Irwin/McGraw-Hill [Modified by EvS] Mgt Mgt 470 Chapter 4 Ethics and Social Responsibility

Irwin/McGraw-Hill 4-2 Ethics / Soc. Resp. Sites (European perspective) (Carnegie Council on Ethics) (Ethical dilemnas) m?zi=1/XJ&sdn=management&zu=http%3A%2F%2F m?zi=1/XJ&sdn=management&zu=http%3A%2F%2F des/

Irwin/McGraw-Hill 4-3 Ethics Around the World Ethics -the study of morality and standards of conduct –Unethical Business Practices  Insider Trading Scandals  Bribes  “Mad” Syndrome –mergers, acquisitions, divestitures

Irwin/McGraw-Hill 4-4 Ethical Concerns in Japan  Political and Business Scandals  Changing Social Climate  Prejudice and Discrimination  Social responsibility Implications from Lobbying  Status of women managers

Irwin/McGraw-Hill 4-5 Examples of unethical conduct  The Recruit company - allowed politicians and influential business people to buy cut-rate stock  Honda of America- settled a $6 million discrimination pay back to 370 African American women  EEOC filed sexual harassment lawsuit against Mitsubishi on behalf of 300 women  Enron…. Arthur Anderson…  Adelphia  Global Crossings  Etc..

Irwin/McGraw-Hill 4-6 Ethical Concerns in Europe The Status of Women Managers – France  women are underrepresented in the corporate management –glass ceiling –enforcement of equal opportunity is weak – Germany  has introduced laws that mandate equal opportunity positions throughout the public sector –legislation hard to enforce

Irwin/McGraw-Hill 4-7 –Great Britain  women are still not well represented at the highest levels of most organizations –legislation is weak –women’s associations are being established to increase political power –British companies are proactively trying to recruit and promote more women

Irwin/McGraw-Hill 4-8 Ethics Around the World (cont.)  Ethical Problems and Concerns in China –Human rights violations trouble MNCs contemplating doing business in China –Piracy, Counterfeiting, and Industrial Spying Problems  U.S. taking hard line against Chinese piracy of intellectual property  Chinese government has closed down some factories and offered rewards for information about piracy  Opaque index –Measures the effect of unclear legal systems and regulations –China’s system is the most opaque  Chinese-sponsored spying on foreign MNCs has increased  Chinese partners in joint ventures may break the agreement and walk off with patents and/or capital

Irwin/McGraw-Hill 4-9 Figure The Opaque Index China Russia Indonesia Turkey South Korea Czech Republic Romania Kenya Ecuador Thailand Guatemala India Poland Venezuela Pakistan Argentina Brazil Taiwan Columbia Japan South Africa Egypt Lithuania Peru Greece Israel Uruguay Hungary Italy Mexico Hong Kong Britain Chile United States Singapore

Irwin/McGraw-Hill 4-10 Ethics Around the World (cont.)  Ethical problems and Concerns in China (cont.) –Status of Women Managers in China  Women managers confront a “glass ceiling” due to: –Cultural stereotypes –Restricted opportunities –Discrimination that is both blatant and subtle

Irwin/McGraw-Hill 4-11 Ethical Concerns in China  Piracy, Industrial Spying, and Counterfeit Problems –Chinese backed industrial spying has increased against u.s. businesses –illegal production of counterfeit cd-roms, music -cd’s, and video-cd’s –patent violations

Irwin/McGraw-Hill 4-12  Women managers –Cultural stereotypes, restricted opportunities, and discrimination limit women managers in China

Irwin/McGraw-Hill 4-13 Regulating Foreign Investment  Regulation of Acquisitions –MNC’s must obtain host government clearance prior to establishing new operations or purchasing ongoing businesses  Purpose: To control own economies and gain independence from foreign companies

Irwin/McGraw-Hill 4-14 Regulating Foreign Investment  Ethical concerns about the reciprocity of the relationship between the home country of the MNC and the host country  Regulation of Acquisitions –The U.S. regulates the acquisition of domestic companies by foreign investors  Other countries are following the U.S.’s lead –EU regulations making it more difficult for non-European companies to do business in Europe –Nonreciprocal trade partners  Nations that sell (export) goods to other countries but do not buy (import) from them

Irwin/McGraw-Hill 4-15  Reciprocity –Is their an ethical and social responsibility to engage in reciprocal trade?  Example: obligations to maintain an import/export balance with trading partner? –retaliation? ongoing issue between Japan and the U.S.

Irwin/McGraw-Hill 4-16 The Corruption Index (fig. 4-2) Finland Singapore Hong Kong United States Germany Japan Taiwan Italy South Africa South Korea Nigeria Brazil Mexico Argentina China Thailand Philippines India Russia Indonesia

Irwin/McGraw-Hill 4-17 Response to Social Obligations Foreign Corrupt Practices Act (1977) makes it illegal to influence foreign officials through personal payment or campaign contributions International Assistance Provides assistance such as food, machinery, and equipment to underdeveloped countries helps to stimulate economies