WHEN ETHICS TRAVEL : THE PROMISE AND PERIL OF GLOBAL

BUSINESS ETHICS

Authors: Thomas Donaldson & Thomas W. Dunfee

Presented by: Michael Mosley

Education:◦ PhD University of Kansas, 1976◦ BS, University of Kansas, 1967

Outstanding Teacher of The Year Award:◦ 2005 & 1998

“Named Ethisphere Magazine’s most influential “thought leader” in 2007 ranking of the 100 Most influential people in business ethics (Donaldson).”

Current Professor at Wharton University of Pennsylvania ◦ Previous professor at Georgetown University, University of

Virginia, and Loyola University of Chicago

THOMAS DONALDSON

Founding director of the Wharton Ethics Program

Three-term chair of the Department of Legal Studies and Business Ethics

President of the Society of Business Ethics

Appraised for his path breaking work “Ties That Bind: A Social Contracts Approach to Business Ethics”(Lavengood).

THOMAS W. DUNFEE

Hypernorm ◦ Universal norms that apply to all individuals.

Macro Social Contract◦ Provide global norms

Micro Social Contract◦ Norms developed for the community

Moral Free Space◦ Norms that are inconsistent with at least some other

legitimate norms existing in other economic cultures

Important Terms

Dealing with bribery example ◦ Ben & Jerry’s

Can managers successfully maneuver the disturbing gray zones that lie at the intersections of different cultures?

Corporate ethics and values programs are in vogue

GLOBAL MANAGER DECISIONS

Accept whatever prevails in the host country Exposes Company Neglects hypernorms

Exporting all home-country values

“Photocopy” Disrespectful Neglects moral free space

TAKING ETHICS PROGRAMS GLOBALLY : COMMON MISTAKES

Face conflicts and ethics

Learn how to cut the Gordian Knot

ISCT (International Social Contract Theory)

HOW TO SUCCEED IN GLOBAL ETHICS

2 Aspects of ISCT

Make use of hypernorms Or called “necessary social efficiency”

Identify Microsocial Contracts

CUTTING THE GORDIAN KNOT

Important Question

◦ Do cultural differences add up to different microsocial contracts with different authentic, legitimate norms being affirmed by different cultures?

MAPPING INTERNATIONAL BUSINESS ETHICS: CONTRACTS AND MORAL FREE SPACE

Kluckhorn, Hofstede, and other theorists have shown the importance of cultural differences

Ethical implications of these differences remains unexplored

Example Answer A definite right?

Some right? No right

INTERPRETING ETHICAL DIFFERENCES

Styles of ethical approach:

◦ Foreign Country Type◦ Empire Type◦ Interconnection Type◦ Global Type

WHAT MAKES A COMPANIES CULTURE UNIQUE FROM THE VANTAGE POINT OF ETHICS?

Acknowledges

◦ Universal moral limits

◦ Ability of communities to set moral standards of their own.

INTERACTIVE TYPE ALONE SATISFIES ISCT

Milton Rokeach value scale

Data indicated that different values, not only existed, but also converged neatly in most instances on a national basis

MORAL FREE SPACE DIFFERENCES EXISTS THAT ARE BOTH LEGITIMATE AND AUTHENTIC

One Extreme Boddewyn and Brewer

◦ “When companies seek competitive advantages, bribery, smuggling, and buying absolute market monopolies are not necessarily ruled out.”

Other Extreme DeGeorge –

◦ “Every company must produce more goods than harm for the host country”

DIFFERING ADVICE FROM ACADEMICS

THE ISCT GLOBAL VALUES MAP

Hypernorm

Consistent norms

Moral Free Space

Illegitimate Norms:

Incompatible with

Hypernorms

Illegitimate Norms: Incompatible with Hypernorms

Low level bribery

Competing for bids

Should these situations be examples of authentic norms?

USING ISCT MAP:BRIBERY AND SENSITIVE PAYMENTS

Violates a micro social contract specifying the duties of the agent

Violation of a duty by the person accepting the bribe to the principal for whom he acts as an agent

Has the person making the payment also committed an ethical error?

ETHICAL PROBLEMS WITH BRIBERY FROM THE VANTAGE POINT OF ISCT

Myth: Bribery is accepted wherever it flourishes

Fact: “There is not a country in the world where bribery is either legally or morally acceptable”- Fritz Heiman

BRIBERY IS TYPICALLY NOT AN ETHICAL FORM

Important question Is bribery only wrong because most people don’t like it?

Does a hypernorm disallowing bribery exists?

“Positive transnational right on political participation. (Malone).”

Transcultural norm implicit in political writings of Locke, Jefferson, Kant, and Rawls

BRIBERY MAY VIOLATE THE HYPERNORM SUPPORTING POLITICAL PARTICIPATION AND EFFICIENCY

What about bribes to employees of corporations?

What about smaller payoffs to public officials?

Is bribery inefficient?

Efficiency Hypernorm

BRIBERY MAY VIOLATE THE HYPERNORM SUPPORTING POLITICAL PARTICIPATION AND EFFICIENCY

“Only country to pass a comprehensive act against bribery (Foreign Corrupt Practices Act)

(Palazzolo).”

“From 1977 to 1992 U.S. fined or imprisoned more corporate officers and prominent businessmen than all other capitalist countries combined (Organizational Behavior Reader).”

Level in host countries background institutions

BRIBERY HARMS EFFICIENCY IS ESPECIALLY PRONOUNCED IN THE U.S.

Never “do in Rome as the Romans do” philosophy

Study of hypernorms suggest that we are more alike than we seem

When the rules of the game are different so are the ethics of playing it

Complying with hypernorms often demands considerable managerial activity

Being true to one’s ethics

PRACTICAL IMPLICATIONS OF ISCT FOR GLOBAL COMPANIES

THE ENDQ&A

“Donaldson, Thomas- The Wharton School of the University of Pennsylvania." Legal Studies and Business Ethics Department - The Wharton School of the University of Pennsylvania. Web. 23 Feb. 2011. <http://lgst.wharton.upenn.edu/people/faculty.cfm?id=1116>.

Lavengood, Lawrence G. "Thomas Donaldson and Thomas W. Dunfee, :Ties That Bind: A Social Contracts Approach to Business Ethics." Ethics 111.3 (2001): 627-30. Print.

Malone, Barry, and Elias Biryabarema. "Uganda Votes after Campaign Marked by Bribery Claims| Reuters." Business & Financial News, Breaking US & International News | Reuters.com. 18 Feb. 2011. Web. 23 Feb. 2011. <http://www.reuters.com/article/2011/02/18/us- uganda-election-idUSTRE71H16320110218?pageNumber=2>.

Palazzolo, Joe. "Challenge Could Break New Ground In FCPA - Corruption Currents - WSJ." WSJ Blogs - WSJ. Web. 23 Feb. 2011. <http://blogs.wsj.com/corruption-currents/2011/02/22/challenge-could-break-new-ground-in-fcpa/?KEYWORDS=China and bribery>.

Organizational Behavior Reader, The (8th Edition) (9780131441507): Joyce S Osland, Marlene E. Turner, David A. Kolb, Irwin M Rubin: Books." Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & More. Web. 24 Feb. 2011. <http://www.amazon.com/Organizational-Behavior-Reader-Joyce-Osland/dp/0131441507>.

 

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