Ethics and the conduct of business 8th by john boatright and smith 2017 chapter 14

Ethics and the Conduct of Business
Eighth edition

Chapter 14
International Business
Ethics

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


Modules
• Introduction: International Business Ethics
• 14.1: Different Standards
• 14.2: Guidelines for Multinationals
• 14.3: Wages and Working Conditions
• 14.4: Foreign Bribery
• 14.5: Human Rights Abuses
• Conclusion: International Business Ethics

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


Learning Objectives (1 of 2)
•

•

14.1: Categorize the various ethical problems that
multinational companies may face in their foreign
operations, especially while conducting business in lessdeveloped countries
14.2: Explain how the moral concepts of rights, welfare, and

justice offer guidelines for conducting international business
and the role of global civil society in developing and
enforcing these guidelines

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


Learning Objectives (2 of 2)
•

•

•

14.3: Describe the ethical issues in determining wages and
standards for working conditions in international business,
and factors that multinational corporations and foreign
contractors should consider to improve on those set by
market mechanisms
14.4: Evaluate the various forms of bribery and factors that
foster them, the ethical problems with bribery, and the
diverse means and strategies for combating bribery
14.5: Relate the challenges multinational companies face in
dealing with repressive governments, and how a strategy of
constructive engagement can be applied to operations in
countries with a record of human rights abuses

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

Introduction: International Business
Ethics
• Global marketplace
• Diversity of business standards
• Repressive governments
• Corruption
• Affects host country development

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


14.1: Different Standards (1 of 2)
Objective: Categorize the various ethical problems that multinational companies may face
in their foreign operations, especially while conducting business in less-developed
countries

• 14.1.1: Relevant Differences
– Conditions in countries differ

• 14.1.2: Variety of Outlooks
– Overview
– Cultural differences

• 14.1.3: Right to Decide
– Right of the host country

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


14.1: Different Standards (2 of 2)

Objective: Categorize the various ethical problems that multinational companies may face
in their foreign operations, especially while conducting business in less-developed
countries

• 14.1.4: Business Necessity

– Necessary practice for business

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


14.2: Guidelines for Multinationals (1 of
2)
Objective: Explain how the moral concepts of rights, welfare, and justice offer guidelines
for conducting international business and the role of global civil society in developing and
enforcing these guidelines

• 14.2.1: Rights

– Fundamental International rights
– Rights-based guidelines drawback

• 14.2.2: Welfare
– Richard DeGeorge guidelines

• 14.2.3: Justice
– Distribution of benefits
– Violation of market rules
Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved

14.2: Guidelines for Multinationals (2 of
2)
Objective: Explain how the moral concepts of rights, welfare, and justice offer guidelines
for conducting international business and the role of global civil society in developing and
enforcing these guidelines

• 14.2.4: International Codes
– International codes

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


Figure 14.1: Moral Authority for Codes of
International Business Ethics30

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


14.3: Wages and Working Conditions
Objective: Describe the ethical issues in determining wages and standards for working
conditions in international business, and factors that multinational corporations and
foreign contractors should consider to improve on those set by market mechanisms

• 14.3.1: Setting Wages

– Obstacles
– Argument for market wages
– Arguments against market wages

• 14.3.2: Working Conditions
– Overview

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


14.4: Foreign Bribery (1 of 2)
Objective: Evaluate the various forms of bribery and factors that foster them, the ethical
problems with bribery, and the diverse means and strategies for combating bribery

• 14.4.1: What Is Bribery?
– What is bribery

• 14.4.2: What's Wrong with Bribery?
– Economic effects
– Noneconomic consequences

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


14.4: Foreign Bribery (2 of 2)
Objective: Evaluate the various forms of bribery and factors that foster them, the ethical
problems with bribery, and the diverse means and strategies for combating bribery

• 14.4.3: Combating Bribery
–
–
–
–

Problems
Solution
Anti-bribery strategies
Foreign Corrupt Practices Act

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


Table 14.1: World’s 10 Industry Sectors
Most Likely to Involve Bribery
Industry Sector

Score (0–10)

Public works contracts and construction

5.3

Real estate, property, legal and business services

6.1

Utilities

6.1

Oil and gas

6.2

Mining

6.3

Power generation and transmission

6.4

Pharmaceutical and healthcare

6.4

Heavy manufacturing

6.5

Arms, defence and military

6.6

Fisheries

6.6

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


Table 14.2: Strategies for Combating
Bribery
Anti-Bribery Tactics and Goals

Score (0–10)

•

Limit government involvement and promote free
markets and healthy competition
Design and enforce proper regulations to clarify and
simplify processes

Alter the government’s role in the economy

Pay civil servants more to remove the need for extra
income
Make civil service jobs so attractive that the risk of
losing them will deter bribery

Reduce the temptation to demand or accept
bribes

Carefully select projects to eliminate those most
vulnerable to bribery
Closely monitor approved projects
Have funding agencies and loaning investment banks
perform checks

Eliminate bribery in government projects

Create special law enforcement units to uncover and
prosecute instances of bribery

Promote international standards against corruption to
combat bribery
Use international cooperation to recover plundered
assets

Focus on enforcing laws to prevent and
criminalize bribery

•

•
•

•
•
•

•
•
•

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


14.5: Human Rights Abuses
Objective: Relate the challenges multinational companies face in dealing with repressive
governments, and how a strategy of constructive engagement can be applied to
operations in countries with a record of human rights abuses

• 14.5.1: Constructive Engagement

– Constructive engagement strategy

• 14.5.2: Liability for Abuses
– MNCs indirectly accountable for abuses

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved


Conclusion: International Business
Ethics
• MNCs have social responsibility
• Diverse political and legal systems
• Diverse standards
• Guidelines for international business
• International codes of ethics

Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved