Ethics in Business Negotiations

Prof Dr. Helen Rogers

Hofmann SarahJurado AlejandraGöther RobertBarbuletiu AntoniaZaplatnikov Leonid

2009

Friedrich-Alexander Universität Erlangen-NürnbergLehrstuhl für Internationales Management

International Business Negotiations

Ethics in negotiations Global Code of Ethics Conclusion Sources Questions

See an example on

http://www.youtube.com/watch?v=4HC3xwlfcFM

http://www.youtube.com/watch?v=4HC3xwlfcFM


Ethics in negotiations

Global Code of Ethics

Advantages and Feasibility

Organisations and Rankings

UN Global Compact

Conclusion

Sources

Questions

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Ethics in negotiations Global Code of Ethics Conclusion Sources Questions 4

Bribery

Buying information

Buying influences

Use instrumental communication

Use contracts and clauses

Be unloyal


Source: Ghauri, Ursunier: Intern. Bus. Neg., 2nd Ed.


Is a formal written statementsformal written statements of the values and business practices of a firm.

Describes how employees are expected to carry out to carry out their duties their duties and conduct themselves.conduct themselves.

Across allall the world, in allall branches and companies. Across allall the world, in oneone global branch. Across allall the world, in oneone global company.


INTERNATIONAL TOBACCO PRODUCTS MARKETING STANDARDS

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Key topics:

Content restrictions

Media usage restrictions

Promotion standards

Why Global?

accepted by 3 biggest companies in a branch

acting all over the world

in all the countries and culturesSource: www.bat.com


To be consistent To be consistent in a firm’s actions across different societies and situations

CongruenceCongruence in perceptions and expectations will certainly result in less ethical conflicts

IIt can give practical advicespractical advices before and during negotiations, such as...



Global code of Global code of ethics in IBNethics in IBN

Potential positive Potential positive consequencesconsequences

ConstraintsConstraints

• Individual level

• Organisational level

• Industrial level

• Cultural Dimensions

• Societal Level

““Could be feasible BUT...“Could be feasible BUT...“

By adressing these constraints a gloal code of ethics will be more acceptable in different countries.

By adressing these constraints a gloal code of ethics will be more acceptable in different countries.

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Source: Rallapalli, Kumar C


1.1. Individual Level Individual Level moral reasoning

2.2. Organisational Level Organisational Level corporate code of ethics

3.3. Industrial Level Industrial Level different practices

4.4. Cultural Dimensions Cultural Dimensions individualism / collectivism

power distance

uncertainty avoidance

masculinity / femininity

5. Societal Level Societal Level level of economic developement

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Source: Rallapalli, Kumar C


U.S. Federal Corruption Practices Act 1977.

Anty-bribery laws apply extrateritorially.

Firms: internal audit control.

Illegal to influence foreign officials.

Claims: - competitive disadvantage for U.S. companies.

- Destabilisation of foreign regimes.

However american multinationals reduced substantially these practices.

Source: Ghauri, Ursunier: Intern. Bus. Neg., 2nd Ed.

FCPAFCPA


• Growing tendency of investigations

• Example: Universal Corporation

• On-Going Investigation because of illegal payments of subsidiarys in an amount of $ 1 million for 5 years

• Ethics complaint hotline

• Full cooperation of the Audit Commitee

• Possible no terrible penalisation because of business ethics policy

FCPAFCPA

Source: FCPA Digest of Cases

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Strategic policy initiative

10 principles10 principles for business: to human rights

labor standards

environment

anti-corruption

Largest corporate citizenshipcitizenship and sustainabilitysustainability initiative in the world

Over 47004700 corporate participants and stakeholders from over 130130 countries

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Source: www.unglobalcompact.org


Source: Schwartz, Mark S.



Business Ethics are an important factor in IBN.

Global Codes of ethics are possible, BUT...

Difficult implementation, has to consist of global values and specific behaviour (cultures, branches, economic development).

ConclusioConclusionn

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Certificatates (ISO) for ethics management, global certification of codes of ethics.

Importance of ethics growing tendency Ethics as a competitive advantagebetter differentiation, cost advantage.

ProposalsProposals

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Ghauri, Pervez N. ; Usunier, Jean-Claude: 2003, International Business Negotiations (2nd Edition), Pergamon, pp. 438-459

Newcomb, Danforth; Urofsky, Philip: 2008, FCPA Digest of Cases and Review Releases Relating to Bribes to Foreign Officials under the Foreign Corrupt Practices Act of 1977, Sherman & Sherman, pp. 4, 229

Rallapalli, Kumar C.: 1999, A Paradigm for Development and Promulgation of a Global Code of Marketing Ethics, Journal of Business Ethics 18, pp. 125-137

Schwartz, Mark S.: 2005, Universal Moral Values for Corporate Codes of Ethics, Journal of Business Ethics 59, pp. 27-44

Zabid, Abdul Rashid; Jo, Ann Ho: 2003, Perceptions of Business Ethics in a Multicultural Community, Journal of Business Ethics 43: pp. 75–87.

British American Tobacco Official Site, Int. Tobacco Products Marketing Standards http://www.bat.com/group/sites/UK__3MNFEN.nsf/vwPagesWebLive/DO52ADRK?opendocument&SKN=1 (stand 25.01.2009)

Ethisphere Institut Official Site, 2008 World’s Most Ethical Companies, http://ethisphere.com/wme2008/ (stand 17.01.2009)

10 Principles of the UN Global Compact, www.unglobalcompact.org/ AbouttheGC/TheTENPrinciples/index.html (stand 25.01.2009)

Films

Reitman, Jason (2005), Thank You For Smoking, FOX Searchlight

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Ethics in Business Negotiations

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