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Ch05 ethics-social-responsibilityinib
- 1. ©2004 Prentice Hall5-1
Chapter 5:
Ethics and
Social
Responsibility
in International
Business
International Business, 4th
Edition
Griffin & Pustay
By Mahsina, SE., MSIBy Mahsina, SE., MSI
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- 2. ©2004 Prentice Hall5-2
Chapter Objectives_1
Describe the nature of ethics
Discuss ethics in cross-cultural and
international contexts
Identify the key elements in managing
ethical behavior across borders
Discuss social responsibility in cross-
cultural and international contexts
- 3. ©2004 Prentice Hall5-3
Chapter Objectives_2
Identify and summarize the basic areas
of social responsibility
Discuss how organizations manage
social responsibility across borders
Identify and summarize the key
regulations governing international
ethics and social responsibility
- 4. ©2004 Prentice Hall5-4
Exporting Jobs or Abusing People?
“Made in USA” – American Samoa
and Saipan
NAFTA – low wages in Mexico
Walmart & More
South African miners
Canada and drug prices
- 6. ©2004 Prentice Hall5-6
Ethical Generalizations
Individuals have their own personal belief
systems
People from the same cultural context will
tend to hold similar beliefs
Behaviors can be rationalized
Circumstances affect adherence to belief
systems
National culture is intertwined with ethics
- 7. ©2004 Prentice Hall5-7
Figure 5.1 Ethics in a
Cross-Cultural Context
Cultural
Context
Behavior of Organization
Toward Employees
Behavior of Employees
Toward Organization
Behavior of Employees
and Organization
Toward Other Economic Agents
- 8. ©2004 Prentice Hall5-8
Spectrum of Effects
Free Trade No Trade
•Jobs migrate
•Low wages
•Poor conditions
•Fewer jobs in
developing countries
•Higher prices
•Fewer products
Trade with Social
Responsibility
How? Code of Ethics
- 9. ©2004 Prentice Hall5-9
Guidelines and Codes of Ethics
Written statements of the values and
ethical standards that guide the firm’s
actions
Examples
– Johnson & Johnson -- IBEI
– General Mills -- Lilly
- 10. ©2004 Prentice Hall5-10
What do you do…
when the country in which you are
doing business does not have a
code of ethics compatible with your
own?
Gao Feng in China Case.
- 11. ©2004 Prentice Hall5-11
Acceptability of Bribery
Acceptable
– Russia
– China
– Taiwan
– South Korea
Unacceptable
– Australia
– Sweden
– Switzerland
– Austria
The U.S., Japan, and Italy fell between the two extremes.
- 14. ©2004 Prentice Hall5-14
A joint venture
between Anglo-
American and
the Zambian
government
seeks to mine
copper while
minimizing
harm to the
environment
- 16. ©2004 Prentice Hall5-16
Figure 5.3 Approaches to Social
Responsibility
Least
Responsible
Most
Responsible
Obstructionist Defensive Accommodative Proactive
- 18. ©2004 Prentice Hall5-18
Defensive Stance
Do what is required legally, but
nothing more
Corporate responsibility is to generate
profits
Example
– Philip Morris
- 19. ©2004 Prentice Hall5-19
Accommodative Stance
Meet ethical and legal requirements
and more
Agree to participate in social programs
Match contributions by employees
Respond to requests from non-profits
No proactive behavior to seek such
opportunities
- 20. ©2004 Prentice Hall5-20
Proactive Stance
Strong support of social responsibility
Viewed as citizens of society
Seek opportunities to contribute
Examples
– McDonald’s
– The Body Shop
– Ben & Jerry’s
- 24. ©2004 Prentice Hall5-24
Corporate Social Audit
Tool for the evaluation of social
responsibility effectiveness
Formal and thorough analysis
Conducted by task force
- 25. ©2004 Prentice Hall5-25
Steps in Corporate Social Audit
Define social goals
Analyze resources devoted
to each goal
Determine degree of
achievement for each goal
Make recommendations
- 26. ©2004 Prentice Hall5-26
Regulating International Ethics and
Social Responsibility
Foreign Corrupt Practices Act (FCPA)
Alien Tort Claims Act
Anti-Bribery Convention of the
Organization for Economic
Cooperation and Development
International Labor Organization (ILO)