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Chapter Eight Ethical Issues in International Business

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Title: Chapter Eight Ethical Issues in International Business


1
Chapter EightEthical Issues in International
Business
  • Ethical Theory and Business, 6th Edition
  • Tom L. Beauchamp Norman E. Bowie

2
Objectives
  • 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.

3
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
    anti-sweatshop movement.
  • Discuss possible standards for appropriate wages
    and labor standards in international sweatshops.

4
Objectives
  • Discuss the potential economic problems that may
    occur if current sweatshop practices are changed.

5
Overview
  • Multinational Corporations
  • Bribery
  • Sweatshops

6
Multinational Corporations
7
Norman Bowie
  • Relativism and the Moral Obligations of
    Multinational Corporations
  • General multinational corporation obligations
  • Distinctive obligations
  • Relativism
  • Morality of the marketplace

8
Daryl Koehn
  • What Can Eastern Philosophy Teach Us About
    Business Ethics?
  • Cullen Chair of Business Ethics, University of
    St. Thomas in Houston
  • Do Asian values exist?
  • Watsuji Tetsuro and Confucius
  • Meaning of trust
  • Relations are for life
  • Ethics beyond rights

9
Iwao Taka
  • Business Ethics A Japanese View
  • 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

10
Iwao Taka
  • Living between the group and individual
    environments
  • 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

11
Iwao Taka
  • 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

12
Iwao Taka
  • 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

13
Patricia H. Werhane
  • Exporting Mental Models Global Capitalism in
    the Twenty-First Century
  • Ruffin Professor of Business Ethics, University
    of Virginia
  • 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.

14
Patricia H. Werhane
  • This article examines the possibilities of using
    an American free enterprise capitalist model for
    conducting business in a global arena.

15
Bribery
16
P. Steidlmeier
  • Gift Giving, Bribery, and Corruption Ethical
    Management of Business Relationships in China
  • Associate Professor School of Management,
    Binghamton University
  • Developing a cultural framework for reciprocity
  • Artifacts
  • Social knowledge
  • Cultural logic

17
P. Steidlmeier
  • Interacting with others in China
  • Moral analysis of reciprocity
  • 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 shouldnt get involved as red flags.

18
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.

19
P. Steidlmeier
  • Rather than becoming entangled in a specific
    minor bribe, place the whole matter in a broader
    context of negotiation.

20
Thomas Donaldson and Thomas W. Dunfee
  • When Ethics Travel The Promise and Peril of
    Global Business Ethics
  • ISCT Core norms
  • Hypernorms
  • Consistent norms
  • Moral free space
  • Illegitimate norms
  • Navigating the ISCT map

21
Sweatshops
22
Richard Applebaum and Peter Dreier
  • The Campus Anti-Sweatshop Movement
  • The global sweatshop
  • Sweatshop A process where profits are sweated
    out of workers by forcing them to work longer and
    faster.
  • Kathie Lee
  • Robert Reich

23
Richard Applebaum and Peter Dreier
  • 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
  • The industrys new clothes

24
Ian Maitland
  • The Great Non-Debate Over International
    Sweatshops
  • Carlson School of Management, University of
    Minnesota
  • International sweatshop labor standards
  • Home-country standard
  • Living wage standard
  • Classical liberal standard

25
Ian Maitland
  • Charges against sweatshops
  • Unconscionable wages
  • Immiserization thesis
  • Widening gap between rich and poor
  • Collusion with repressive regimes
  • Labor standards in international sweatshops
    painful tradeoffs
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