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Slide multinational management 3e cullen ch15

Chapter 15
Managing Ethical and Social
Responsibility Challenges in
Multinational Companies

Copyright© 2004 Thomson Learning All rights reserved


Learning Objectives
•• Know
Know the
the definitions
definitions ofof international
international business
business ethics
ethics
and
and social
social responsibility
responsibility
•• Understand

Understand some
some basic
basic principles
principles ofof ethical
ethical philosophy
philosophy
relevant
relevant toto business
business ethics
ethics
•• Understand
Understand how
how social
social institutions
institutions and
and national
national culture
culture
affect
affect ethical
ethical decision
decision making
making and
and management
management

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Learning Objectives
•• Understand
Understand the
the implications
implications ofof using
using ethical
ethical relativism
relativism
and
and ethical
ethical universalism
universalism
•• Identify
Identify the
the basic
basic principles
principles and
and consequences
consequences ofof the
the
U.S.
U.S. Foreign
Foreign Corrupt
Corrupt Practices
PracticesAct
Act
•• Understand
Understand how
how international
international agreements
agreements affect
affect
international
international business
business ethics
ethics

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Learning Objectives
•• Understand
Understand the
the differences
differences among
among economic,
economic, legal,
legal,
and
and ethical
ethical analyses
analyses ofof business
business problems
problems
•• Develop
Develop skills
skills inin international
international decision
decision making
making with
with
ethical
ethical consequences
consequences

Copyright© 2005 South-Western/Thomson Learning All rights reserved


International Business Ethics
••
••

Ethics
Ethics deal
deal with
with the
the “oughts”
“oughts” ofof life
life
International
International business
business ethics:
ethics: unique
unique ethical
ethical problems
problems
faced
faced by
by managers
managers operating
operating across
across national
national
boundaries
boundaries
•• More
More complex
complex as
as different
different cultures
cultures do
do not
not agree
agree on
on
what
what one
one “ought”
“ought” toto do
do

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Social Responsibility
•• Idea
Idea that
that businesses
businesses have
have aa responsibility
responsibility toto society
society
beyond
beyond making
making profits
profits
•• Closely
Closely related
related toto business
business ethics
ethics
•• Must
Must take
take into
into account
account the
the welfare
welfare ofof other
other constituents
constituents
inin addition
addition toto stockholders
stockholders

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.1: Areas of Ethical and
Social Responsibility Concerns for the
Multinational Company

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.1: Areas of Ethical and
Social Responsibility Concerns for the
Multinational Company

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Ethical Philosophy
•• Two
Two ways
ways toto consider
consider ethical
ethical decision
decision making
making
•• Traditional
Traditional ethical
ethical philosophy
philosophy
•• Contemporary
Contemporary philosophy
philosophy

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Basic Systems of Ethical
Reasoning
•• Teleological
Teleological ethical
ethical theory
theory
•• Morality
Morality ofof an
an act
act or
or practice
practice comes
comes from
from its
its
consequences
consequences
•• Utilitarianism:
Utilitarianism: what
what isis good
good and
and moral
moral comes
comes from
from
acts
acts that
that produce
produce the
the greatest
greatest good
good for
for the
the greatest
greatest
number
number ofof people
people

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Deontological Ethical Theory
•• Actions
Actions have
have aa good
good or
or bad
bad morality
morality regardless
regardless ofof the
the
outcomes
outcomes they
they produce
produce

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Moral Languages
•• Basic
Basic ways
ways that
that people
people use
use toto make
make ethical
ethical decisions
decisions
and
and toto explain
explain their
their ethical
ethical choices
choices
•• Six
Six basic
basic ethical
ethical languages
languages
•• Virtue
Virtue and
and vice
vice
•• Self-control
Self-control
•• Maximizing
Maximizing human
human welfare
welfare
•• Avoiding
Avoiding harm
harm
•• Rights/duties
Rights/duties
•• Social
Social contract
contract
Copyright© 2005 South-Western/Thomson Learning All rights reserved


National Differences in
Business Ethics and Social
Responsibility
•• National
National culture
culture and
and social
social institutions
institutions affect
affect ethical
ethical
behavior
behavior and
and social
social responsibility
responsibility

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Messner and Rosenfeld
•• Argue
Argue that
that specific
specific national
national culture
culture and
and social
social
institutions
institutions affect
affect ethics
ethics
•• National
National cultures:
cultures: high
high achievement,
achievement, high
high
individualism,
individualism, high
high universalism,
universalism, high
high materialism
materialism
are
are all
all related
related toto higher
higher deviance
deviance
•• Social
Social institutions:
institutions: high
high industrialization,
industrialization, capitalist
capitalist
systems,
systems, lower
lower family
family breakdown
breakdown and
and highly
highly
accessible
accessible educational
educational systems
systems should
should all
all
encourage
encourage deviance
deviance
Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.2: A Model of Institutional
and Cultural Effects on Business
Ethics Issues and Management

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.3: Comparison of Key
Ethical Issues Identified by Senior U.S.
and EU Managers

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.4: Management of Key
Ethical Issues in U.S. and European
Companies

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.5: National Differences in
Beliefs Regarding Ethical Codes

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Questionable Payments and
U.S. Foreign Practices Act
•• Questionable
Questionable payments
payments
•• Bribes
Bribes or
or gifts
gifts toto expedite
expedite government
government actions
actions or
or toto
gain
gain advantage
advantage inin business
business deals
deals
•• InIn many
many countries,
countries, people
people routinely
routinely offer
offer gifts
gifts ofof
bribes.
bribes.

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.6: Bribe Payers Index

Copyright© 2005 South-Western/Thomson Learning All rights reserved


U.S. Foreign Corrupt Practices
Act (FCPA)
•• Forbids
Forbids illegal
illegal payments
payments or
or gifts
gifts toto officials
officials ofof foreign
foreign
governments
governments for
for the
the sake
sake ofof getting
getting or
or retaining
retaining
business
business

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.7: Excerpts from the Foreign
Corrupt Practices Act and Fines

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.7: Excerpts from the Foreign
Corrupt Practices Act and Fines

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.7: Excerpts from the Foreign
Corrupt Practices Act and Fines

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 15.7: Excerpts from the Foreign
Corrupt Practices Act and Fines

Copyright© 2005 South-Western/Thomson Learning All rights reserved


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