What are ETHICS? What does ETHICAL mean?

What are Ethics?  ETHICS – ____________that help us tell the difference between ________and _________ and encourage us to do the right thing.

Business Ethics  “ concerned with the behaviour of businesses in the treatment of:  __________  ___________  ____________  In larger organizations, business ethics determines policies for:  Environmental issues  Social responsibility  Human rights

Stretch your thinking…  What are some products that could be considered unethical and morally wrong?  Why?

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Business Ethics Business ethics A ____________________ that management or individuals follow when making decisions facing their company. Used under license from Shutterstock, Inc.

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Business Ethics The ____________ used when making decisions include:  Domestic and international laws  The company’s code of ethics and corporate governance (e.g. p.160)  The personal values of the individual making the decision

Corporate Code of Conduct – Levi’s Our success as a company is built upon an unwavering commitment to responsible business practices. Integrity has always been at the heart of how we operate and is one of Levi Strauss & Co.’s (LS&CO.) core corporate values. For more than 155 years, we have demonstrated the highest ethical standards in the conduct of our business.

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Business Ethics – HOW do you determine ethical behaviour? Decision makers can use the ______________ method to solve ethical dilemmas: “How would we feel if everyone knew about the decision we made?” If they are not concerned, they have likely made an ethical choice. If they are, they have probably not made the right decision.

Ethical Dilemmas  ____________ = a situation where there is a difficult choice between two or more options  ______________= a moral problem with potential right or wrong answers  Happens when a company has a decision to make that weighs values and morals against profit and competitiveness

What would you do?  Your friend asks you to add a few extra hours to a work time sheet for him/her, but you know that they did not put in the time?  A salesperson in an electronics store offers to sell you an iPod after hours, at a discount price?  You are aware that the teller gave you back too much money when completing a banking transaction?

Ethical Issues in International Business  Environmental Issues  Sweatshops  Corporate Corruption  Dumping  Poverty Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Ethical Issues in International Business ____________________issues  ________________________ ability to meet human consumption while maintaining the environment—is a critical issue for businesses  Many companies have been responsible for pollution and resource depletion  Companies and governments often resist environmental plans that will impede economic growth

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Ethical Issues in International Business _______________ Factories in underdeveloped and developing countries in which employees work in unsafe environments, are treated unfairly, and have no chance to address those conditions. Why do sweatshops exist? Global competitiveness, corporate greed, and consumer expectations of low prices. Companies that own factories in developing nations must ensure that workers are paid a living wage and are able to speak up against abuses.

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Ethical Issues in International Business? ____________________ The involvement in illegal activities, such as bribery and fraud, to further one’s business interests.

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Ethical Issues in International Business ____________________ Selling products in a foreign country below the cost of production or below the price in the home country. ________________________ An anti-competitive business practice in which foreign companies price their products below market value to increase sales and force domestic competition out of business, then raise their prices.

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Ethical Issues in International Business ______________  Over one-quarter of the world’s population lives in intense poverty—accompanied by hunger, lack of shelter and medical care, limited access to education, high rates of disease, etc. Used under license from Shutterstock, Inc.

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Ethical Issues in International Business ___________________  Microcredit —the granting of very small loans to spur entrepreneurship—is one way that poverty is being addressed  Microcredit loans are mainly granted to women, who use the loans to start small businesses and their earnings to support their families

ETHICAL REASONING In doing business internationally, is ethical behavior determined by the norms of a host country’s value system?

Two Positions 1. ________________= ABSOLUTE, universal truths 2. ________________= values based on country’s cultural values

An Ethical Imperialist’s View  Certain _______________ apply everywhere  ________________exceed other cultures in what is right or wrong  A company should maintain home-country ethics where it operates because it is superior to others  Example: a company is expanding to an emerging market where bribery is accepted. HQ detests bribery and refrains from bribing officials.

A Cultural Relativist’s View  _______________________________  Companies should adopt _______ethics wherever it operates  Truth is relative  Right and wrong are determined within a specific situation  “When in Rome, do as the Romans do” Example: opening a factory in a developing country and using child labor is appropriate and in accordance with local standards of conduct.

However… common values do exist EXAMPLES:  Worker safety  Environmental protection  Respect, fairness, honesty, responsibility As adopted by the UNIVERSAL DECLARATION OF HUMAN RIGHTS ….. see page 162

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Business Ethics Ethical ImperialismCultural Relativism One set of values for all culturesValues are dependent on the culture Right and wrong are the same in all cultures Right and wrong depend on local values and it should be respected A person’s ethics are not situational When in Rome, do as the Romans do

Trade Organizations help....  The world’s population  The free flow of goods and services  May be GLOBAL (WTO, APEC) or REGIONAL to help domestic countries expand OTHER non-governmental organizations can also help the world’s population

Non-Governmental Organizations (NGOs)

Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Non-Governmental Organizations (NGOs) Non-governmental organizations (NGOs) funded through charitable contributions Non-profit organizations with a service and development focus that are composed mostly of volunteers, and are predominantly funded through charitable contributions. NGOs may centre on trade, education, youth, improving the environment, human rights, or other issues. Example… Doctors without Borders Current Recruitment Needs Orthopedic Surgeons MSF is urgently seeking orthopedic surgeons for humanitarian programs in Democratic Republic of Congo, Haiti, Nigeria, and Sri Lanka for a minimum of one month.

War Child invests in projects that help former child soldiers reintegrate in society, and in projects that prevent children from joining armed groups. In nearly all the countries where War Child has programmes, children are or were actively involved in the fighting. Examples of countries …… include DR Congo, Sierra Leone, Northern Uganda, Colombia and Sudan. War Child has no programmes exclusively for child soldiers. War Child organises activities for mixed groups of children and young people that encourage them to cooperate and to develop their own talents and social skills…. promotes their reintegration into society. War Child's activities are aimed at bringing former child soldiers, other children and people from the community together in order to restore trust. What does War Child do to help ….. helps child soldiers? HELPS CHILD SOLDIERS Every year, 300,000 children are actively deployed in wars.

Free the Children – worlds largest group of YOUTH working to improve the education of children in 45 countries; mission to alleviate child labour, poverty and exploitation. Ten Thousand Villages – retail stores sell Fair Trade products Chapter 6: SOCIAL RESPONSIBILITY AND NGOs Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.

International Organization for Standardization (ISO)  Assures WORLDWIDE standards (over 175,000)  Areas of agriculture, construction, health care, engineering  Standard of quality management  Products are safe, reliable, productive, environmentally responsible  Interchangeable with other products (producers)  Increases exports  Increases safety and consumer protection CRITICAL FOR INTERNATIONAL TRADE

Homework  p. 178 #1,2,4,5,8,18,19,21,22,23