Authors: Thomas Donaldson & Thomas W. Dunfee Presented by: Michael Mosley

 Education: ◦ PhD University of Kansas, 1976 ◦ BS, University of Kansas, 1967  Outstanding Teacher of The Year Award: ◦ 2005 & 1998  “Named Ethisphere Magazine’s most influential “thought leader” in 2007 ranking of the 100 Most influential people in business ethics (Donaldson).”  Current Professor at Wharton University of Pennsylvania ◦ Previous professor at Georgetown University, University of Virginia, and Loyola University of Chicago

 Founding director of the Wharton Ethics Program  Three-term chair of the Department of Legal Studies and Business Ethics  President of the Society of Business Ethics  Appraised for his path breaking work “Ties That Bind: A Social Contracts Approach to Business Ethics”(Lavengood).

 Hypernorm ◦ Universal norms that apply to all individuals.  Macro Social Contract ◦ Provide global norms  Micro Social Contract ◦ Norms developed for the community  Moral Free Space ◦ Norms that are inconsistent with at least some other legitimate norms existing in other economic cultures

 Dealing with bribery example ◦ Ben & Jerry’s  Can managers successfully maneuver the disturbing gray zones that lie at the intersections of different cultures?  Corporate ethics and values programs are in vogue

 Accept whatever prevails in the host country  Exposes Company  Neglects hypernorms  Exporting all home-country values  “Photocopy”  Disrespectful  Neglects moral free space

 Face conflicts and ethics  Learn how to cut the Gordian Knot  ISCT (International Social Contract Theory)

 2 Aspects of ISCT  Make use of hypernorms  Or called “necessary social efficiency”  Identify Microsocial Contracts

 Important Question ◦ Do cultural differences add up to different microsocial contracts with different authentic, legitimate norms being affirmed by different cultures?

 Kluckhorn, Hofstede, and other theorists have shown the importance of cultural differences  Ethical implications of these differences remains unexplored  Example Answer  A definite right?  Some right?  No right

 Styles of ethical approach: ◦ Foreign Country Type ◦ Empire Type ◦ Interconnection Type ◦ Global Type

 Acknowledges ◦ Universal moral limits ◦ Ability of communities to set moral standards of their own.

 Milton Rokeach value scale  Data indicated that different values, not only existed, but also converged neatly in most instances on a national basis

 One Extreme  Boddewyn and Brewer ◦ “When companies seek competitive advantages, bribery, smuggling, and buying absolute market monopolies are not necessarily ruled out.”  Other Extreme  DeGeorge – ◦ “Every company must produce more goods than harm for the host country”

Hypernorm Consistent norms Moral Free Space Illegitimate Norms: Incompatible with Hypernorms

 Low level bribery  Competing for bids  Should these situations be examples of authentic norms?

 Violates a micro social contract specifying the duties of the agent  Violation of a duty by the person accepting the bribe to the principal for whom he acts as an agent  Has the person making the payment also committed an ethical error?

 Myth: Bribery is accepted wherever it flourishes  Fact: “There is not a country in the world where bribery is either legally or morally acceptable”- Fritz Heiman

 Important question  Is bribery only wrong because most people don’t like it?  Does a hypernorm disallowing bribery exists?  “Positive transnational right on political participation. (Malone).”  Transcultural norm implicit in political writings of Locke, Jefferson, Kant, and Rawls

 What about bribes to employees of corporations?  What about smaller payoffs to public officials?  Is bribery inefficient?  Efficiency Hypernorm

 “Only country to pass a comprehensive act against bribery (Foreign Corrupt Practices Act)  (Palazzolo).”  “From 1977 to 1992 U.S. fined or imprisoned more corporate officers and prominent businessmen than all other capitalist countries combined (Organizational Behavior Reader).”  Level in host countries background institutions

 Never “do in Rome as the Romans do” philosophy  Study of hypernorms suggest that we are more alike than we seem  When the rules of the game are different so are the ethics of playing it  Complying with hypernorms often demands considerable managerial activity  Being true to one’s ethics

 “Donaldson, Thomas- The Wharton School of the University of Pennsylvania." Legal Studies and Business Ethics Department - The Wharton School of the University of Pennsylvania. Web. 23 Feb  Lavengood, Lawrence G. "Thomas Donaldson and Thomas W. Dunfee, :Ties That Bind: A Social Contracts Approach to Business Ethics." Ethics (2001): Print.  Malone, Barry, and Elias Biryabarema. "Uganda Votes after Campaign Marked by Bribery Claims| Reuters." Business & Financial News, Breaking US & International News | Reuters.com. 18 Feb Web. 23 Feb  Palazzolo, Joe. "Challenge Could Break New Ground In FCPA - Corruption Currents - WSJ." WSJ Blogs - WSJ. Web. 23 Feb  Organizational Behavior Reader, The (8th Edition) ( ): Joyce S Osland, Marlene E. Turner, David A. Kolb, Irwin M Rubin: Books." Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & More. Web. 24 Feb 