卡伦国际企业管理第6版 课件 CH04 Managing Ethical and Social Responsibility Challenges in Multinational Companies

4ManagingEthicalandSocialResponsibilityChallengesinMultinationalCompaniesLearningObjectives(1of2)Knowthedefinitionsofinternationalbusinessethicsandsocialresponsibility.Understandsomebasicprinciplesofethicalphilosophyrelevanttobusinessethics.Understandhowsocialinstitutionsandnationalcultureaffectethicaldecisionmakingandmanagement.Understandtheimplicationsofusingethicalrelativismandethicaluniversalisminethicsmanagement.LearningObjectives(2of2)IdentifythebasicprinciplesandconsequencesoftheU.S.ForeignCorruptPracticesAct.Understandhowinternationalagreementsaffectinternationalbusinessethics.Understandthedifferencesamongeconomic,legal,andethicalanalysesofbusinessproblemsDevelopskillsininternationaldecisionmakingwithethicalconsequences.EthicalChallengesFacingMNCsWorldwideEveryMultinationalcompanyfacesethicalchallengeswhenoperatinginaforeigncountry:Shouldwedumpourwasteintheriverknowingthedamageitwilldo,evenifsuchconductisnotillegal?Shouldwerefusetobribeagovernmentofficial,andlosethecontracttoourcompetitor?Shouldweusecheapchildlabor,evenifitsnotillegal,justbecauseourcompetitorsdo?Exhibit4.1:

ListoftheWorld’sMostEthicalCompaniesWhatisBusinessEthics?BusinessEthics:Apartofthebroaderconcernforethicalbehavior,whichaffectspeopleandtheirwelfareEthicsdealwiththe“shoulds”oflife–therulesandvaluesthatdetermineactionspeopleshouldfollowwhendealingwithotherhumanbeings.Althougheconomiclogicdominatesbusinessdecisionmaking,eachbusinessdecisionalsohasconsequencesforpeople,whetherintendedornot.Butethicalquestionsseldomhaveclearorunambiguousanswers.Whatis

InternationalBusinessEthics?InternationalBusinessEthics:uniqueethicalproblemsfacedbymanagersoperatingacrossnationalboundaries.Internationalbusinessethicsdiffersfromdomesticbusinessethicsintwoways:Internationalbusinessismorecomplex,asdifferentculturesdonotagreeonwhatone“should”do.MNCsoftenhavepowerandassetsthatareequaltoforeigngovernments,raisingmoreethicalconcernsovertheuseofsuchpower.Whatis

CorporateSocialResponsibility?CorporateSocialResponsibility(CSR):theideathatbusinesseshavearesponsibilitytosocietybeyondmakingprofitsCSRiscloselyrelatedtobusinessethics.CSRisconcernedwithethicalconsequencesofcompanypoliciesandprocedures.PracticingCSR,abusinessmusttakeintoaccountthewelfareofotherconstituentsinadditiontostockholders.PrimaryandSecondaryStakeholdersPrimaryStakeholders:thosewhoaredirectlylinkedtoacompany’ssurvival;(i.e.,customers,suppliers,employees,andshareholders)SecondaryStakeholders:thosewhoarelessdirectlylinkedtothecompany’ssurvival,buthaveimpact;theseincludethemedia,tradeassociations,andspecial-interestgroupsAddressingtheneedsofbothgroupsiscritical.SeeShellOilinNigeria,Monsanto’sbiotechnologyproductsExhibit4.2:

Ethical&SocialResponsibilityConcernsfortheMNCEthicalPhilosophy(1of2)Twoapproachestoethicaldecisionmaking:TraditionalViewsTeleologicalethicaltheoriesMoralityofanactbasedonconsequencesUtilitarianism:greatestgoodforgreatestnumberDeontologicalethicaltheoriesActionsaregoodorbadinandofthemselvesContemporaryphilosophyMoralLanguagesEthicalPhilosophy(2of2)MoralLanguagesdescribethebasicwaysthatpeoplethinkaboutethicaldecisionsandexplaintheirethicalchoicesSixbasicethicallanguages:VirtueandviceSelf-controlMaximizinghumanwelfareAvoidingharmRightsanddutiesSocialcontractNationalDifferencesinBusinessEthicsandSocialResponsibilityNationalcultureandsocialinstitutionsaffecthowbusinessesmanageethicalbehaviorandsocialresponsibility.Culturalnorms&valuesinfluenceconformitytolaws,andbribery,amongothers.Socialinstitutionssuchasreligionandthelegalsystemarekeyinstitutionsthataffectwhatethicalissuesareimportanttoasocietyandhowtheyaremanaged.Althoughtherearedifferencesbetweensocieties,someactionsareuniversallycondemned(i.e.,harmingchildren).Exhibit4.3:

AModelofInstitutional&CulturalEffectsonBusinessEthicsIssues&ManagementWhyCulturalDifferences?InstitutionalAnomieTheoryandotherresearch:Somenationalcultureandsocialinstitutionsarelikelytoencouragebreakingnorms,justifyingethicallysuspectbehaviors.Nationalculturesthatvaluehighachievement,highindividualism,highuniversalism,highmaterialismareallrelatedtohigherdeviancefromnorms.Socialinstitutionssuchashighindustrialization,capitalistsystems,lowerfamilybreakdown,andhighlyaccessibleeducationalsystemsallencouragedeviancefromnorms.Exhibit4.4:

CulturalVariationsinAcceptanceofEthicallySuspectBehaviorsQuestionablePayments

andBriberyQuestionablePaymentsare:BribesorgiftstoexpeditegovernmentactionsortogainadvantageinbusinessdealsInmanycountries,suchpaymentsareexpected,andpeopleroutinelyoffergiftsorbribesLiketheU.S.,mostcountrieshavealawforbiddingcorruptpractices,butenforcementvarieswidely.Implications:

QuestionablePayments,BribesCorruptionandbriberycanhavedevastatingeffectsonsocieties.Companiesroutinelyusepoorer-qualityproductsormaterialstomakeupforthebribe,thusresultingininferiorproductswithpoorquality.Corruptioncanalsoresultincollusionamongfirms,resultinginevenhigherprices.CorruptionPerceptionIndexTounderstandthelevelofcorruptionincountries,multinationalcompaniescanrelyontheCorruptionPerceptionIndex(CPI).CPI,developedbyTransparencyInternational,givesanideaoftheperceivedlevelsofcorruptionwithincountries.Exhibit4.5:

TheCPIforSelectedCountriesU.S.ForeignCorruptPracticesAct(FCPA)(1of3)TheForeignCorruptPracticesAct(FCPA)istheU.S.Lawforbiddingcorruptpractices.TheFCPAforbidsUScompaniesfromillegalpaymentsorgiftstoofficialsofforeigngovernmentsforthesakeofgettingorretainingbusiness.Afirmmayavoidliabilityifithasno“reasontoknow”thatitsagenthaspaidabribe.U.S.ForeignCorruptPracticesAct(FCPA)(2of3)Trickycomponentisthe“reason-to-know”component:Firmsareliableforbribesifbribesaremadebyagentsofthecompany.Firmsoftenuselocalagents,astheyhave“localknowhow”inconductingbusiness.Firmsareliableifitscommonknowledgethatagentsbribeofficialstocommitillegalacts.Ifnoknowledgeorreasontoexpectillegalagentbehavior,thenfirmisnotheldliable.U.S.ForeignCorruptPracticesAct(FCPA)(3of3)TheFCPAdoesnotprohibitsomeformsofpaymentsthatmayoccurininternationalbusiness:PaymentsmadeunderduresstoavoidinjuryorviolenceSmallpaymentstoencourageofficialstodolegitimateandroutinejobsPaymentswhicharelawfulinacountry“Grease”paymentswhichdonotseekillegalends,butareusedtospeedupnormalbusinessExhibit4.6:

Excerpts,

ForeignCorruptPracticesAct(1of2)Exhibit4.6:

Excerpts,

ForeignCorruptPracticesAct(2of2)Exhibit4.7:

FCPA:NumberofConvictionsExhibit4.8:

FCPA:Civil&CriminalFinesTowardTransnationalEthicsGlobalizationdramaticallyincreasescontactamongpeoplefromdifferentethicalandculturalsystems.Thiscontactcreatespressureforethicalconvergence,andthedevelopmentoftransnationalagreementsamongnationstogovernbusinesspractices.Despitedifferencesincultures,therearegrowingpressurestofollowthesamerulesinmanagingethicalbehaviorandsocialresponsibility.FourBasicReasonsforEthicalConvergenceThegrowthofinternationaltradeandtradingblocksInteractionbetweentradingpartnerswhichincreasespressurestoimitatebusinesspracticesEmployeesofvariedculturalbackgroundwhorequirecommonstandardsforconductAnincreasingnumberofbusinesswatchdogsPrescriptiveEthicsPrescriptiveEthics:SuggestedguidelinesfortheethicalbehaviorofMNCsThreemorallanguagesshouldguideMNCs:AvoidingharmRightsanddutiesSocialcontractThesethreearetheeasiesttospecifyinwrittencodesArealsomostappropriateinheterogeneousculturesSourcesofInternationalEthicsGuidelines(1of2)TheUnitedNationsUniversalDeclarationofHumanRightsTheUnitedNationsCodeofConductonTransnationalCorporationsTheEuropeanConventiononHumanRightsTheInternationalChamberofCommerceGuidelinesforInternationalInvestmentSourcesofInternationalEthicsGuidelines(2of2)TheOrganizationforEconomicCooperationandDevelopmentGuidelinesforMultinationalEnterprisesTheHelsinkiFinalActTheInternationalLaborOfficeTripartiteDeclarationsofPrinciplesConcerningMultinationalEnterprisesandSocialPolicyThesemaybesourcesfortheCodeofConductfortheMultinationalCompany.CodeofConduct

fortheMultinationalTwobasicrationales:Basicdeontologicalprinciplesdealingwithhumanrights(suchastherighttowork,righttobesafe)Historyofexperiencesininternationalbusinessinteractions(MNCsoftenignoretheenvironment)However,despiteagreements,MNCsmaynotalwaysfollowethicalprinciples.EvenifsuchCodesarenotenforceable,theyprovideasafeguidetoethicalconductformanagement.Exhibit4.9:

ACodeofConductfortheMultinationalCompanyTheEthicalDilemmainMultinationalManagement:

HowWillYouDecide?Ethicalrelativismvs.EthicaluniversalismEthicalrelativism:Eachsociety’sviewofethicsmustbeconsideredlegitimateandethical.(WheninRome…)Ethicaluniversalism:BasicmoralprinciplestranscendculturalandnationalboundariesDifficultyinfollowingeitherstandardEthicalrelativismcanbecomeconvenientrelativism.ConvenientRelativism;

ExtremeMoralUniversalismConvenientRelativismoccurswhencompaniesusethelogicofethicalrelativismtobehaveanywaytheyplease,usingdifferencesinculturesasanexcuse.Similarly,extrememoraluniversalismcanleadtoproblemsofculturalimperialisminwhichmanagersassumetheyknowthecorrectandethicalwaysofbehaving,viewingothervaluesasinferior.IndividualEthicalDecisionMakingf