Lecture 8: Ethical and Legal Environments Flashcards
What are 4 ethical issues in international business?
- Employment practices
- Human rights
- Environment policy
- Corruption
What issues should be considered regarding employment practices?
Hiring practices
Labour relations
Diversity issues
Employment conditions
Should the MNC adapt its policies? Standardise?
What are some aspects of human rights?
Freedom of:
- association
- speech
- assembly
- movement
- political expression
What are the main pieces of legislation that tackle corruption?
Convention on Combating Bribery of Foreign Officials in International Business Transactions (OECD)
Commonwealth Criminal Code ACT 1995 in 1999 (Criminal Code Amendment (Bribery of Foreign Public Officials)
What is social responsibility?
Business decisions should be made after consideration of social consequences of economic actions
What is noblesse oblige?
Honorable and benevolent behaviour is the responsibility of those in power
What are the determinants of ethical behaviour?
- Individual ethics
- the legal system
- the economic system
- professional code
- organisation culture
- decision making processes
- leadership
- unrealistic/realistic performance goals
What are the accords for:
- UN
- US
- European Union
- Organisation for Economic Cooperation and Development (OECD)
- International Labour Office (ILO)
- UN –> United Nations Universal Declaration of Human Rights
- US –> Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human rights (NRTC)
- European Union –> European Convention on Human Rights
- Organisation for Economic Cooperation and Development (OECD) –> OECD Guidelines for Multinational Enterprise
- International Labour Office (ILO) –> International Labor Triparite Declaration on Transnational Corporation
What are 4 arguments for social responsibility in international business?
- Business creates problems and should therefore help solve them
- Corporations are citizens in our society
- Business often has the resources necessary to solve problems
- Social responsibility can enhance profits
In Australia, the Australian Stock Exchange has identified ten essential corporate governance principles. What are they?
A company should:
- Lay solid foundation for management and oversight
- Structure the board to add value
- Promote ethical and responsible decision-making
- Safeguard integrity in financial reporting
- Make timely and balanced disclosure
- Respect the rights of shareholders
- Recognise and manage risks
- Encourage enhanced performance
- Remunerate fairly and responsibly
- Recognise the legitimate interests of stakeholders
What are 4 arguments against social responsibility in international business?
- The purpose of business is to generate profit for its owners
- Involvement in social programs gives business too much power
- There is potential for conflict of interest
- Business lacks the expertise to manage social programs
A distinction can be made between formal and informal methods to manage social responsibility.
What are FORMAL methods?
Formal methods include legal and ethical compliance.
Legal compliance is the extent to which organisations comply federal, state and local laws.
Ethical compliance is the extent to which the members of the organisation follow basic ethical standards of behaviour. This may be reinforced through staff training and development.
A distinction can be made between formal and informal methods to manage social responsibility.
What are INFORMAL methods?
Informal methods include the following:
- leadership practices and organisational culture play important roles in defining the social responsibility stance that an organisation and its member will adopt
- “whistleblowing” is the disclosure by an employee of illegal or unethical conduct by others within the organisation. An organisation’s response to this practice is likely to indicate its stance on social responsibility.
