EBS, Term II 15-Nov-2019

Upcoming sessions
Today (Monday, 18-November-2019)
 Global Ethics – part 2
Wednesday, 20-November-2019
 Technology and Ethics
ETHICS, BUSINESS AND SOCIETY Friday, 22-November-2019
TERM II  Technology and Ethics presentations (sort-of practice for project
SESSION 16 presentations)
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Wednesday, 27-November-2019
 Project presentations
Friday, 29-November-2019
 Project presentations

Shobha Das Ethics, Business and Society 1 Shobha Das Ethics, Business and Society 2

Global Ethics Universal values

Globalization Schwartz and colleagues

1. Power: authority; leadership; dominance, social power, wealth

Ethical issues in the global environment 2. Achievement: success; capability; ambition; influence; intelligence; self-
respect
Types of ethical positions 3. Hedonism: pleasure; enjoying life
4. Stimulation: daring activities; varied life; exciting life
Integrative Social Contract Theory (ISCT) 5. Self-direction: creativity; freedom; independence; curiosity; choosing
your own goals
 Universal values 6. Universalism: broadmindedness; wisdom; social justice; equality; a
world at peace; a world of beauty; unity with nature; protecting the
environment; inner harmony
 MNCs and the global environment 7. Benevolence: helpfulness; honesty; forgiveness; loyalty; responsibility;
friendship
 Types of global firms 8. Tradition: accepting one's portion in life; humility; devoutness; respect
for tradition; moderation
 Improving global business ethics 9. Conformity: self-discipline; obedience
10. Security: cleanliness; family security; national security; stability of social
 Applying things learnt order; reciprocation of favors; health; sense of belonging

Shobha Das Ethics, Business and Society 3 Shobha Das Ethics, Business and Society 4

MNCs and the global environment
NOT responsible for all globalization, but are
associated with it significantly
 Change in the nature of MNCs
 not just from the US, UK
 Change in the scope of MNCs
 entry into industries that affect national policies
 not just selling of products and services
Shobha Das Ethics, Business and Society
MNCs and the global environment
Challenges
 Building Legitimacy – economic, legal, ethical,
philanthropic (A pyramid of global CSR - Carroll, 2004)
 Role in the host country
 Optimization –global(MNC) vs. local (host government)
 Differing Philosophies
 Cultural
 Business and Government interactions
 Management and control of global operations
 Organization structure and design
 Human resources
 Exploration of global markets
 Product need/use/ability to buy/communications
 Modify/redesign
 Impact of products/services
 Effect on politics/policies
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Shobha Das 1
EBS, Term II 15-Nov-2019

Types of approaches by global firms + Improving global business ethics

Types of ethical position + ISCT - Codes of conduct
Types of approaches by global firms (by George Enderle)  Efforts by NGOs/non-profit organizations
 Fair Labor Association (www.fairlabor.org)
 Foreign country type - conforms to local customs and ethics assuming  Social Accountability International (http://www.sa-intl.org ) – SA8000
that the ethical standards of the host country are adequate and  Transparency International (TI) – Corruption Perception Index, and Public
appropriate. Integrity Index
 represents relativism.  UN Convention Against Corruption
 no limits on the Moral Free Space of the host country
 Regional/Country-level initiatives
 Empire type - applies its domestic or home country standards without  OECD Anti-Corruption measures
making any serious adaptations to the host country.  US - Foreign Corrupt Practices Act (FCPA)
 represents imperialism  India
 greatly limits the Moral Free Space of the host country
 Public servants in India - Indian Penal Code, 1860, Prevention of Corruption
 Interconnection type – see the international sphere as differing Act, 1988.
significantly from the domestic sphere in that their interconnectedness  The Benami Transactions (Prohibition) Act, 1988
transcends national identities.  The Prevention of Money Laundering Act, 2002
 represents cosmopolitanism  A signatory (not ratified) to the UN Convention against Corruption since 2005.
 acknowledges both universal moral limits (Hypernorms) and Moral Free Space
 Global type - view the domestic or home standards as not relevant  Corporate codes
 Google - https://abc.xyz/investor/other/google-code-of-conduct/
or applicable, and applies global standards.  Tata Group -
 represents universalism https://www.tata.com/content/dam/tata/pdf/Tata%20Code%20Of%20Conduct.pdf
 if some global standards contradict local standards, then it somewhat limits
the Moral Free Space of the host country
Shobha Das Ethics, Business and Society 7 Shobha Das Ethics, Business and Society 8

Improving global business ethics Improving global business ethics

- Global codes of conduct - Global codes of conduct (contd.)
The online interactive course
The ten principles of UN Global Compact The ten principles of UN Global Compact is about the 10th Principle
https://www.unglobalcompact.org/what-is-gc/mission/principles Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed
 Corporate sustainability starts with a company’s value system and a human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
principles-based approach to doing business.
Labour
 This means operating in ways that, at a minimum, meet fundamental Principle 3: Businesses should uphold the freedom of association and the effective recognition
responsibilities in the areas of human rights, labour, environment and of the right to collective bargaining;
anti-corruption. Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
 Responsible businesses enact the same values and principles
wherever they have a presence, and know that good practices in one Environment
area do not offset harm in another. Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.
 By incorporating the Ten Principles of the UN Global Compact into
strategies, policies and procedures, and establishing a culture of Anti-Corruption
integrity, companies are not only upholding their basic responsibilities to Principle 10: Businesses should work against corruption in all its forms, including
people and planet, but also setting the stage for long-term success. extortion and bribery.
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Improving global business ethics Improving global business ethics

- Corporate practices/programs - Corporate practices/programs
 Ethics as input in Global strategy Five steps for effective anticorruption programs in a
 Levi-Strauss – global sourcing guidelines, publishes company
owned-and-operated, and contracted factories that 1. High-level Commitment by Top Management
produce its brands 2. Detailed Statements of Policies and Operating Procedures
 Starbucks – Fair Trade Certification Program
3. Training and Discussion of Policies and Procedures
 Suspension of activities 4. Hotlines and Helplines for All Organizational Members
 Coca Cola and IBM – India, 1977 5. Investigative Follow-Up, Reporting, and Disclosure
 Exxon-Mobil and ConocoPhillips – Venezuela, 2007

 Ethical impact statements and Audits

 Mattel, Inc. – independent audit and monitoring of its
code

Shobha Das Ethics, Business and Society 11 Shobha Das Ethics, Business and Society 12

Shobha Das 2