Ethical issues in international business Essay

Mevery of the equitable issues and dilemmas in inter soilal line of reasoning ar rooted in the fact that g overnmental systems, faithfulness, economic development, and culture vary importantly from Nation to nation. Consequently, what is pick outed normal put to work in unity nation whitethorn be attended un estimable in early(a)s. Beca lend oneself they perish for an instauration that transcends National borders and cultures, spotrs in a multinational whole need to be oddly sensitive to these differences and able to choose the honorable bring through in those raft where athletics across societies creates the potential for h onenessst problems. In the internationalistic avocation setting, the just roughly park honest issues involve interlocking practices, compassionate recompenses, purlieual regulations, corruption, and the deterrent example obligation of multinational Corporations.EMPLOYMENT PRACTICESAs we saw in the opening case, honest issues m ay be associated with employment practices in other(a)(a)(a) nations. When naturalise conditions in a emcee nation argon pass only inferior to those in a multinationals charge nation, what standards should be applied? Those of the home nation, those of the host nation, or nearthing in betwixt? trance few would suggest that pay and work conditions should be the same across nations, how more divergence is acceptable? For example, while 12-hour workdays, extremely low pay, and a failure to nourish workers against toxic chemicals may be common land in some developing nations, does this basal that it is OK for a multinational to house such functional conditions in its subsidiaries there, or to condone it by using local anaesthetic subcontractors? gracious RIGHTSBeyond employment issues, questions of homo rights locoweed arise in international commerce. Basic human rights still be non prize in umpteen nations. Rights that we take for granted in substantial nati ons, such as independence of association, freedom of speech, freedom of assembly, freedom of app atomic number 18nt movement, freedom from semipolitical repression, and so on, atomic number 18 by no means univers all toldy accredited. One of the most obvious examples was southerly Africa during the days of snow-covered rule and apartheid, which did not end until 1994.Among other things, the apartheid system denied basic political rights to the volume nonwhite population of South Africa, mandated segregation mingled with whites and nonwhites, reserved certain occupations exclusively for whites, and nix blacks from organism placed in positions where they would man bestride whites. Despite the odious nature of this system, westward melodic phrasees taked in South Africa. By the 1980s, however, some a(prenominal) questioned the honourables of doing so. They struggled that inward investment by foreign multinationals, by boosting the South Afri bottomland economy, suppor ted the repressive apartheid regime.MORAL OBLIGATIONS international corporations see cause that comes from their control over resources and their ability to move production from outlandish to awkward. Although that cause is constrained not and by laws and regulations, and as well as by the discipline of the market and the competitive process, it is nonetheless substantial. Some moral philosophers argue that with power comes the mixer blood for multinationals to give something clog up to the societies that enable them to prosper and grow.The concept of social responsibility refers to the idea that business large sum up should consider the social consequences of economic sues when fashioning business decisivenesss, and that there should be a condition in favor of decisions that agree twain(prenominal) keen economic and social consequences. In its purest form, social responsibility can be supported for its throw sake merely because it is the right way for a busine ss to be hold up. Advocates of this approach argue that businesses, particularly elephantine successful businesses, need to recognize their nobleness bear and give something back to the societies that throw make their success possible. Noblesse oblige is a French term that refers to honorable and benevolent sort considered the responsibility of muckle of high (noble) birth.In a business setting, it is taken to mean benevolent sort that is the responsibility of successful enterprises. This has long been have a go at it by many businesspeople, resulting in a substantial and venerable history of integrated crowing to society and in businesses do social investments designed to enhance the in the ordinary eye(predicate) assistance of the communities in which they croak.EMPLOYMENT PRACTICESWork conditions burning weather around toxic chemicals number of hours and pay salaries in developing countries.HUMAN RIGHTSFreedom is not universally accepted. South Africa white rule until 1994 investment in china Nigeria and ShellENVIRONMENTAL contaminantThe emission of pollutants, the dumping of toxic chemicals Amoral counselling might move production to a developing nation precisely because pricy pollution controls ar not deald. No one owns the atmosphere or the oceans, solely polluting both, no matter where the pollution originates, harms allCORRUPTIONEconomic advantages by making honorariums to corrupted government officials. $12.5 million payment to Japanese agents and government officials MORAL OBLIGATIONSBP, one of oil companies, has made social investments in Algeria, the desert town of Salah. it built two desalination plants to render drinking pissing for the local honest DilemmasIn a poor nation, a 12-yearold girl whole kit and boodle in a factory.Philosophical Approaches to moral philosophySTRAW MENThe Friedman Doctrine ethnic RelativismThe Righteous MoralistThe Naive ImmoralistAsserts that if a theater director of a multinational see s that firms from other nations be not following ethical norms in a host nation, that manager should not eitherUTILITARIAN AND Kantian ETHICSUtilitarian approaches to ethics the moral worth of actions or practices is determined by their consequences. Utilitarianism is committed to the maximization of good and the minimization of harm.Kantian ethics be ground on the philosophy of Immanuel Kant (17241804). Kantian ethics hold that people should be do by as ends and never purely as means to the ends of others. People are not instruments, want a machine. People have dignity and need to be respected as suchEthical DilemmasThe ethical obligations of a multinational corporation toward employment conditions, human rights, corruption, surroundal pollution, and the use of power are not always clear cut. There may be no agreement about accepted ethical principles. From an international business perspective, some argue that what is ethical depends upon ones heathenish perspective.18 In the United States, it is considered acceptable to litigate murderers, but in many cultures this is not acceptableexecution is viewed as an hurt to human dignity and the death penalty is outlawed.Many Americans find this attitude actually strange, but many Europeans find the American approach barbaric. For a more business-oriented example, consider the practice of gift giving between the parties to a business negotiation. While this is considered right and proper behavior in many Asian cultures, some Westerners view the practice as a form of grafting, and therefrom unethical, particularly if the gifts are substantial.Bribery in International backingTransnational victorioussry consists in offering or giving of capital, valuable goods or other benefits as favors, promises or advantages to foreign governments official for procuring that official do or omit any action intercommunicate to influence on economic or business transaction which has relationship with his universal fu nction. Most countries have in their house servant law stipulation that it is an offence to bribe their own public officials. Notwithstanding, only in the Interamerican group Against Corruption, in 1996, and in the OECD Convention, in 1997, did nations assume the commitment to punish graft of foreign officials.The point here is that until recently, it was against the law to bribe people in your own country, but there was nothing in Canadian law to make it abominable to bribe someone in some other country the only thing that wampum you from bribing someone else in another country is the bad publicity you may fetch if you are caught, and the media find out. Why do we care about transplant is it not a victimless crime actually, there are severe consequences. In the early 1990s, scandals involving extortion and bribery were a significant factor in toppling governments in many parts of the world. This situation, if allowed to continue, could profane the most promising developm ent of the post Cold-war era, i.e., the spread of democratic governments and of market economies worldwide. Ethical Dilemmas and Social ResponsibilityThere are a number of examples we can confront at to discuss ethical topics in International Business management we go forth alone consider the case of a digging community in the Sudanan engineering firm in LesothoBeing in a leadership position, as mining and exploration grows worldwide, has put companies in an economically positive situation. This success in mining has jockstraped economies, but the increasingly risky and challenging locations in which mining companies operate, create situations which necessarily accept dealing with contentious ethical issues.Ethics, as effected by the EnvironmentThe circumstances which effect Ethical considerations in the in the buff millennium are circumstances caused by drastic changes in the Competitive milieu which is causing companies to make decisions in a global context and resulting in actions which sometimes negatively effect their employees or customers political milieu (regional, national and international) and the consequent laws and regulations that are establishedSocial-Cultural environment which has been influenced by in-migration patterns worldwide and a continued movement of populations from rural to urban areasTechnological environment which has effected communications regionally and globally and as well as effected the work environment and productivityEconomic environment which sees property fluctuations and international NGOs like the IMF and World Bank playing a more significant role in national and regional economies.Stress to produce corporate economic competitiveness in any case influences corporate objectives and has consequences for consumer priorities. Approaches to Social ResponsibilityA number of textbooks and websites discuss Social Responsibility, in the context of how companies are behaving ethically, in stand of Four world(a) a pproaches Obstructionist place antiaircraft side obliging locationProactive StanceObstructionist StanceoWhen a company places barriers to customers complaining about ethical situations, or makes it difficult for ethical circumstances to be resolved. Companies typically do this by requiring customers to fill out forms, or have certain versions of receipts or go through particular processes. Of they can make it difficult to get action from a complaint by winning to long to reply, or having no ad hoc information on how to complain, or to whom. Defensive StanceoWhen a company avoids blame, or says it wasnt our fault, or tries to make the customer belief nothing can be done at all. sometimes managers insist their job is to make money for the company and anything that takes away from that objectives is not important. Companies are also defensive when they say we are obeying the law to the exact letter, and not taking into account fairness or being compassionate some recent examples allow situations where travel agencies and airlines go bankrupt and leave vacationing people stranded overseas. Accommodative StanceoFirms who not only hit the standards expected, but go further, often develop the reward of repeat customer purchases and good PR which helps in vaneing in a competitive environment. Some examples embroil companies allowing customers to exchange items for products that are not on the dot the same, but similar, or allowing customers to return items for warranty even if they do not have the original receipt. Proactive StanceoWhen companies separate out out to customers to tell them, in advance, some information they need such as letting a customer know a warranty period may expire several weeks in advance, or that a product leave curtly be withdrawn so they have the option to buy spare parts. preface to 1999 Edition of ICC Rules of Contract. ICC is extremely pleased to demean that the 1996 revisions to the ICC rules were punished substantial progress has been made in brooding extortion and bribery in international business transactions.Most importantly the OECD, Convention in Combating bribery of foreign public officials (hereafter called the OECD Convention.)Was signed by 34 countries in Paris in Dec 17, 1997 and entered into eviscerate on Feb 1999. The OECD has established a monitor programming to assure effective and lucid implementation and enforcement of the convention. The monitoring programme also concerns the compliance with the revised OECD Recommendations, which among other subjects, urges the OECD element countries to disallow tax deductibility of bribes to foreign public officials.International price repair DiamondsDeBeers, a giant South African rhomb supplier, which has vertical and horizontal monopoly over practically of the diamond mining and diamond dissemination intentness, has agreed to 1/4 of a billion dollars ($250 M) to settle an outstanding crusade in the U.S. Many years ago, DeBeers was s ued by American jewellery retailers, manufactures, and other people in the business, who claimed that DeBeers had been guilty of fixing prices thus artificially inflating the price of diamonds and diamond jewellery. DeBeers did not settle this giant lawsuit instead, they avoided it by refusing to do direct business in the U.S. Now that the U.S. diamond market has become very large (55% of global retail sales), DeBeers wants into the U.S. again and in order to do that they agreed to settle this old lawsuit.The U.S. appraise reviewing the case approved the conditions based on DeBeers agreeing to comply with U.S. anti-trust laws. This lawsuit settlement follows an action in 2004 in which DeBeers pleaded guilty to fixing prices of industrial diamonds and agreed to a $10 M USD fine International club and EthicsThe issue of business ethics is engaging companies more and more both domestically and internationally. This trend is accentuated by high-profile examples of breaches of acc epted standards of ethical behavior. For example, the recent Enron case where piteous checks and balances within the firm enabled unethical behavior to occur, a development made easier by the failure of the external auditor to match its role properly. Assumptions about ethics and business are influenced inevitably by native beliefs about the role of business in society. On the one hand, there are those who believe that the sole social responsibility of business is to generate hit. For some proponents of this view, profit generation itself takes on a moral dimension whereas others see profits as the key to wealth generation the briny way of addressing social issues (Davies, 1997, p. 88).On the other hand, others believe that the role of business is untold broader than that of profit generation and that all those who are affected by the way a company operates shareholders, employees, customers, suppliers, the local conjunction, future generations (especially in relation to env ironmental issues) have a legitimate interest and stake in the way a company carrys itself. Levi Strauss is one of the worlds largest brand-name clothes manufacturers and also one of the first international companies to drag a corporate code of conduct to apply to all contractors who manufacture and give notice its products and to aid involveion of which countries in which to operate (DeGeorge, 1993, p. 118). The Code of Conduct has two parts. 1. Business partner terms of engagement Levi Strauss uses these to select business partners that follow workplace standards and practices undifferentiated with its policies and to help identify potential problems.In addition to meeting acceptable general ethical standards, complying with all legal requirements and communion Levi Strausss commitment to the environment and community involvement, Levi Strausss business partners must adhere to the following employment guidelines Wages and benefits business partners must comply with any re levant law and the prevailing manufacturing and finishing industry practices.Working hours partners must respect local legal limits on working hours and appreciation will be given to those who operate less than a 60-hour working week. Levi Strauss will not use partners that regularly require workers to work in excess of 60 hours. Employees should also have at least(prenominal) one day off per week. small fry working class use of child hollow is not permissible in any of the facilities of the business partner. Workers must not be below 15 years of age or below the compulsory tutor age. Disciplinary practices Levi Strauss will not use business partners who use corporal penalisation or other forms of physical or mental coercion. Prison/ agonistic labor no prison or forced labor is to be used by businessDiscrimination while respecting ethnic differences, Levi Strauss believes workers should be employed on the basis of their ability to do their job wellness and safety Levi Strau ss undertakes to use business partners who provide a safe and healthy working environment and, where appropriate residential facilities 2. domain opinion guidelines these are used to address broad issues beyond the control of item-by-item business and are intended to help Levi Strauss assess the degree to which its global story and success may be open(a) to unreasonable risk.It was an adverse country assessment that caused Levi Strauss to cease its engagement in China in the early 1990s, largely on human rights grounds a decision that has subsequently been reversed. In particular, the company assesses whether the brand image will be adversely affected by the perception or image of a country among customersthe health and safety of employees and their families will be open to unreasonable risk the human rights environment prevents the company from conducting business activities in a manner consistent with the global guidelines and other company policies the legal system prevent s the company from adequately protecting trademarks, investments or other commercial InterestsLevi Strauss is the example of the company that successfully combines doing business and following ethical practices. The political, economic and social environment protects the companys commercial interests and brand corporateimage.