BA 385: What MNCs Owe Society. Chapter Nine: ETHICAL ISSUES in the GLOBAL ARENA. Internationalization. Globalization. Concepts of Global Business. 1945-55. 1955-70. 1970-80. The Post-World War II Decade. The Growth Years. The Troubled Years.
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Chapter Nine: ETHICAL ISSUES in the GLOBAL ARENA
The Post-World War II Decade
The Growth Years
The Troubled Years
A period of reconstruction dominated by the United States
Japanese and European firms recover and the first U.S.-based international firms become multinational
A U.S. balance of payments deficit and worldwide oil crisis have a negative impactEras of Internationalization
The New International Order
The New, New World
Though the U.S. role in the world economy is diminished, it is pressured to be a world leader in the ethics arena
A backlash against globalism began. In the early 2000’s the US
lost the leadership role in ethics due to war against Iraq and
scandalous business behavior.Eras of Internationalization
Host CountryStakeholder Pressures
The Multinational CorporationThe Dilemma of the Multinational Corporation
Health and safety
Freedom of association and Right to Collective Bargaining
Form of commission, tax, or compensation
Compromise personal beliefs
Promotes government corruption
Once started, never stops
Prohibits taking a stand for honesty, morality, ethics
Benefits recipient only
Creates dependence on corruption
Deceives stockholdersArguments For and Against Bribery
Relatively small sums of money given for the purpose of getting minor officials to:
Relatively large amounts of money given far the purpose of influencing officials to make decisions or take actions that they otherwise might nottake. If the officials considered the merits of the situation only, they might take same other action.Bribes versus Grease Payments
BROAD MIDDLE GROUND
Mix of Home and Host Country Standards
Application of Ethical PrinciplesEthical Choices in Home versus Host Country Situations
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?
Global Reporting Initiative
Global Sullivan Principles
OECD Guidelines for Multinational Enterprises
Principles for Global Corporate Responsibility: Benchmarks
UN Global CompactGlobal Standards from International Organizations(see p. 324 in text)
The right to ownership of property
The right to freedom from torture
The right to a fair trial
The right to nondiscriminatory treatment
The right to physical security
The right to freedom of speech and association
The right to minimal education
The right to political participation
The right to subsistenceFundamental International Rights
Produce more good than bad for the host country
Contribute to host country’s development
Respect the human rights of their employees
Pay their fair share of taxes
Respect local cultural beliefs that do not violate moral norms
Cooperate with the government to develop and enforce background institutionsSeven Moral Guidelines for MNCs