Transcript Ethical Issues in International Business

Ethical Theory and Business, 6th Edition
Tom L. Beauchamp & Norman E. Bowie
Chapter Eight
Ethical Issues in
International Business
© Prentice Hall, 2001
Objectives
٠ After studying this chapter the student should
be able to:
– Describe problems encountered by multinational
corporations when conducting business with other
countries.
– Contrast the transcendental normative environment
and the group normative environment.
– Analyze the ethical issues of the Japanese
business community.
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Objectives
– Discuss the concept of reciprocity as it applies to
the Chinese culture.
– Explain the guidelines for conducting business with
Chinese businesspeople.
– Contrast gift giving, bribery, and corruption.
– Define the term sweatshop.
– Discuss the development of the campus antisweatshop movement.
– Discuss possible standards for appropriate wages
and labor standards in international sweatshops.
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Objectives
– Discuss the potential economic problems that may
occur if current sweatshop practices are changed.
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Overview
٠ Multinational Corporations
٠ Bribery
٠ Sweatshops
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Norman Bowie
٠ “Relativism and the Moral Obligations of
Multinational Corporations”
٠ General multinational corporation obligations
٠ Distinctive obligations
٠ Relativism
٠ Morality of the marketplace
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Daryl Koehn
٠ “What Can Eastern Philosophy Teach Us
About Business Ethics?”
٠ Cullen Chair of Business Ethics, University of
St. Thomas in Houston
٠ Do Asian values exist?
٠ Watsuji Tetsuro and Confucius
– Meaning of trust
– Relations are for life
– Ethics beyond rights
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Iwao Taka
٠ “Business Ethics: A Japanese View”
٠ Religious dimension
– Transcendental normative environment
• Numen – Soul, spirit, or spiritual energy.
• Transcendentalism – The philosophy that every
phenomenon is an expression of the great life force and is
ultimately connected with the numen of the universe.
– Japanese meaning of work
– Group normative environment
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Iwao Taka
٠ Living between the group and individual
environments
٠ Social dimension
– Concentric circles of corporations
• Family, fellows, Japan, and world
– Dynamics of the concentric circles
• The individuals
• The contextuals
– Group environment and concentric circles
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Iwao Taka
٠ Japanese recognition of the American
business community
– Job description and the transcendental logic
– Employees’ interest and the group logic
– Claims against the Japanese market and the
concentric circles’ ethics
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Iwao Taka
٠ Ethical Issues of the Japanese business
community
– Discrimination and transcendental logic
• Transcendental logic has favored the male society.
• Transcendental logic has been used to accuse certain
workers of laziness.
– Employees’ dependency and the group logic
– Exclusiveness of the concentric circles
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Patricia H. Werhane
٠ “Exporting Mental Models: Global Capitalism in
the Twenty-First Century”
٠ Ruffin Professor of Business Ethics, University
of Virginia
٠ Mental models - The mechanisms whereby
humans are able to generate descriptions of
system purpose and form; explanations of
system functioning and observed system
states; and predictions of future system states.
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Patricia H. Werhane
٠ This article examines the possibilities of using
an American free enterprise capitalist model
for conducting business in a global arena.
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P. Steidlmeier
٠ “Gift Giving, Bribery, and Corruption: Ethical
Management of Business Relationships in
China”
٠ Associate Professor School of Management,
Binghamton University
٠ Developing a cultural framework for reciprocity
– Artifacts
– Social knowledge
– Cultural logic
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P. Steidlmeier
٠ Interacting with others in China
٠ Moral analysis of reciprocity
٠ Guidelines for doing business right in China
– Investigate the backgrounds of local executives
you place in charge of company matters.
– Ensure no one individual has total control over
company matters.
– Treat remarks such as “China is different” and “You
shouldn’t get involved” as red flags.
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P. Steidlmeier
– Establish regular and detailed auditing systems to
ensure transparency.
– Be aware of the political standing of your
counterparts and do not get caught in the cross fire
of Chinese power struggles.
– Explain your difficulties to the Chinese side and
offer alternatives that are legitimate.
– As much as possible, use Chinese sources
themselves as the basis for your unwillingness to
do corrupt deals.
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P. Steidlmeier
– Rather than becoming entangled in a specific minor
bribe, place the whole matter in a broader context
of negotiation.
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Thomas Donaldson and Thomas
W. Dunfee
٠ “When Ethics Travel: The Promise and Peril of
Global Business Ethics”
٠ ISCT Core norms
– Hypernorms
– Consistent norms
– Moral free space
– Illegitimate norms
٠ Navigating the ISCT map
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Richard Applebaum and Peter
Dreier
٠ “The Campus Anti-Sweatshop Movement”
٠ The global sweatshop
– Sweatshop – A process where profits are sweated
out of workers by forcing them to work longer and
faster.
٠ Kathie Lee
٠ Robert Reich
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Richard Applebaum and Peter
Dreier
٠ A “sweat-free” campus
– Began at Duke University, Fall 1997
– Required manufacturers of items with the Duke
label to sign a pledge that they would not use
sweatshop labor
– Quickly spread to other U.S. universities/colleges
– United Students Against Sweatshops (USAS)
formed Summer 1998
٠ The industry’s new clothes
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Ian Maitland
٠ “The Great Non-Debate Over International
Sweatshops”
٠ Carlson School of Management, University of
Minnesota
٠ International sweatshop labor standards
– Home-country standard
– Living wage standard
– Classical liberal standard
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Ian Maitland
٠ Charges against sweatshops
– Unconscionable wages
– Immiserization thesis
– Widening gap between rich and poor
– Collusion with repressive regimes
٠ Labor standards in international sweatshops:
painful tradeoffs
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