Values in Tension (Donaldson)

Question 1

International business ethics…

Answer 1

Crosses nation borders. Once you enter the international landscape (foreign settings), there is no shared attitudes, laws or judicial procedures that define ethical conduct. This means that practices that work in your home country may not be acceptable in another country with different standards of ethical conduct.

Question 2

In the international business environment, you are dealing with…

Answer 2

• different standards of ethical conduct ( i.e., lower ethical and labour regulations)
• cultural & societal (community) differences

Question 3

Key question in IB ethics: what should a firm do when a host country’s ethical standards seem lower than the home country’s?

Answer 3

There are a couple of ways to answer this question:
- ethical relativism
-

Question 4

Ethical Relativism

Answer 4

According to ethical relativism, no culture’s ethics have a better take on ethical conduct, there are supposedly “no international right or wrongs”. So essentially, it is let everyone do whatever they want.

Question 5

Critiques: You can’t let people (or a government) do whatever they want, especially when the conduct is deemed more serious and harmful.

Answer 5

There are levels to poor ethical conduct:
- petty bribery
- insider trading
- scamming investors/ health & safety infringements

Question 6

Summary: Cultural relativism is morally blind

Answer 6

As Ray Comfort says, if you have no standard, then anything is deemed “good” or “acceptable”. But we all have a conscience, there must be a point where unethical conduct must be called out on.

Question 7

Ethical Imperialism (absolutist approach)

Answer 7

Everyone must do what they are expected to do in their home country.

Question 8

Critique: The absolutist approach is still inadequate (blanket approach). You still need to take into account the cultural values/ practices of the host country (foreign setting).

Answer 8

Otherwise the message will be lost. Absolutism is based on three problematic principles:
- clashes with the cultural traditions of countries which should be respected (individualist vs communal community values; loyalty vs liberty; equality, equity, fairness vs ascription based on status, title, education, family).
- relies on a single lists of truths (from the home country)
- assumes there is only one standard for global ethical practice.

Question 9

Business examples of absolutist approach: Levi Strauss & Motorola

Answer 9

• Both companies have developed ethical codes of conduct. But also allow for space for managers to make ethical decisions responsibly & creatively.

Question 10

Summary: Context must shape ethical practices

Answer 10

• very low wages might be unethical in developed countries, but in developing nations, very low wages may be ethical practice if it encourages investment (FDI) and improve living standards in the country (China HUKOU system)
• Moreover, the managers and company must know what the culture’s approach is to ethics (you don’t want to adopt practices that lead to excessive punishment, or excessive lax)

Question 11

What are the three guiding principles for shaping ethical practices? (Avoid the two extremes)

Answer 11

• companies should have respect for core human values, which determine the absolute moral threshold for all business activities.
• companies should have respect for local traditions
• companies should have the belief that context matters when deciding what is right and what is wrong.

Question 12

(1) Respect for core human values

Answer 12

These core human values are hard truths that should guide manager’s actions:
- right to good health
- right to economic advancement & improved standard of living
- respect for human dignity
- respect for basic rights
- good citizenship

Question 13

Overlapping consensus (John Rawls); shared values in Western & non-Western cultures, what are they?

Answer 13

For individuals & communities to thrive, members of the community must work together to support & improve the institutions on which the communities depend.

Question 14

What does it look like for companies to respect human dignity?

Answer 14

• to create & sustain a healthy and safe workplace , promoted with a corporate culture in which employees, customers, & suppliers are treated with value, respect, & care. They are of intrinsic value to the company. They are producing safe products & services in a safe workplace. Companies support & protect individual rights of employees, customers, & surrounding communities (i.e. adequate living standards, safety, access to education, & protection of the environment).

Question 15

Examples of unsafe products: Temu nail polish

Answer 15

A young girl bought nail polish off Temu, a well-know chinese online shop, which sells cheap products. The girl suffered sever burns, went to hospital, and had to undergo burn surgery for her hands.

Question 16

Lying violates trust, so companies…

Answer 16

Must no lie about their products, processes, performance. Sometimes the suppliers or customers pose a problem to the Brand’s trusted reputation. If this is the case, after warnings to the supplier to stop practices & they have not, it might be best to cut off business relations (Levi Strauss & Tan Family).

Question 17

(2) Respect for local traditions

Answer 17

Management ethics differ among cultures; it’s important to know & respect these cultural traditions, because just because it’s different, this doesn’t mean it’s wrong.

Question 18

Example of management ethics in Japan & US

Answer 18

In Japan, an exchange of gifts in business meetings is a long-standing tradition. While Western people may misinterpret this as a bribe, the practice of gift giving is a sign of respect and intention to be good business partners. Hence, a good way to manage this is to set different limits on gift giving Japan, which is what some US have chosen to do in their own business practices.

Question 19

Developing nations & Health & Safety Practices (Union Carbide - Bhopal Plant)

Answer 19

It is important to note that some countries do not have the infrastructure or regulatory capabilities to perform what is expected for some practices. If any practice will cause detrimental health & safety outcomes, companies must ensure the developing nation has the capacity and resources use hazardous technologies safely.

Question 20

Can some practices be unethical in one setting, but ethical in another?

Answer 20

Yes - possible - chemical EDB is unsafe & banned in US. But in hot climates, it quickly becomes harmless due to exposure to intense solar radiation & high soil temperatures in other parts of the world.

Question 21

(3) A belief that context matters for ethical practices