Details of ethics and social responsibility

1. Social Responsibility and Ethics in
International Business

2. Ethical Behavior
Ethical behavior usually refers to behavior
that conforms to generally accepted
social norms.

3. 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

4. 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

5. Spectrum of Effects
No Trade
Free Trade
•Jobs migrate
•Low wages
•Poor conditions
•Fewer jobs in
developing countries
•Higher prices
•Fewer products
Trade with Social
Responsibility
How? Code of Ethics

6. Areas of Social Responsibility
 Organizational stakeholders
 Natural environment
 General social welfare

7. Figure 5.3 Approaches to Social
Responsibility
Least
Responsible
Most
Responsible
Obstructionist Defensive Accommodative Proactive

8. Obstructionist Stance
 Do as little as possible to address social
or environmental problems
 Deny or avoid responsibility
 Examples
– Astra
– Nestle
– Danone

9. Defensive Stance
 Do what is required legally, but
nothing more
 Corporate responsibility is to generate
profits
 Example
– Philip Morris

10. 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

11. 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

12. Managing Social Responsibility
Planning
Decision Making
Consideration
Evaluation

13. Implementing Social Responsibility
 Legal Compliance
 Ethical Compliance
 Philanthropic (Social work) Giving

14. Informal Dimensions of Social
Responsibility
 Leadership
 Organizational culture
 Whistle-blowing

15. Corporate Social Audit
 Tool for the evaluation of social
responsibility effectiveness
 Formal and thorough analysis
 Conducted by task force

16. Steps in Corporate Social Audit
Define social goals
Analyze resources devoted
to each goal
Determine degree of
achievement for each goal
Make recommendations