international business, 5 th edition chapter 5 ethics and social responsibility in international...
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intern
ation
al bu
siness, 5
th edition
chapter 5ethics and social responsibility in international business
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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 cross-cultural and international contexts
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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
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Exporting Jobs or Abusing People?
• Minute Maid
• Tropicana
• Nestle
• Nike
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Ethics
Ethics is an individual's personal beliefs about whether a
decision, behavior, or action is right or wrong.
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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
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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
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How Organizations Treat Employees
Some businesses in Africa have taken steps to educate their employees about how AIDS is contracted.
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Acceptability of Bribery
• Acceptable
– Russia
– China
– Taiwan
– South Korea
• Unacceptable
– Australia
– Sweden
– Switzerland
– Austria
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Managing Ethical Behavior Across Borders
Guidelines or codes
Organizational practices
Corporate culture
Ethics training
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Corporate Social Responsibility
Corporate social responsibility is the set of obligations an organization undertakes to protect and enhance
the society in which it functions.
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Areas of Social Responsibility
Organizationalstakeholders
General socialwelfare
Natural environment
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Examples of Companies with a Commitment to CSR
• L.L. Bean
• Toyota
• Lands’ End
• 3M
• Dell Computer
• DaimlerChrysler
• BP
• Honda
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Map 5.1 Social Responsibility Hot Spots
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Approaches to Social Responsibility
Obstructionist
Defensive
Accommodative
Proactive
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Figure 5.3 Approaches to Social Responsibility
LeastResponsible
MostResponsible
Obstructionist Defensive Accommodative Proactive
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Obstructionist Stance
• Do as little as possible to address social or environmental problems
• Deny or avoid responsibility
• Examples
– Astra
– Nestle
– Danone
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Defensive Stance
• Do what is required legally, but nothing more
• Corporate responsibility is to generate profits
• Example
– Philip Morris
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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
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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
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Managing Compliance Formally
Legal compliance
Philanthropic givingEthical compliance
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Managing Compliance Informally
Leadership
Whistle-blowingOrganizational
culture
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Evaluating Social Responsibility
A corporate social audit is a formal and thorough analysis of the
effectiveness of the firm’s social performance.
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Steps in Corporate Social Audit
Define social goals
Analyze resources devoted to each goal
Determine degree of achievement for each goal
Make recommendations
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Actors in Policy Formulation Process
The state
Civil societyThe market
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Regional Stereotypes
Anglo-Saxonapproach
Continental European approach
Asianapproach
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Regulating International Ethics and Social Responsibility
• Foreign Corrupt Practices Act (FCPA)
• Alien Tort Claims Act
• Anti-Bribery Convention of the Organization for Economic Cooperation and Development
• International Labor Organization (ILO)