? How is it measured?
- “Distance” from home country
- CAGE (Cultural, administrative, geographic, economic)
Who must companies satisfy?
- Shareholders
- Employees
- Customers
- Society
What are the three levels of moral development? (#tbt to psychology class)
- Pre-conventional: children learn right vs. wrong but don’t understand why
- Conventional: learn conformity
- Post-conventional/autonomous/principled: individuals internalize moral behavior
What is the technical approach?
Decisions based on consequences of the action
What is utilitarianism?
An action is right if it produces the greatest amount of good (Greater good? I am your wife! I am the greatest good you’re ever gonna get! Name that movie.)
What is the Deontological Approach?
Moral judgements are made and moral reasoning occurs independent of consequences
Why do companies care about ethical behavior?
Can be instrumental in achieving competitive advantage and avoiding being perceived as irresponsible
What is relativism?
- Ethical truths depend on the groups holding them
- “When in Rome, do as the Romans do.”
- Used as justification for bribery and corruption
What is normativism?
There are universal standards of behavior that all cultures should follow
What are arguments against the idea that legal justification for ethical behavior is the only important standard?
- Some things that are unethical are not illegal
- The law is slow to develop in emerging areas
- Law is often based on imprecisely defined moral concepts that can’t be separated from legal concepts they underpin
- Law often need to undergo scrutiny but eh courts
- Law isn’t very efficient
What are reasons the law should be used to justify ethical behavior?
- Law embodies many of country’s moral principles
- Law provides clearly defined set of rules
- Law contains enforceable rules that apply to everyone
- Law represents consensus derived from widely shared experience and deliberation; therefore, it reflects careful and wide-ranging discussions
What is extraterrioriality?
Imposing domestic legal and ethical practices on the foreign subsidiaries of companies headquartered in their jurisdictions
What is corruption?
The abuse of entrusted power for gain
What organization created the Corruption Perceptions Index (CPI) to measure levels of corruption in a country?
Transparency International
What legal action did the United States take to combat corruption? What does it include?
US Foreign Corrupt Practices Act
- Makes bribery illegal and applies to domestic or foreign operations and to company employees, as well as agents overseas
- Facilitating payments are allowed
What are facilitating payments?
Payments to officials to expedite otherwise legitimate transactions
What is sustainability?
Meeting the needs of the present without compromising the ability of future generations to meet their own needs
What is the Kyoto Protocol?
international treaty signed in 1997 that requires countries to cut their greenhouse gas emissions to 5.2% below 1990 levels between 2008-2012
What is tiered pricing?
Companies charge a market price for products sold in industrialized countries and a discounted price for products sold in developing countries (usually pharmaceuticals…shout out to G202!)
What are 4 major issues that MNEs get involved in through FDI or purchasing from independent manufacturers in developing countries?
- Fair wages
- Child labor
- Working conditions
- Freedom of association
What is the Ethical Trading Initiative?
Goal to get companies to adopt ethical employment policies and then monitor compliance with overseas suppliers
What are main elements of ethical employment, as defined by the Ethical Trading Initiative?
- Employment is creel chosen Freedom of association and rift to collective bargaining - Clean and safe working conditions - No child labor - Living wages paid - No excessive working hours - No discrimination - Regular employment provided - No harsh or inhumane treatment
How many children work worldwide?
Estimated 250 million between age 5-17, but only 5% of child labor is involved in export industries
What is the United Nations Global Compact?
- Guide for global companies in determining code of ethics
- Includes ten broad principles in human rights, labor, environment, and anti-corruption
