0. Ethical Issues in the Global Arena. Chapter 10. Professor Craig Diamond BA 385 October 28, 2009. 0. Outline of Topics. The New World of International Business - Globalization Multinational Corporations (MNCs) and the Global Environment Ethical Issues in the Global Environment
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Professor Craig Diamond
October 28, 2009
The Post-World War II Decade
The New International Order
The Growth Years
The New, New World
The Troubled Years
A process by which firms increasetheir awareness of the influence ofinternational activities on their futureand conduct transactions with firmsfrom other countries
The global economic integration of manyformerly national economies into oneglobal economy
From: Center for the Study of American Business, 2001.
Home CountryStakeholder Pressures
Host CountryStakeholder Pressures
The Multinational Corporation
As of 2007: 1,315 facilities certified to 8000 standard world-wide
Necessary for profits in order to do business
Form of commission, tax, or compensation
Wrong and illegal in most developed nations
Managers should not deal with corrupt governments
Benefits recipient only
Creates dependence on corruption
Deceives stockholders and costscustomers
Economic harm to host country
Relatively small sums of money given for the purpose of getting minor officials to:
Relatively large amounts of money given for the purpose of influencing officials to make decisions or take actions that they otherwise might nottake.
Foreign Corrupt Practices Act (1977)
Transparency International (1993)
OECD Antibribery Initiatives
UN Conv. Against Corruption (2005)
Individual Country Initiatives
Growing anticorruption movement...
of the Multinational Corporation
Home CountryEthical Standards
Host CountryEthical Standards
Ethics in the international environment is more complex than national. Firms have great power in LDCs, and thus great responsibility.
International LawGlobal Codes of Conduct
BROAD MIDDLE GROUND
Mix of Home and Host Country Standards
Application of Ethical Principles
Questions to be Resolved by Management:
Which ethical standards will be used?
Which ethical standards will transcend national boundaries?
Worker and product safety? Fair treatment?
Health? Discrimination? Freedom? Minimum pay?
Consumer rights? Environmental Protection?
What constitutes moral minimums in each category?
Moral freespace norms
consist of transcultural values including fundamental human rights
consist of norms that are culturally specific, but consistent with hypernorms
consist of strongly held cultural beliefs in particular countries that are in tension with hypernorms
consist of norms that are incompatible with hypernorms