Repetition Statements

Multinationals has power to control their resources and to move production from country to country. Nevertheless, this power is constrained not only by laws and regulations, but also by the discipline of the market and the competitive process.

Some moral philosophers argued that multinationals should give back something to

the society where they derived profits. This is refers to social responsibility

The concept of 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 presumption in favour of decisions that have

both good economic and social consequences. Advocates of this approach argued that business, particularly big successful businesses, such as Shell, Mobil, Total, etc need to recognizes their noble obligations and should give something back to

the societies that made them in their business activities

On the contrary, there are examples of multinationals in Niger Delta of Nigeria, such Shell, Mobil, etc that have abused their power by neglecting social

responsibilities. Most often, the areas of operations by these companies have been

polluted. But, companies such as MTN, GLO, Airtel, etc in Nigeria have

acknowledged a moral obligation to use their powers to enhance social welfare in the communities where they do business, by building schools, building hospitals, offering scholarships, etc.

In conclusion, as business managers, it is pertinent to critically study the ethics of

the countries you wish to do business with and the policies that governed such

business activities.

3.2 Theories of Business Ethics

This section examines three theories of business.

3.2.1 Stakeholder Theory

The stakeholder theory of the firm is used as a basis to analyze those groups to whom the firm should be responsible. In this sense, the firm can be described as a series of connection of stakeholders that the managers of the firm attempt to manage. A stakeholder is any group or individual who can affect or is affected by the achievement of the organization‘s objectives. Stakeholders are typically

analyzed into primary and secondary stakeholders. Primary stakeholder group is one without whose continuing participation in the corporation the business will survived as going concern. A primary group includes investors, employees, customers and suppliers, together with the public. The secondary groups are defined as those who influence or affect the operations of the corporation but not engaged in any transaction with the corporation and thus not essential for its survival.

3.2.2 Social Contract Theory

The social contract theory has a long tradition in ethical and political theory. In

general, this theory considers the society as a series of social contracts between members of society and society itself. The social contract theory in business ethics argues that corporate rights and responsibilities can be inferred from the terms and conditions of an imaginary contract between business and society

An integrated social contracts theory, as a way for managers to take decisions in an

ethical context, has been developed. Here, distinction is made between macro

social contracts and micro social contracts. Thus, a macro social contract in the

context of communities, for example would be an expectation that business

provides some support to its local community and the specific form of involvement

would be the micro social contract. Hence companies who adopt a view of social

contracts would describe their involvement as part of social expectation.

3.2.3 Legitimacy Theory

Legitimacy is defined as a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed

system of norms, values, beliefs and definitions. There are three types of organizational legitimacy: Pragmatic, Moral and Cognitive.

It should be pointed out that legitimacy management rests heavily on

communication. Therefore, any attempt to involve legitimacy theory, there is a need to examine some forms of corporate communications.

Self Assessment Exercise

Briefly differentiate between primary and secondary stakeholders

4.0 Conclusion

Laws, acts, policies and by-laws are inevitable as long people co-exist. It therefore implies that there is no society that exists without some governing rules and regulations. Likewise business do not operates in isolation. Business do operates under certain prescribed laws, Acts, norms, culture, etc. This is refers as business ethics. Business ethics are the accepted principles of right or wrong governing the conduct of business people. Understanding of these ethical laws as they affect business activities is inevitable in modern business activities. As business managers, you are at the liberty to go into any forms of business of your choice;

however, you should understand the policies of the government in relation to such

business.

5.0 Summary

In this unit, you learnt about business ethics, ethical issues in business activities, and theories of business ethics. Ethics as it applies to business vary from one country to another. This is because there are some factors which accounted for this, such as culture, political differences, etc. For one to be successful manager, there is a need to examine ethics issues as it apply to intended business

6.0 Tutor Marked Assignment

Briefly explain the concept of social responsibility

7.0References/Further Readings

Charles, H. W.L (2008) Global Business Today, 5

^th

Edition, New York, McGraw-Hill Companies

Peter, S (2002) ―One World‖, The Ethics of Globalization New Haven: Yale University Press

Onkvisit, S and Shaw, J.J (1997) International Marketing –

Analysis and Strategy, 3^rd

Edition, New Jersey,

Prentice-Hall, Inc.

In document High-level synthesis and rapid prototyping of asynchronous VLSI systems (Page 44-49)