*Ethical Issues in the Global ArenaChapter 20

*Identify the concepts of internationalization and globalization of business.Summarize arguments for and against globalization.Explain the evolving role and problems with multinational corporations in the global environment.Recognize the major ethical challenges of operating in the multinational environment.Define ISCT and the concepts of hypernorms and moral free space.Discuss strategies for improving global ethics.Enumerate international rights and moral guidelines for improving business operations in the global sphere. Chapter 2 Outline0

*Chapter 2 OutlineThe New, New World of International BusinessMultinational Corporations (MNCs) and the Global EnvironmentEthical Issues in the Global Business EnvironmentImproving Global Business EthicsSummaryKey TermsDiscussion Questions

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*Introduction to Chapter 2The focus of the chapter is on The transnational economyThe globalization of businessGlobal business ethics0

* Eras of Internationalization0

* Friedmans Eras of Globalization0

*Concepts of Global Business0

*Pros and Cons of GlobalizationFigure 10-10

IMPACT

ONGlobalistsAntiglobalists ConsumersFree trade promotes lower costs, etc.Benefits the wealth at the expense of the poorEmployeesFaster economic growth Higher wages Improved working conditionsPlaces profits above peopleEnvironmentCreates resources needed to address environmental issuesExploits and destroys ecosystemsMore pollutionDevelopingNationsPromotes national economic development, higher standard of living, better working conditions, cleaner environments.World financial institutions conspire to keep poor nations in debtHuman RightsCreates cultures that support law and free expression. Spreads economic / political freedom to far cornersCorporations pursing profits ignore human rights violations, abuse of workers, free speech, etc.

*Backlash Against GlobalizationOutsourcing of jobs to less-developed nations Tenth anniversary of NAFTA0

*Globalists and AntiglobalistsOpen markets across globe Investors, consumers, employees, and environmentalists are better off

Beneficial to poor and rich nations alikeExpansion and greed of corporate enterprises Globalization is responsible for destruction of environments and emerging economies, abuses of human rights, undermining of local cultures, and the sovereignty of nation-states Power of international bodies0

*MNCs and the Global Environment

Underlying challenges of operating in new world of business Corporate legitimacyDiffering philosophies between MNCs and host countriesMNC and host country challenges0

*The Dilemma of the Multinational Corporation Figure 10-20

*Other MNC-Host Country ChallengesCultural differences Business / government differences Management and control of global operationsOrganizational structureHuman resource management Exploration of global marketsModify or redesign products appropriate for the intended marketBe sensitive to the impacts of productsBe sensitive to politically-vulnerable products

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*Ethical Issues in Global Business0

*Social Accountability Child LaborForced LaborHealth and SafetyFreedom of Association and Right to Collective BargainingDiscriminationDisciplineWorking HoursCompensationManagement Systems0

*Arguments For and Against Bribery

Necessary for profits in order to do businessCommon practiceAccepted practiceForm of commission, tax, or compensation

Wrong and illegal in most developed nationsCompromise personal beliefsManagers should not deal with corrupt governmentsOnce started, never stopsOne should take a stand for honesty, morality, ethicsBenefits recipient onlyCreates dependence on corruptionDeceives stockholders and costs customers

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*Initiatives Against Bribery0

* Bribes versus Grease Payments0

* Other Global Ethics IssuesActs of terrorism Kidnappings, murder, and violence against businesspeople Rogue nations0

* Conducting Business Ethically in Foreign EnvironmentsDevelop worldwide codes of conduct Include ethics into global strategy Suspend activities when faced with unbridgeable ethical gaps Develop periodic ethical impact statements0

* The Challenge of the Multinational CorporationBalancing and Reconciling Ethics TraditionsHome Country Ethical StandardsHost Country Ethical StandardsOR0

* Ethical Choices in Home Versus Host Country Situations0

* Ethical Choices in Home Versus Host Country Situations0

*Integrative Social Contract Theory0

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Create global codes of conductIntegrate ethics into a global strategySuspend activities in host countryCreate ethical impact statements and auditsStrategies for Improving Global Business Ethics0

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High-level commitment by top managementDetailed statements of policies and operating proceduresTraining and discussion of policies and proceduresHotlines and helplines for all organizational membersInvestigative follow-up, reporting, and disclosureCompanies Act Against Corruption0

*Key TermsTransnational economyInternationalizationGlobalism or globalizationOutsourcingOffshoringNorth American Free Trade Agreement (NAFTA)Alien Tort Claims ActCorruptionBribesGrease paymentsAnticorruption movementTransparency InternationalCorruption Perception Index

GlobalistsAntiglobalistsMultinational corporationsLess-developed countriesInfant formula controversyBhopal tragedySweatshopsBribe Payers IndexPublic Integrity IndexHypernormsConsistent normsMoral free spaceIllegitimate normsEthical impact statements

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Chapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global Arena2Chapter 10*Chapter 10Ethical Issues in the Global ArenaEras in the Internationalization of BusinessThe Post World War II Decade (19451955)The Growth Years (19551970)The Troubled Years (19701980)The New International Order (1980Present)MNCs and the Global EnvironmentChanged Scope and Nature of U.S.-Based MNCsUnderlying Challenges of Operating in a Multinational EnvironmentMNC-Host Country ChallengesEthical Issues in the Multinational EnvironmentQuestionable Marketing and Plant Safety PracticesSweatshops and Labor AbusesBribery and Questionable PaymentsImproving Global EthicsHonoring and Balancing Ethics of Home and Host CountriesFour Actions for Conducting International BusinessFundamental International RightsSeven Moral GuidelinesGuidelines for International CorporationsSummary

Chapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaQuestions to be resolved by Management:Which ethical standard will be used?Which ethical standard will transcend national boundaries?Worker and product safety?Fair treatment?Health?Discrimination?Freedom?Minimum pay?Consumer rights?Environmental protection?What constitutes moral minimum in each category?Chapter 10*Chapter 10Ethical Issues in the Global ArenaQuestions to be resolved by Management:Which ethical standard will be used?Which ethical standard will transcend national boundaries?Worker and product safety?Fair treatment?Health?Discrimination?Freedom?Minimum pay?Consumer rights?Environmental protection?What constitutes moral minimum in each category?Chapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global ArenaChapter 10*Chapter 10Ethical Issues in the Global Arena