1. Demanding Ethical and Socially Responsible Behavior
Chapter 04
Demanding Ethical and Socially Responsible Behavior
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. LEARNING GOALS
Chapter Four
Explain why obeying the law is only the first step in behaving ethically.
Ask the three questions you need to answer when faced with a potentially unethical action.
Describe management’s role in setting ethical standards.
4-2

3. LEARNING GOALS
Chapter Four
Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Analyze the role of U.S. businesses in influencing ethical behavior and social responsibility in global markets.
4-3

4. BLAKE MYCOSKIE TOMS Shoes
Profile
While appearing on The Amazing Race, Mycoskie saw how badly local children in Argentina needed shoes.
He founded TOMS in
TOMS gives a pair of shoes to a child in need for every pair sold.
4-4

5. NAME that COMPANY
Chapter Four
This company has a program it calls Social Service Leave that allows employees to take up to a year off to work for a nonprofit organization while earning their full salary and benefits, including job security.
Name that company!
Company: Xerox
4-5

6. LIFE AFTER SCANDAL
Ethics is More Than Legality
LG1
Scandals have shaken the real estate, mortgage and banking industries.
How do we restore trust in the free market system?
Punish those who have broken the law.
Make accounting records more transparent.
Consider what is ethical, not just what is legal.
See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically.
4-6

7. COST of CORRUPTION (Legal Briefcase)
Madoff Investment Securities: Bernie Madoff is serving 150 years behind bars after running his exclusive wealth management firm as a gigantic Ponzi scheme.
Enron: Jeffery Skilling is serving a 24 year sentence for accounting fraud while Richard Causey, who pled guilty, will be released in October Former CEO, Kenneth Lay, died before sentencing.
WorldCom: Former CEO, Bernie Ebbers, was convicted of fraud, conspiracy and false filings and sentenced to 25 years.
See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically.
4-7

8. WHAT is a PONZI SCHEME?
A fraud by paying returns to existing investors from funds contributed by new investors.
New investors are promised opportunities claimed to generate high returns with little or no risk.
Fraudsters focus on attracting new money to make promised payments.
See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically.
Source: Securities and Exchange Commission, accessed June 2011.
4-8

9. WHAT are ETHICS?
Ethical Standards are Fundamental
LG1
Ethics -- The standards of moral behavior. Behaviors that are accepted by society as right versus wrong.
See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically.
The reputations of American businesses have been under assault due to numerous scandals over the past twenty years. Following the law is only the first step in being ethical. Ethics are standards of moral behavior and are accepted by society as right versus wrong.
4-9

10. BASIC MORAL VALUES Right: Wrong: Integrity Cheating Cowardice
Ethical Standards are Fundamental
LG1
Right:
Integrity
Respect for human life
Self-control
Honesty
Courage
Self-sacrifice
Wrong:
Cheating
Cowardice
Cruelty
See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically.
4-10

11. ETHICS and YOU
Ethics Begins with Each of Us
LG2
Plagiarizing from Internet materials is the most common form of cheating in schools today.
Studies found a strong relationship between academic dishonesty and dishonesty at work.
See Learning Goal 1: Explain why obeying the law is only the first step in behaving ethically.
4-11

12. FACEBOOK or FAKEBOOK? (Making Ethical Decisions)
Facebook scams are becoming more prevalent.
Some scammers pose as military servicemen and establish relationships with women, then request money for phone calls or trips home.
Surveys can generate money for scammers, but then some also teach others how to scam other users.
Do you think it’s ethical to create a fake account? Why? Why not?
See Learning Goal 2: Ask the three questions to answer when faced with a potentially unethical action.
4-12

13. FACING ETHICAL DILEMMAS
Ethics Begins with Each of Us
LG2
Ask yourself these questions:
Is it legal?
Is it balanced?
How will it make me feel about myself?
See Learning Goal 2: Ask the three questions to answer when faced with a potentially unethical action.
When facing an ethical dilemma it is important that you ask these three basic questions: Is it legal? Is it balanced? How will it make me feel about myself? Asking and answering these three questions will prevent many people from making unethical decisions.
4-13

14. BRIBERY BAD BOYS Five Open FCPA Investigations
Ethics Begins with Each of Us
LG2
Company
Case and Amount Reserved for Possible Settlements
ABB
Potential bribery on three continents.
$300 million
Weatherford
Possible bribery issues in Europe and Africa.
$106 million
ENI
Allegedly bribed Nigerian officials.
Technip
Alcatel-Lucent
Bribed officials in Costa Rica, Kenya and Taiwan.
$137 million settlement expected
See Learning Goal 2: Ask the three questions to answer when faced with a potentially unethical action.
Bribery Bad Boys
The Justice Department has 150 open Foreign Corrupt Practices Act (FCPA) cases.
This slide highlights five of the current cases and the amount that these companies have reserved to cover any settlements.
To promote discussion, you can discuss how these companies are first extorted by the officials in foreign nations and then punished for their actions back at home. It is illegal for U.S. companies to participate in bribery, yet it is common practice in some countries. How are Americans supposed to deal with these issues? What is the ethical dilemma here?
Source: Forbes, May 24, 2010.
4-14

15. PROGRESS ASSESSMENT What are ethics?
How do ethics differ from legality?
When faced with ethical dilemmas, what questions can you ask yourself that might help you make ethical decisions?
1) Ethics are society’s accepted standards of behavior, in other words behaviors accepted by society as right rather than wrong.
2) Ethics reflect people’s proper relationships with one another. Legality is narrower in that it refers to laws we have written to protect ourselves from fraud, theft, and violence.
3) It helps to ask the following questions when faced with an ethical dilemma: Is the proposed action legal? Is it balanced? Would I want to be treated this way? How will it make me feel about myself?
4-15

16. ETHICS START at the TOP Organizational ethics begin at the top.
Managing Businesses Ethically and Responsibly
LG3
Organizational ethics begin at the top.
Managers can help instill corporate values in employees.
Trust between workers and managers must be based on fairness, honesty, openness and moral integrity.
See Learning Goal 3: Describe management’s role in setting ethical standards.
Leadership helps to instill corporate values in employees. So, like many aspects of business, ethical behavior practiced and modeled by managers and executives will often trickle down to the employees at large.
4-16

17. FACTORS INFLUENCING MANAGERIAL ETHICS
Managing Businesses Ethically and Responsibly
FACTORS INFLUENCING MANAGERIAL ETHICS
LG3
Individual
Organizational
Environmental
Values
Work Background
Family Status
Personality
Top Level Management Philosophy
Firm’s Reward System
Job Dimensions
Competition
Economic Conditions
Social/Cultural Institutions
See Learning Goal 3: Describe management’s role in setting ethical standards.
Factors Influencing Managerial Ethics
Before you put this slide up, you may want to ask the students: What factors influence managerial ethics?
Ethics begins with the individual, but are influenced by the organization and the environment in which the business operates.
To bring the discussion to the present, you may ask: How can the firm’s reward system impact ethical behavior? How did these reward systems at large banks and other financial institutions exacerbate the financial crisis in this country? (Students should be able to discuss this point. Excessive risk taking imperiled all of the stakeholders of various financial institutions as well as the world economy.)
4-17

18. Setting Corporate Ethical Standards
ETHICS CODES
LG4
An increasing number of companies have adopted written codes of ethics.
Compliance-Based Ethics Code -- Emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers.
Integrity-Based Ethics Code -- Define the organization’s guiding values, create an environment that supports ethically sound behavior and stress a shared accountability.
See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
4-18

19. HOW to IMPROVE AMERICA’S BUSINESS ETHICS
Setting Corporate Ethical Standards
HOW to IMPROVE AMERICA’S BUSINESS ETHICS
LG4
Top management must adopt and unconditionally support an explicit corporate code of conduct.
Employees must understand that senior management expects all employees to act ethically.
Managers and others must be trained to consider the ethical implications of all business decisions.
See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
4-19

20. HOW to IMPROVE AMERICA’S BUSINESS ETHICS
Setting Corporate Ethical Standards
HOW to IMPROVE AMERICA’S BUSINESS ETHICS
LG4
An ethics office must be set up with which employees can communicate anonymously. Whistleblowers -- Insiders who report illegal or unethical behavior.
Involve outsiders such as suppliers, subcontractors, distributors and customers.
The ethics code must be enforced.
See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
4-20

21. HOW to PREVENT UNETHICAL BEHAVIORS
Setting Corporate Ethical Standards
HOW to PREVENT UNETHICAL BEHAVIORS
LG4
Managers must communicate the organization’s vision on ethical behavior.
Organizations must have a code of ethics.
Policies have to be enforced regarding ethical offences.
Ethical responsibility must be taught to all employees.
See Learning Goal 4: Distinguish between compliance-based and integrity-based ethics codes, and list the six steps in setting up a corporate ethics code.
Ways to Prevent Unethical Behavior
Before you put this slide up, you may want to ask the students: What is management’s role in preventing unethical behaviors? What can be done to deter unethical behaviors on the part of employees?
Increasing the penalty and educating employees are among the top methods for deterring unethical behaviors.
Thirty percent of the respondents in a poll suggested adding new laws to deter unethical behaviors. Ask the students: If ethics is more than legality, would new laws help? (Students should be able to argue this point. Although ethics is more than legality, if something is against the law, people may refrain from such behavior. However, it should be pointed out that ethics should be the way of life, i.e., it needs to be ingrained in the employees through culture and role modeling by managers and executives.)
Source: James Gehrke, Magnify Leadership & Development, November 2008.
4-21

22. HOW to PREVENT UNETHICAL BEHAVIORS
Setting Corporate Ethical Standards
HOW to PREVENT UNETHICAL BEHAVIORS
LG4
Discussions of ethics must be included in the decision-making process.
Accountability must be taken seriously at all levels in the organization.
Organizations must act fast when a crisis occurs.
Employees must know they have to defend and maintain the company’s reputation.
Source: James Gehrke, Magnify Leadership & Development, November 2008.
4-22

23. PROGRESS ASSESSMENT
Progress Assessment
What are compliance-based and integrity-based ethics codes?
What are the six steps to follow in establishing an effective ethics program in a business?
1) Compliance-based ethics codes emphasize preventing unlawful behavior by increasing control and penalizing wrongdoers. Integrity-based ethics codes define the organization’s guiding values, create an environment that supports ethically sound behavior, and stress shared accountability.
2) The six steps many believe will improve U.S. business ethics are: (1) Top management must adopt and unconditionally support an explicit corporate code of conduct; (2) Employees must understand that expectations for ethical behavior begin at the top and that senior management expects all employees to act accordingly; (3) Managers and others must be trained to consider the ethical implications of all business decisions; (4) An ethics office must be set up with which employees can communicate anonymously; (5) Outsiders such as suppliers, subcontractors, distributors, and customers must be told about the ethics program; (6) The ethics code must be enforced with timely action if any rules are broken.
4-23

24. CORPORATE SOCIAL RESPONSIBILITY
LG5
Corporate Social Responsibility (CSR) -- The concern businesses have for the welfare of society.
CSR is based on a commitment to integrity, fairness, and respect.
CSR proponents argue that businesses owe their existence to the societies they serve and cannot exist in societies that fail.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
CSR is based on a commitment to such basic principles as integrity, fairness and respect. Many for-profit companies have philanthropic endeavors as a part of their mission. Communities often depend on companies to help with social programs that make the lives of people in the community better. It stands to reason that businesses that strengthen their communities, as proponents of CSR argue, will grow stronger as their communities improve.
4-24

25. CORPORATE PHILANTHROPY and SOCIAL INITIATIVES
Social Responsibility
CORPORATE PHILANTHROPY and SOCIAL INITIATIVES
LG5
Corporate Philanthropy -- Includes charitable donations.
Corporate Social Initiatives -- Include enhanced forms of corporate philanthropy.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-25

26. CORPORATE RESPONSIBILITY and POLICY
Social Responsibility
CORPORATE RESPONSIBILITY and POLICY
LG5
Corporate Responsibility -- Includes everything from hiring minority workers to making safe products, minimizing pollution, using energy wisely, and providing a safe work environment.
Corporate Policy -- The position a firm takes on social and political issues.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-26

27. POSTIVE IMPACTS of COMPANIES
Corporate
Social Responsibility
POSTIVE IMPACTS of COMPANIES
LG5
Xerox offers a Social Service Leave program.
The recent recession caused 60% of companies to cut their philanthropic donations. However, now they’re more likely to give time and goods.
Two-thirds of MBA students surveyed reported they would take a lower salary to work for a socially responsible company.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
An ultimate example of a company helping the community is Xerox’s program, Social Service Leave, which allows employees to leave for up to a year and work for a nonprofit while still earning full salary, including benefits and job security.
4-27

28. HELPING HANDS Most Generous Celebrities
Corporate
Social Responsibility
HELPING HANDS Most Generous Celebrities
LG5
Who?
For?
George Clooney
United Way;
UN Messenger of Peace
Angelina Jolie & Brad Pitt
Make it Right Foundation; UN
Ben Affleck UN
Madonna
Raising Malawi
Michael J. Fox
Michael J. Fox Foundation for Parkinson’s Research
Alicia Keys
Keep a Child Alive;
Frum Tha Ground Up
Sir Elton John
Elton John AIDS Foundation
Matt Damon
GreenDimes; H2O Africa;
Running the Sahara
Oprah Winfrey
Angel Network
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Most Generous Celebrities
Students will find it interesting to see what some of their favorite celebrities have donated.
Oprah Winfrey earns well over $200 million per year and donates nearly $50 million.
The talk-show host and entertainment mogul is the founder of the Angel Network, a charity that raises money for poverty-stricken children and she has raised money to open schools for girls in South Africa.
Source: Parade Magazine, July 8, 2010.
4-28

29. GENEROUS GUYS World’s Biggest Givers
Corporate
Social Responsibility
GENEROUS GUYS World’s Biggest Givers
LG5
Who?
How Much?
What For?
Bill Gates
$28B
Malaria, public health, education
Warren Buffett
$8.3B
Gates Foundation
George Soros
$8B
Human rights, democracy
Gordon Moore
$6.8B
Environment
Carlos Slim
$4B
Education, healthcare
Eli Broad
$2.6B
Education, arts
Azim Premji
$2.1B
Education
James Stowers
$2B
Genetic research
Michael Bloomberg
$1.8B
Antismoking, transportation
Li Ka-Shing
$1.6B
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
World’s Biggest Givers
Students may be surprised how much billionaires donate and the causes they support. You could prompt discussion by asking students why they believe billionaires give so much to education while celebrities choose more social causes.
Bill Gates’ net worth is over $56B and he’s donated $28 billion!
Source: Forbes, June 6, 2011.
4-29

30. LIFE AFTER TRAGEDY Japan’s Post-Tsunami Big Givers
Corporate
Social Responsibility
LIFE AFTER TRAGEDY Japan’s Post-Tsunami Big Givers
LG5
Who?
What?
Masayoshi Son
Sent 12,000 cell phones to the area, created an iPhone app for donations
Saji Family
Gave $3.7 million and shipped 360,000 bottles of water
Akio Toyoda
Toyota gave $3.7 million after 11 car plants closed temporarily
Tadashi Yanai
Gave $12 million
Kenji Kasahari
Raised $2 million on Mixi, aided in finding missing persons
Yoshikazu Tanaka
Sold volunteer avatars online and the proceeds went to disaster relief
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Life After Tragedy
Japan was left devastated after an earthquake and tsunami destroyed cities and ports.
Japanese tycoons and their companies quickly did their part in aiding those affected by the disaster.
Some of their companies were even shut down. Tadashi Yanai’s stock dip cut his worth from $6.3 billion to $1.3 billion.
Source: Forbes, April 11, 2011.
4-30

31. PRESIDENT KENNEDY’S BASIC RIGHTS of CONSUMERS
Responsibility
to Customers
LG5
The Right to Safety
The Right to be Informed
The Right to Choose
The Right to be Heard
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-31

32. HOW DO CUSTOMERS KNOW?
Responsibility
to Customers
LG5
Over 70% of executives say their primary use of social media is to communicate CSR efforts.
Social media allows companies to reach a broad, diverse group and connect directly to them.
Now more than ever, it’s important for companies to live up to their expectations.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-32

33. SOCIAL CUSTOMER CONTACT Do’s and Don’ts of Using Twitter for Business
Responsibility
to Customers
LG5 Do
Don’t
Engage followers in discussion relevant to your industry.
Start political rants.
Think about your message before tweeting. Deleted tweets can still be found!
Tweet impulsively.
Frequently offer new content.
Let your account lie dormant.
Create separate accounts for business and personal use.
Make personal announcements via your company’s Twitter account.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Source: Entrepreneur, September 2010.
4-33

34. INSIDER TRADING
Responsibility
to Investors
LG5
Insider Trading -- Insiders using private company information to further their own fortunes or those of their family and friends.
Unethical behavior does financial damage to a company and investors are cheated.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-34

35. RESPONSIBILITY to EMPLOYEES
LG5
Create jobs and provide a chance for upward mobility.
Treat employees with respect.
Offer salaries and benefits that help employees reach their personal goals.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-35

36. AMERICA’S MOST ADMIRED COMPANIES
Responsibility
to Employees
LG5
Apple
Google
Berkshire Hathaway
Southwest Airlines
Procter & Gamble
Coca-Cola
Amazon
FedEx
Microsoft
McDonald’s
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
America’s Most Admired Companies 1. Before you put this slide up, you may want to ask the students: Are the ideals of maximization of profit and social responsibility in conflict?
Corporate social responsibility is the concern businesses have for the welfare of society, not just for their owners.
3. The vast majority of the companies listed in this slide are not only admired, but also financially successful.
Source: Fortune, March 21, 2011.
4-36

37. WHEN EMPLOYEES are UPSET…
Responsibility
to Employees
LG5
Employee fraud costs U.S. businesses about 5% of annual revenue and causes 30% of all business failures.
Disgruntled workers relieve frustration by:
Blaming mistakes on others.
Manipulating budgets and expenses.
Making commitments they intend to ignore.
Hoarding resources.
Doing the minimum.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-37

38. SOCIETY and the ENVIRONMENT
Responsibility
to Society and
the Environment
SOCIETY and the ENVIRONMENT
LG5
Over one-third of working Americans receive their salaries from nonprofits – who are dependent on funding from others.
The green movement emerged as concern about global warming increased.
Many companies are trying to minimize their carbon footprints – the amount of carbon released during an item’s production, distribution, consumption and disposal.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-38

39. RESPONSIBILITY to the ENVIRONMENT
to Society and
the Environment
RESPONSIBILITY to the ENVIRONMENT
LG5
Environmental efforts may increase costs, but can offer good opportunities.
The emerging renewable-energy and energy- efficiency industries account for 9 million U.S. jobs.
By 2030, as many as 40 million “Green” jobs will be created.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-39

40. SUSTAINABLE or SUSPECT: GREENWASHING (Thinking Green)
With public concern over the environment, companies are finding greener ways of doing business.
Some companies are claiming they are more environmentally responsible than they actually are, a practice called “greenwashing.”
Websites such as Greener Choices and Greenwashing Index screen ads for greenwashing.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-40

41. WORTHY CAUSES What $1,000 and $10,000 Can Buy
Responsibility
to Society and
the Environment
WORTHY CAUSES What $1,000 and $10,000 Can Buy
LG5
$1,000
5 acres of Louisiana wetlands for
The Conservation Fund
13 work uniforms for homeless people through Coalition for the Homeless
8,000 Vitamin A capsules for children overseas from Vitamin Angels
$10,000
4 community fishing ponds in the Congo through
Action Against Hunger
20 Dopplers to monitor pregnancies in Latin America for Global Links
2,155 mosquito nets for malaria protection through International Rescue Com.
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Worthy Causes
Sometimes it’s difficult to imagine just how far our donation money can go. This slide can give students insight into what some American families are able to give.
It’s not uncommon to think that donations under $1,000 will not go far. But when students see how much good $1,000 can do, they see smaller donations are still worth it.
To promote discussion, navigate through the websites linked to the slide and check out what smaller and bigger donations provide for these groups.
Source: Money, November 2010.
4-41

42. SOCIAL AUDITING
Social Auditing
LG5
Social Audit -- A systematic evaluation of an organization’s progress toward implementing socially responsible and responsive programs.
Five Types of Social Audit Watchdogs
Socially conscious investors
Socially conscious research organizations
Environmentalists
Union officials
Customers
See Learning Goal 5: Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
4-42

43. PROGRESS ASSESSMENT
Progress Assessment
What’s corporate social responsibility, and how does it relate to each of a business’s major stakeholders?
What’s a social audit, and what kinds of activities does it monitor?
1) Corporate social responsibility (CSR) is the concern businesses have for the welfare of society, not just for their owners. CSR defenders believe that businesses owe their existence to the societies they serve and cannot succeed in societies that fail. CSR must be responsible to all stakeholders, not just investors in the company.
2) A social audit is a systematic evaluation of an organization’s progress toward implementing socially responsible and responsive programs. Many feel a social audit should measure workplace issues, the environment, product safety, community relations, military weapons contracting, international operations and human rights, and respect for the rights of local people.
4-43

44. INTERNATIONAL ETHICS
International Ethics and
Social Responsibility
LG6
Many businesses want socially responsible behavior from their international suppliers.
In the 1970s, the Foreign Corrupt Practices Act criminalized the act of paying foreign businesses or government leaders in order to get business.
Partners in the Organization of American States signed the Inter-American Convention Against Corruption.
See Learning Goal 6: Analyze the role of U.S. businesses in influencing ethical behavior and social responsibility in global markets.
4-44

45. ETHICAL CULTURE CLASH (Reaching Beyond Our Borders)
Almost half of Motorola’s employees live outside the U.S.
A Motorola employee returns to his home country to work and the company reimburses living expenses so he can live in a safe area. The employee is trying to do the honorable thing for his family and the company is trying to keep the employee safe.
If the employee uses the money to help his family instead, is it right for the company to stop payment?
See Learning Goal 6: Analyze the role of U.S. businesses in influencing ethical behavior and social responsibility in global markets.
4-45

46. PROGRESS ASSESSMENT
Progress Assessment
How are U.S. businesses demanding socially responsible behavior from their international suppliers?
Why is it unlikely that there will be a single set of international rules governing multinational companies soon?
1) Many U.S. businesses now demand that international suppliers do not violate U.S. human rights and environmental standards.
2) It’s unlikely there will be a single set of international rules governing multinational companies because of the widespread disparity among global nations as to what constitutes ethical behavior. For example, a gift in one culture can be a bribe in another. In some nations child labor is expected and an important part of a family’s standard of living. The fairness of adhering to U.S. standards of ethical behavior is not as easy as you may think.
4-46