Relativism and the Moral Obligations of Multinational Corporations
Bowie distinguishes between descriptive and normative ethical relativism and criticizes both sets of views.
He goes on to defend a basic morality necessary for market transactions.
3 Cultural Relativism
Cultural relativism is the descriptive claim that ethical practices differ among cultures.
Moral (ethical) relativism is the normative claim that what is really right or wrong is what a culture says is right or wrong.
4 Arguments against cultural relativism
Different practices do not necessarily imply different underlying moral principles.
There are universal principles accepted by all cultures such as prohibitions against torture and genocide.
There are international treaties and conventions that codify basic moral norms.
5 Arguments against moral (ethical) relativism
The mere fact that a culture believes a practice is correct does not make it correct.
It is inconsistent with the concept of a moral reformer someone who argues against the views of the majority based on ethical principles.
The strongest argument against ethical relativism would be to defend universal moral norms (see next essay by Arnold).
There is no clearly agreed upon understanding of cultural.
There seem to be basic moral norms that every society must adapt such as dont kill or steal.
6 Morality the Market
There is an implicit morality of the marketplace that is often ignored.
There are Kantian foundations for moral prohibitions against lying and cheating.
Multinationals are obligated to follow these minimum ethical norms.
7 Denis G. Arnold
The Human Rights Obligations of Multinational Corporations
Arnold defends a Kantian view of human rights obligations of corporations and defends that view against criticism.
He also criticizes one recent effort by the United Nations to identify the human rights obligations of corporations.
8 Human Rights
Human rights are different from legal rights in that they do not depend upon state sanction for their legitimacy.
9 The United Nations human rights
The Universal Declaration of Human Rights (1948) is aimed at states not corporations
Draft Norms on the Responsibilities of Corporations and Other Business Enterprises with Respect to Human Rights (2003)
is aimed at corporations.
They are too wide and imprecise
They fail to distinguish between basic obligations and those actions that are good to perform but not mandatory.
10 Basic Rights
Are attributable to persons
11 A Kantian basis for rights
Always treat others as an end and never as a means only.
Entails negative duties such as avoiding physical force or coercion
Entails positive obligations like ensuring positive well-being
Freedom Individuals should be free to as much freedom as is compatible with a like freedom for all.
Human capabilities necessary to function well life physical health freedom of thought and expression and the ability to pursue ones conception of the good.
The right to physical security and freedom of movement.
The right to non-discrimination on the basis of arbitrary characteristics such as race sex religion ethnicity and sexual orientation.
The right to freedom of association and collective bargaining.
The right to fair treatment.
The right to subsistence
The right to develop basic human capabilities.
12 Are Human Rights Western
Human rights are not merely a Western concept.
There are diverse Asian societies many like India embrace human rights language and arguments.
Even if all Asian nations denied the validity of human rights arguments this would not entail that they were correct.
13 Patricia H. Werhane
Exporting Mental Models Global Capitalism in the 21st Century
Werhane argues for caution in extending Western style capitalism abroad.
She provides several examples whereby the unreflective extension of Western style capitalism led to bad outcomes.
14 Not All Ideas can be Exported
The mental model of private property minimal regulations and free trade is being exported by the U.S. as if it will always be of benefit. But this is not so.
Example of Luzon rice farmers.
Example of Mexican farmers
Example of W.R. Graces development of Neemix
Example of Solar Electric Light Fund in China and South Africa
The lesson here is that American mental models of property and free enterprise cannot be uniformly and unreflectively exported without producing negative consequences.
15 How to Handle Poverty
Everyone can agree that abolishing poverty is a good thing but we need to be cautious regarding our assumptions about how to do so.
We need to keep in mind that what matters most to many people are social relationships family religious and community traditions and local values regarding social goods.
Economic development schemes that fail to recognize this will often fail.
It is in the best interest of corporations to tread lightly as developing countries represent 80 of the worlds population.
Unilever is an example of a company that has adapted its mental models to meet the diverse needs of communities throughout the developing world.
17 Ian Maitland
The Great Non-Debate Over International Sweatshops
Maitland defends the use of sweatshops arguing that on the whole they are better for the worlds poor than the available alternatives.
18 Sweatshop Problems
There has been widespread criticism of corporate labor practices especially in the apparel and footwear industry.
Students lead protests on U.S. college campuses
Anti-sweat campaigns led by NGOs against well known companies
Maitland argues that these critics dont understand or ignore basic economics.
IF they did they would see that sweatshops are good for third-world workers.
19 Markets should determine wages
Workers in the urban formal sector of developing nations earn better wages than do workers in the rural informal sector.
The imposition of wages or labor standards greater than that demanded by the market increases costs.
Increased costs result in layoffs and slow investment in the formal sector.
Formal sector layoffs result in a surplus supply of labor in the informal sector.
A surplus of informal sector workers depresses income in the informal sector.
Conclusion Higher wages or labor standards increase poverty and limit economic growth in developing nations.
20 Sweatshops are Good!
What are needed are more not fewer sweatshops.
Therefore MNEs should stop appeasing their critics and provide a serious defense of their global labor practices.
21 Denis G. Arnoldand Norman E. Bowie
Sweatshops and Respect for Persons
Arnold and Bowie criticize the use of sweatshops by corporations and argue that workers should be treated with basic respect.
They provide examples of corporations that do so and criticize Maitlands defense of sweatshops.
22 Kant on sweatshops
Kantian respect for persons requires that one always act so that you treat others as an end and never as a means only.
Entails both positive and negative freedom.
Both the United Nations and the World Bank holds that MNCs have an obligation to respect workers and treat them with dignity.
23 Respecting workers means
Adhering to local labor laws
MNE factories frequently permit violations of local labor laws.
Such violations of the law are permitted by local government authorities in order to prevent the MNE factory from shutting down and moving elsewhere.
The violation of host nation labor laws by MNEs should be condemned because it is hypocritical.
Respect for the autonomy of host nation governments especially those that are freely elected demands that MNEs not use economic coercion to undermine the rule of law.
Refraining from coercion
24 Respecting workers means
Providing decent working conditions
Sweatshop workers are frequently exposed to repetitive motion injuries exposure to toxic chemicals exposure to airborne pollutants such as fabric particles exposure to excessive noise pollution malfunctioning machinery and work-place fires.
The cost of improving these conditions varies significantly depending upon such factors as the problem being addressed and the size of the factory. Some of these problems can be addressed with little cost.
Maitland ignores safety issues.
25 Respecting workers means
An obligation to ensure that employees do not live under conditions of overall poverty
by providing adequate wages for a 48-hour work week to satisfy both basic food needs and basic non-food needs.
In economies where the minimum wage for a 48-hour work week allows workers to avoid overall poverty employers will have no obvious moral obligation to pay their lowest paid workers more than the minimum wage.
26 Problems with Maitlands position
He contradicts himself
He argues against improving market outcomes by paying above market wages because it will benefit more workers
He argues in favor of improving market outcomes by fighting consumer pressure to improve wages because it will benefit workers
He assumes that productivity is independent of wages but this assumption is dubious.
Critics are not calling for an increase in minimum wages but for voluntary increases in expenditures by MNCs.
Many companies such as Adidas Nike and Gap are working to eliminate abusive working conditions.
27 David Hess and Thomas Dunfee
Taking Responsibility for Bribery The Multinational Corporations Role in Combating Corruption
Hess and Dunfee describe the harm cause to local communities by corruption
Discuss international treaties banning bribery
And they highlight the efforts of Shell to abolish slavery.
Corruption inhibits economic development and undermines human rights
OECD Convention on Combating Bribery of Foreign Public Officials 1997 (1999)
Ratified by 34 countries
Makes it illegal to bribe abroad
Transparency International Reports that only 19 of executives knew about the convention
Just 27 reported reduced corruption after the convention
Foreign Corrupt Practices Act
U.S. law that went into effect in the U.S. in 1977
Currently U.S. corporations are the 9th most likely to bribe foreign officials (out of 21)
Adapted by the Caux Roundtable
30 Shells Anti-Corruption Policies
Studied best practices at 15 companies
Put in place a no bribes policy
Promulgates and educates within the organization
Terminates and prosecutes employees that pay bribes
31 Legal Perspectives
Supreme Court of Texas Dow Chemical Company and Shell Oil Company v. Domingo Castro Alfaro et al.
This case concerns the question of whether or not a Texas based corporation can be held accountable in Texas courts for harmful actions conducted abroad or whether this is inconvenient for such corporations and thus should not be allowed. The majority of the court found that corporations should be held accountable for overseas activities in Texas courts.
United States Court of Appeals for the Ninth CircuitDoe 1 vs. Unocal
This case concerns Unocals involvement with forced labor and human rights abuses in Myanmar (Burma). The court found that Unocal could be held liable for complicity with such practices in U.S. courts.
32 Legal Perspectives
United Nations Draft Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights (2003)
The United Nations Global Compact
This is a non-binding compact regarding ethical conduct in the global economy that corporations may endorse. The Global Compact is not a part of the Draft Norms on the Responsibilities of Transnational Corporations as its heading in the textbook implies. This will be corrected in future printings.
This is a non-binding draft document attempting to articulate the human rights obligations of businesses in the global economy.
This case describes possible sexual discrimination against a young women employee of a U.S. bank operating in Mexico. It is useful for discussions of relativism and human rights.
Facilitation or Bribery Cultural and Ethical Disparities
This case considers whether facilitation payments constitute bribery.
Chrysler and Gao Feng Corporate Responsibility for Religious and Political Freedom in China
An employee of a Chrysler joint venture in China who is also a devout Christian is arrested by the Chinese government for illegal religious practices. Chryslers partner in the joint venture pressures Chrysler to fire him. What should Chrysler do
Should Wal-Mart Do More A Case Study in Global Supply Chain Ethics
Wal-Mart inspects its factories for compliance with labor standards. A major news magazine reports that Wal-Marts Chinese supplier factories routinely submit false information to satisfy these reports. Factory managers report that Wal-Marts efforts to maintain costs and improve quality make it impossible for them to comply with labor standards.
adidas Application of Standards of Engagement to Child Labor Dilemma
Adidass proactive solution to child labor is described.
Tackling HIV/AIDS Unilever Tea Kenya
Unilevers proactive efforts to help reduce the HIV infection in Africa are discussed.
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