Sustainable managementMetropolia, Business Ethics IP week 8 CSR and International Business
Say your business is CSR, Would you do business in? • United Arab Emirates • High risk of gender issues • Ukraine • High risk of bribery/extortion • Myanmar (Burma) • High risk of unintended support to totalitarian regime • China • High risk of labour/environment issues, intellectual property rights infringement.
OECD guidelines for MNE • General policies • PPP, human rights, capacity building, stakeholder management, corporate conduct • Disclosure • Transparent reporting; timely, regular, reliable, and relevant information • Employment • Trade unions, no discrimination, no child labour, no compulsory labour
OECD guidelines for MNE • Environment • Not only natural environment, also public safety and health, environmental management system, education and training in these matters • Combating Bribery • Not offer, (in)direct, promise, give or demand bribes leading to improper advantage • Consumer Interests • Ensure safety, quality of goods and services • Let consumers be heard
OECD guidelines for MNE • Science and technology • Transfer and diffusion of technologies, with regards to intellectual property rights • Competition • Refrain from anti-competitive agreement among competitors • Taxation • Contribute to public finances, by timely tax liability payments
Ethics in International Business • May (or should) western business adapt to local conditions? • Pay minimum wage in low wage country? • (Minimum wage is often below minimum subsistence level?) • And benefit from poor developed governance? • Also when the local conditions are against your own ethics?
Culture in International Business; Geert Hofstede • Power distance • Collectivism vs. individualism • Femininity vs. masculinity • Uncertainty avoidance • Long Term Orientation
Cultural relativism “This is how things are done around here” “When in Rome do as the Romans do” Cultural relativism: what’s morally right/wrong in one culture, need not to be right/wrong in another culture • But this poses problems: • Some actions will be condemned by everyone • A number of moral rules can be universally endorsed; do not lie, steal, kill etc.
Cultural determinism • Is untenable for some reasons • Cultures are not homogenous; there is always diversity, not all values and norms are share equally by all members • Cultures are not closed; it is not static but they change, e.g. globalization • Often relativism is claim for tolerance, but itself is typical western cultural assumption, based upon liberal ideas; cultures do clash sometimes
Corruption & Transparency 1993 Transparency International (TI) Founded 2002 Publish What You Pay campaign launched 2003 Extractive Industries Transparency Initiative (EITI) launched 1996 UN Declaration Against Bribery and Corruption adopted 2004 Anti-corruption added as 10th principle of UN Global Compact 1993 94 95 96 97 98 99 00 01 02 03 04 05 06 2006 TI Bribe Payers Index launched 2002 Business Principles for Countering Bribery Launched 2003 TI Global Corruption Barometer launched 1995 TI Corruption Perception Index (CPI) released 2003 UN Convention Against Corruption adopted
Terminology • Bribing officials is a felony in all countries in the world Acc. to Dutch penal code art. 177: He who presents a civil servant with a gift or promises a gift, or renders him a service with the aim of making him do or not do something, contrary to his duty • Bribery; payment is offered • Extortion; payment is asked • Grease payments; for smooth process within duty • Gifts; to express regards and respect, to build up trust and personal to business relationships
Gift vs. Bribes • Would you accept a bottle of wine as gift? • And if it is worth 50,- €? • Regulation creates grey areas. • Usefull guideline questions are • Do you dare to admit that you got it? • Is the gift in proportion to the relationship • Do you feel that you are obligated somehow in the future?
Transparency International • Corruption Perception Index • List of 180 countries on perceived levels of public sector corruption . By 14 expert opinions. • Bribe Payers’ Index • Supply side of corruption, ranks 15 countries and 17 industry sectors • Global Corruption Index • Public opinion survey of perception and experience of corruption in more than 60 countries.