1. International business ethics
This project has been funded with support from the European Commission. The author is solely responsible for this publication (communication) and the Commission accepts no responsibility for any use that may be made of the information contained therein. Project number LT01-KA

2. International Business Ethics
In this module:
What are international business ethics?
The importance of ethics in international business
Ethical issues companies face in a foreign market
Tips to navigate the ethics of international business
Philosophical approaches to ethics
Case studies
Activity – Tony Chocolonely

3. What are international business ethics?
Business ethics are the accepted principles of right or wrong leading the behavior of business people.

4. The importance of ethics in international business
The agreement of what actions are ethical or unethical will be greater between two entirely different cultures with different values and cultural practices.

5. Ethical issues companies face in a foreign market
Most common ethical issues in international business involve
Employment practices
What pay levels and working conditions are acceptable. When internationalising your business you should consider your strategy of employment practices.
If work conditions in the country you are doing business in are clearly inferior to those in your own country, you can choose to apply:
1) Home country standards
2) Host country standards
3) Something in between

6. Ethical issues companies face in a foreign market
Human rights
Does your company presence in a foreign country support the current regime which may be considered abusive or does your company presence there serve as a promoter for human rights improvements?
Depending on the situation in that country you can choose to:
Withdraw from the market in that country
Actively work to improve local conditions

7. Ethical issues companies face in a foreign market
Environmental regulations
Not all foreign countries have environmental legislation that makes it illegal to pollute.
An ethical approach to your expansion into such a country is to limit your environmental trail beyond what is required by local laws.

8. Ethical issues companies face in a foreign market
Corruption
Beware that many EU Member States have anti-bribery laws that prohibit companies to pay bribes. Smaller gifts, of a size that would not normally influence a major decision, are considered ethical in some societies and may be legal under local and your own country’s laws.
Make sure your company has a detailed policy regarding payments and gifts.

9. Ethical issues companies face in a foreign market
The moral obligation of multinational companies
Corporate Social Responsibility = companies take responsibility for their impact on society. For example: giving something back to the societies that have made their success possible.

10. Tips to navigate the ethics of international business
Know the laws
Most EU countries have laws that prevent businesses and their representatives from bribing to get new business or keep the current one.
Follow international business guidelines
Allong with national law, businesses can follow international guidelines set up by Organisation for Economic Co-operation and Development (OECD).

11. Tips to navigate the ethics of international business
Communicate clearly and understand the differences
The businesses that succeed are the ones that embrace the culture of the country where they sell their product, while maintaining their unique company identity and values.
Respect differences
Without compromising the company's core values, it is possible to embrace certain cultural differences as long as those actions are not against the law in your own country.

12. Tips to navigate the ethics of international business
Develop a unified strategy
Establishing a unified corporate strategy can help to navigate the cultural difference when doing business with foreign countries. It should include a code of conduct that clearly details the company's fundamental guiding principles.

13. Philosophical approaches to ethics
What are our ethics based on?
The Utilitarian Approach
The ethical corporate action, is the one that produces the greatest good and does the least harm for all who are affected-customers, employees, shareholders, the community, and the environment.
The Rights Approach
The ethical action is the one that best protects and respects the moral rights of those affected.

14. Philosophical approaches to ethics
The Fairness or Justice Approach
All equals should be treated equally. If unequally, then it should be fairly based on some standard that is defensible.
The Common Good Approach
Life in community is good in itself and our actions should contribute to that life. This approach also focuses attention on the common conditions that are important to the welfare of everyone.

15. Philosophical approaches to ethics
The Virtue Approach
Ethical actions ought to be consistent with certain ideal virtues that provide for the full development of our humanity. Virtue ethics asks of any action, "What kind of person will I become if I do this?" or "Is this action consistent with my acting at my best?"