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Ethics and Social Responsibility for International Firms

Ethics and Social Responsibility for International Firms. Management 352. Drivers of Corporate Social Responsibility.

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Ethics and Social Responsibility for International Firms

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  1. Ethics and Social Responsibility for International Firms Management 352

  2. Drivers of Corporate Social Responsibility • From a utilitarian perspective, corporate social responsibility is an instrument useful to help achieve its performance objectives defined in terms of profitability, return on investment, or sales volume • The positive duty suggests that businesses may be self-motivated to have a positive impact regardless of social pressures calling for social initiatives. When this positive duty is prevalent, corporate social responsibility principles are a component of the firm’s true identity, expressing values considered by organizational as central, enduring, and distinctive values to the firm

  3. Drivers of Corporate Social Responsibility (contd.) • From a negative duty approach, businesses are compelled to adopt social responsibility initiatives in order to conform to stakeholder norms defining appropriate behavior. When negative duty is prevalent, self-motivation is replaced by corporate social responsibility initiatives that are a reaction to what is expected from stakeholders

  4. Moral Philosophy The set of principles or rules that people use to decide what is right or wrong. Moral philosophies help explain why a person believes that a certain choice among alternatives is ethically right or wrong.

  5. Moral Philosophies of Relevance to Business Ethics Teleology: an action or behavior is acceptable or right if it is responsible for producing the desired outcomes. Two key teleological precepts that serve as guides for managerial decision-making are • Egoism: it evaluates how right or acceptable a behavior is depending upon its consequences on the person • Utilitarianism: it holds that actions should be judged by their consequences; however, unlike egoists, utilitarians claim that behaviors that are moral produce the greatest good for the greatest number of people

  6. Moral Philosophies of Relevance to Business Ethics (contd.) Deontology: an ethical theory holding that acting from a sense of duty rather than concern for consequences is the basis for establishing our moral obligation The Theory of Justice: there are three fundamental guidelines that the theory of justice provides to managers in their decision-making: • Be equitable • Be fair • Be impartial

  7. Moral Philosophies of Relevance to Business Ethics (contd.) Cultural Relativism: It asserts that words such as “right,” “wrong,” “justice,” and “injustice” derive their meaning and value from the attitudes of a given culture. Thus, to a cultural relativist, ethical standards are culture-specific, and one should not be surprised to find that an act that is considered quite ethical in one culture might be looked upon with disdain in another

  8. A Decision Tree Incorporating Ethics in International Decision Making Does the International Business Decision (IBD) create the greatest benefit for everyone affected? (Teleology) Are there overriding factors that justify the suboptimization of the greatest benefits for everyone affected? No YES NO YES NO YES NO NO Does the IBD respect the rights of all persons affected? (Deontology) Are there overriding factors that justify the abrogation of a right? NO Does the IBD respect the canons of justice? (Theory of Justice) Are there overriding factors that justify the violation of a canon of justice? NO Does the IBD respect the cultural norms of affected parties, both in home and host countries? (Cultural Relativism) Are there overriding factors that justify ignoring the cultural norms of the affected parties? NO Reject the IBD Accept the IBD

  9. Fig 17-1: Ethical and Legal Distinctions in International Management China United States Alcohol Consumption Usury Women Drivers Child Labor Facilitating Payments Yes A Yes Alcohol Consumption Usury Women Drivers Legal Legal Prayer at Work No Child Labor Facilitating Payments Prayer at Work No B Ethical No Yes No Ethical Yes Islamic Countries Yes Facilitating Payments Prayer at Work Child Labor Legal Alcohol Consumption Usury Women Drivers No Ethical No Yes

  10. Ex. 17-1: Least Corrupt Countries Worldwide

  11. Ex. 17-1: Least Corrupt Countries Worldwide

  12. Ex. 17-2: Corruption in Western and Eastern Europe

  13. Ex. 17-3: Corruption in North, Central, and South America

  14. Ex. 17-4: Corruption in Middle East and Asia

  15. Ex. 17-5: Corruption in Northern and Southern Africa

  16. Ex. 17-6: Worst Bribe Payer Countries

  17. Table 17-7: Factors Responsible for Bribes

  18. What Companies Can Do to Integrate Ethics and Business Conduct • The top management must be committed to the company’s ethics program • A written company code that clearly communicates management’s expectations must be developed • Provide an organizational identity to the ethics program • A formal program must be in place to implement the ethics code • The line managers, not consultants, do training in ethics • Strict enforcement of codes is essential • Actions speak louder than words

  19. MAJOR HEALTH ISSUES • ACQUIRED IMMUNE DEFICIENCY SYNDROME (AIDS) • BIRD FLU • DEATH WHILE ON ASSIGNMENT

  20. SAFETY CONCERNS • TERRORISM • CRIME • KIDNAPPING • OTHER TRAUMATIC • 911 • TSUNAMI

  21. RESPONSE • ASSESS THE RISK • PREAPRE A CRISIS MANAGEMENT PLAN • PREPARE TRAVELERS AND INTERNATIONAL ASSIGNEES (1A’S) • PLAN,INSURE,TRAIN,GET INVOLVED

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