Ethics & Social Responsibility

1. Ethics & Social
Responsibility
International Management
MGMT 2420

2. KEY CONCEPTS
1. Bribery/Gift giving
2. Foreign Corrupt Practices Act
3. Intellectual Property Rights
4. Ethical Marketing Tactics
5. Disposal of Toxic Waste
6. Anti-boycott Legislation
7. Outsourcing jobs

3. ETHICS
► An individual’s or firm’s beliefs, principles,
standards and norms of conduct governing
a decision, behaviour or action
► Therefore: ethical beliefs and behaviours
that flow from them vary by person or firm.
► In societies there are generally accepted
norms = ETHICAL BEHAVIOUR

4. CULTURAL FOUNDATIONS OF
ETHICAL BEHAVIOUR
► Relativism vs. Normativism (imperialism)
► Relativism: ethical truths depend on the
values of the groups espousing them.
 “When in Rome, do as the Romans do” (St.
Ambrose)
► Normativism: there are universal standards
of behaviour and they should be accepted
by people everywhere
► A fine line

5. ETHICS AND LAWS
► Many laws are based on prevailing ethical
standards and beliefs
► Beliefs and ethics are based on cultural
values
► Values are often based on time, age, status,
education
► Culture has a direct impact on the value
system of members

6. ETHICS AND ORGANIZATIONS
►Organization’s treatment of employees
 Applicants/candidates
 Hiring/firing criteria
 Compensation/benefits
 Career development
 Outsourcing jobs?

7. ETHICS AND ORGANIZATIONS
►Employees’ treatment of the
organization
 Conflicts of interest
 Secrecy
 Confidentiality/Non-disclosure

8. ETHICS AND ORGANIZATIONS
►Treatment of “other economic agents”
 Customers
 Competitors
 Stockholders
 Suppliers
 Dealers
 Unions

9. MANAGING ETHICS ACROSS BORDERS
► Codes of Ethics/Conduct: a set of guidelines
for making ethical decisions
► Ethics Training
► Top down organizational practices
► Bribery

10. REGULATIONS
► Foreign Corrupt Practices Act (FCPA):
 1977
 Prohibits the offer or payment of bribes to any
FOREIGN GOVERNMENT official to influence
actions or policies to gain or retain business
 Does not apply to “expediting normal
commercial transactions”, e.g. permits,
customs, inspection, police services
► Alien
Tort Claims Act: 1789re benefiting
from foreign government’s human rights
abuses

11. REGULATIONS
► Anti-Bribery Convention of the OECD:
 Ratified by 37 countries
 Attempt to eliminate bribery
► U.K. Bribery Act: 2010, in effect 2011.
Outlaws active, passive, bribery of foreign
officials & failure to prevent (corp. offence)
► International Labor Organization:
 Inspects and monitors working conditions

12. CORPORATE SOCIAL
RESPONSIBILITY
► Obligations that the organization undertakes
to protect and enhance society
► World Business Council for Sustainable
Development (www.WBCSD.org) Business
Role – Case Studies

13. CORPORATE SOCIAL
RESPONSIBILITY
►Targets:
 Stakeholders
 Natural Environment
 General social welfare

14. CORPORATE SOCIAL
RESPONSIBILITY
►Organizational Stakeholders:
 Customers
 Employees
 Investors

15. CORPORATE SOCIAL
RESPONSIBILITY
►Natural Environment
 Global warming
 Clean air
 Clean water
 Sustainability
 Disposal of toxic waste

16. CORPORATE SOCIAL
RESPONSIBILITY
► General Social Welfare
 Contributions to non-profits, museums,
symphonies, etc.
 Correct political/social ills

17. CORPORATE SOCIAL
RESPONSIBILITY
YES OR NO?
►OBSTRUCTIONIST STANCE: Ford Pinto
fire (1970’s)
►DEFENSIVE STANCE: Nike sweatshops
(1990’s)
►ACCOMODATIVE STANCE: Explorer
rollovers (speedy recall 2000’s)
►PROACTIVE STANCE: BMW recycling (1990)

18. CSR – IBM Study
► http://www.youtube.com/watch?v=PdkYieD
uVvY

19. CSR Policy Formulation
► Three main players:
1. The state
2. The market
3. Civil society
► Anglo-Saxon Approach: groups are
separate and competitive
► Asian Approach: close cooperation between
public & private sectors
► Continental European: cooperation among
all three

20. Intellectual Property Rights
► Trademarks, brand names, patents,
copyrights
► Must be respected
► There are international conventions that
some countries have not signed

21. MANAGING ETHICS
INTERNATIONALLY
► Three “middle-of-the-road” approaches
1. Respect for human dignity and basic rights
2. Respect for local traditions
3. Respect for institutional context:
understanding of local institutions