International business 6e griffin chapter 5

ethics and social
responsibility in
international
business

international business, 5th edition

chapter 5


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 crosscultural and international contexts

5-2


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

5-3

Exporting Jobs or
Abusing People?
• Minute Maid
• Tropicana
• Nestle
• Nike

5-4


Ethics
Ethics is an individual's
personal beliefs
about
whether a
decision,
behavior, or action
is right or
wrong.

5-5


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
5-6


Figure 5.1 Ethics in a
Cross-Cultural Context
Behavior of
Organization
Toward Employees

Behavior of
Employees
Toward Organization

Cultural
Context

Behavior of Employees
and Organization
Toward Other Economic Agents
5-7


How Organizations Treat
Employees
Some businesses in
Africa have taken

steps to educate
their employees
about how AIDS is
contracted.

5-8


Acceptability of Bribery

5-9

• Acceptable

• Unacceptable

– Russia

– Australia

– China

– Sweden

– Taiwan

– Switzerland

– South Korea

– Austria


Managing Ethical Behavior
Across Borders
Guidelines or codes
Ethics training
Organizational practices
Corporate culture

5-10


Corporate Social Responsibility
Corporate social responsibility is the
set of obligations an organization
undertakes to protect and enhance the
society in which it functions.

5-11


Areas of Social Responsibility

Organizational
stakeholders

Natural
environment

5-12

General social
welfare


Examples of Companies with a
Commitment to CSR

5-13

• L.L. Bean

• Dell Computer

• Toyota

• DaimlerChrysler

• Lands’ End

• BP

• 3M

• Honda


Map 5.1 Social Responsibility
Hot Spots

5-14


Approaches to Social
Responsibility
Obstructionist
Defensive
Accommodative
Proactive

5-15


Figure 5.3 Approaches to
Social Responsibility

Most
Responsible

Least
Responsible

Obstructionist

5-16

Defensive

Accommodative

Proactive


Obstructionist Stance
• Do as little as possible to address social or
environmental problems
• Deny or avoid responsibility
• Examples
– Astra
– Nestle
– Danone
5-17


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

5-18


Accommodative Stance
• Meet ethical and legal requirements and
more
• Agree to participate in social programs

• Match contributions by employees
• Respond to requests from nonprofits
• No proactive behavior to seek such
opportunities

5-19


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

5-20


Managing Compliance Formally

Legal compliance

Ethical compliance

5-21

Philanthropic giving

Managing Compliance Informally

Leadership

Organizational
culture

5-22

Whistle-blowing


Evaluating Social Responsibility
A corporate social audit is a formal and
thorough analysis of the effectiveness of
the firm’s social performance.

5-23


Steps in Corporate Social Audit
Define social goals
Analyze resources devoted
to each goal
Determine degree of
achievement for each goal
Make recommendations
5-24

Actors in
Policy Formulation Process

The state

The market

5-25

Civil society