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4 – Ethics in International Business

BUSINESS ETHICS
accepted principles of right or wrong governing the conduct of business-people
ETHICAL STRATEGY
course of action that does not violate accepted business ethics
COMMON ETHICAL ISSUES
employment practices, human rights, environmental regulations, corruption, and the moral obligation of multinational corporations
APARTHEID
racial segregation; specifically : a former policy of segregation and political and economic discrimination against non-European groups in the Republic of South Africa
FOREIGN CORRUPT PRACTICES ACT IN THE UNITED STATES
passed in 1977
outlawed the paying of bribes to foreign government officials to gain business
later amended to allow “facilitating payments”
SEED MONEY/GREASE PAYMENTS/FACILITATING PAYMENTS
payments to ensure receiving the standard treatment that a business ought to receive from a foreign government, but might not due to the obstructions of a foreign official
NOT payments to secure contracts that would not otherwise be secured
NOT payments to obtain exclusive preferential treatment
CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN INTERNATIONAL BUSINESS TRANSACTIONS
enforced in 1999
obliges member states and other signatories to make the bribery of foreign public officials a criminal offense
excluded facilitating payments made to expedite routine government action
SOCIAL RESPONSIBILITY
refers to the idea that business-people should consider the social consequences of economic actions when making business decisions and that there should be a resumption in favor of decisions that have both good economic and social consequences
NOBLESSE OBLIGE
French term that refers to honorable and benevolent behavior considered a responsibility of people of high birth. In a business setting, it is taken to mean benevolent behavior that is the responsibility of successful enterprises.
ETHICAL DELIMMAS
situations in which none of the available alternatives seem ethically acceptable
ORGANIZATION CULTURE
the values and norms that are shared among employees of an organization
VALUES
abstract ideas about what a group believes to be good, right, and desirable
NORMS
social rules and guidelines that prescribe appropriate behavior in particular situations
VALUES AND NORMS
shape the culture of a business organization and that culture has an important influence on the ethics of business and decision making
STRAW MEN
approaches to business ethics are raised by business scholars primarily to demonstrate that they offer inappropriate guidelines for ethical decision making in a multinational enterprise
ex: Friedman Doctrine, cultural relativism, the righteous moralist, and the naive immoralist
FRIEDMAN DOCTRINE
the only social responsibility of business is to increase profits, so long as the company stays within the rules of law
CULTURAL RELATIVISM
the belief that ethics are nothing more than the reflection of culture — all ethics are culturally determines — and that accordingly, a firm should adopt the ethics of the culture in which it is operating
ex: when in Rome do as the Romans
RIGHTEOUS MORALIST
claims that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries
NAIVE IMMORALIST
asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.
UTILITARIAN APPROACH
holds that the moral worth of actions or practices is determined by their consequences
committed to the maximization of the good and the minimization of the bad
ex: cost-benefit analysis and risk assesment
KANTIAN ETHICS
holds that people should be treated as ends and never purely as means to the ends of others
ex: people are not instruments – they have dignity and need respect
RIGHTS THEORIES
recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures
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