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4: ethics international business ethics : the accepted principles of right or wrong Business Ethics : the accepted principles of right or wrong governing the conduct of business people Ethical strategy : A strategy, or course of action, that does not violate these accepted principles *** No clear-cut what is right or wrong, it depends upon ones cultural perspectives o ethical issues in international business

ethical issues in international business

1.Employment Practice

2.Human Right

3.Environmental Pollution

4.Corruption

5.Moral Obiligation

tregedy of the commons

Foreign Corrupt Practices Act

Convention on Combating bribery of Foreign Public Officials in International Business Transactions

Social Responsibility

1. Employee Practice o wage, working hours, and working environment

2. Human Right o o o basic human rights still are not respected in many countries Human rights such as freedom of speech, freedom of assembly, freedom of movement, and so on Those are taken for granted in developed countries , but are not universally accepted

3. Environmental Pollution o o arise when environmental regulations in host nations are far interior to those in the home nation tragedy of the commons o it occurs when a resource held in common by everyone, like the ocean or the atmosphere o but owned by no one o result is degradation

4. Corruption o Foreign Corrupt Practices Act o outlawed the payments of bribes to foreign government officials to gain business o But, allow for facilitating payments It is not payments to receive contracts or to obtain preferential treatment they are payments to ensure receiving the standard treatment Convention on Combating bribery of Foreign Public Officials in International Business Transactions o Adopted by the Organization for Economic Cooperation and development o Obliges member states to make the bribery of foreign public officials a criminal offense o Exclude facilitating payments made to expedite routine government action are allowed

5. Moral Obligation o Social responsibility o ideal that business people should take the social consequences of economic actions into account when making business decisions o Successful business need to know noblesse oblige and give something back to societies o Noblesse oblige : Honorable and benevolent behavior considered the social responsibility of people in high birth

5 things to do 1. hiring and promotion a. favor hiring and promoting people with a well grounded sense of personal ethics b. hire people who have a strong sense of personal ethics ex: psychological test c. Should not promote those who have displayed poor ethic d. Prospective employees should find out as much as they can about the ethical climate in an organization 2. Organization a. business must explicitly articulate values that place a strong emphasis on ethical behavior i. code of ethics b. leaders should give life and meeting to the code of ethics i. by repeatedly emphasize their importance, and act to them c. Business should put in place a system of incentives ex: rewards and Sanction 3. Leadership a. make sure that leaders within in the business not only articulate the rhetoric of ethical behavior but also act in manner that is consistent with that rhetoric 4. Decision Making Process a. Five steps managers need to ... i. Identify which stakeholder a decision would affect and in what way 1. internal stakeholders (employees, the board of directors, and stockholders) 2. external stakeholders (customers, suppliers, lender, government, union) 3. **moral Imagination-Stand in the shoes of a stakeholder and ask how a proposed decision might impact that stakeholder ii. Determine whether a proposed decision would violate the fundamental rights of any kind stakeholders iii. Establish Moral Intent iv. Company should engage in ethical behavior v. Audit Decisions 1. ethic officers 5. Develop Moral Courage a. Employees in an international business may need significant moral courage b. Managers need to be able to walk away from decisions that are profitable, but unethical c. Employees need to be able to say no no to actions that are unethical