Ch6 notes.ppt

-CHAPTER 6:

Key Terms

 corporate social

responsibility (CSR)

 business ethics

 ethical imperialism

 cultural relativism

 pollution

 resource depletion

 sweatshops

 corporate corruption

 dumping

 predatory dumping

 microcredit

Chapter Objectives

By the time you finish this chapter, you should be able to:

 Assess positive and negative effects of MNCs on the countries in which they operate, including the impact on the norms and practices of local and indigenous cultures

 Evaluate the ethical issues that arise for companies competing internationally in relation to the following groups: consumers, stakeholders, employees, the host country, and society as a whole

Chapter Objectives

 Compare Canada with other countries with respect to cultural theories and viewpoints, as they relate to ethics in international business

 Describe working conditions in various international markets

 Explain how globalization creates the need for standardization of products, services, and

What is Corporate Social Responsibility?

Corporate social responsibility

The duty of a company’s management to work in the best interests of the society it relies on for its resources (human, material, and environmental), to advance the welfare of society, and to act as a good global citizen through its policies.

What is Corporate Social Responsibility?

Corporate social responsibility can take many forms, including:

 Making charitable donations

 Treating employees ethically

 Being environmentally conscious

 Ensuring safe working environments

 Sponsoring local sports teams

What is Corporate Social Responsibility?

Benefits of CSR

 Can be used as a marketing tool

 Dissuades governments from implementing

regulations that could interfere with business

 Helps companies attract and retain excellent

employees

Criticisms of CSR

 Costs money, detracts from profits

 Uses employees’ time and energy

 Can distract customers from problems a

company creates

 A company may act

What is Corporate Social Responsibility?

Stakeholder Analysis

 Used to determine which group’s interests are most important when a company is faced with an ethical dilemma

 Primary stakeholders directly affect the company and its profitability

Business Ethics

Business ethics

Business Ethics

The guidelines used when making decisions

include:

 Domestic and international laws

 The company’s code of ethics and corporate governance

Business Ethics

Decision makers can use the test of disclosure method to solve ethical dilemmas:

“How would we feel if everyone knew about the decision we made?”

If they are not concerned, they have likely made an

Business Ethics

There are two methods of thinking about ethical

issues in a global context:

Ethical imperialism

A view of culture based on the idea that there are certain universal truths or values that are standard across all cultures; if something is wrong in one country, it is wrong in all countries.

Cultural relativism

Business Ethics

Ethical Imperialism Cultural Relativism

One set of values for all cultures

Values are dependent on the culture

Right and wrong are the same in all cultures

Right and wrong depend on local values

A person’s ethics are not situational

Ethical Issues in International Business

Ethical issues in international business arise in

the following areas:

 Environmental issues

 Sweatshops

 Corporate corruption

 Dumping

Ethical Issues in International Business

Environmental issues

 Sustainable development—the ability to meet human consumption while maintaining the

environment—is a critical issue for businesses

 Many companies have been responsible for pollution and resource depletion

 Companies and governments often resist

Ethical Issues in International Business

Sweatshops

Factories in underdeveloped and developing countries in which employees work in unsafe environments, are treated unfairly, and have no chance to address those conditions.

Why do sweatshops exist?

Global competitiveness, corporate greed, and consumer expectations of low prices.

Ethical Issues in International Business?

Corporate corruption

Ethical Issues in International Business

Dumping

Selling products in a foreign country below the cost of production or below the price in the home country.

Predatory dumping

An anti-competitive business practice in which

foreign companies price their products below market value to increase sales and force domestic

Ethical Issues in International Business

Poverty

 Over one-quarter of the world’s population lives in intense poverty—accompanied by hunger, lack of shelter and medical care, limited access to

education, high rates of disease, etc.

Ethical Issues in International Business

Microcredit

 Microcredit—the granting of very small loans to spur entrepreneurship—is one way that poverty is being addressed

Non-Governmental Organizations (NGOs)

Non-governmental organizations (NGOs)

development focus that are composed mostly of volunteers, and are predominantly funded through charitable contributions.