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ethics and social

responsibility in
international
business

international business, 5th edition

chapter 5

Chapter Objectives 1
Describe the nature of ethics
Discuss ethics in cross-cultural and
international contexts
Identify the key elements in managing
ethical behavior across borders
Discuss social responsibility in crosscultural and international contexts

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Chapter Objectives 2
Identify and summarize the basic areas
of social responsibility
Discuss how organizations manage
social responsibility across borders
Identify and summarize the key
regulations governing international ethics
and social responsibility

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Exporting Jobs or
Abusing People?
Minute Maid
Tropicana
Nestle
Nike

5-4

Ethics
Ethics is an individual's
personal beliefs
about whether a
decision, behavior, or action
is right or wrong.

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Ethical Generalizations
Individuals have their own personal belief
systems
People from the same cultural context will
tend to hold similar beliefs
Behaviors can be rationalized
Circumstances affect adherence to belief
systems
National culture is intertwined with ethics
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Figure 5.1 Ethics in a


Cross-Cultural Context
Behavior of
Organization
Toward Employees

Behavior of
Employees
Toward Organization

Cultural
Context

Behavior of Employees
and Organization
Toward Other Economic Agents
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How Organizations Treat


Employees
Some businesses in
Africa have taken
steps to educate
their employees
about how AIDS is
contracted.

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Acceptability of Bribery

5-9

Acceptable

Unacceptable

Russia

Australia

China

Sweden

Taiwan

Switzerland

South Korea

Austria

Managing Ethical Behavior


Across Borders
Guidelines or codes
Ethics training
Organizational practices
Corporate culture

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Corporate Social Responsibility


Corporate social responsibility is
the set of obligations an organization
undertakes to protect and enhance
the society in which it functions.

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Areas of Social Responsibility

Organizational
stakeholders

Natural
environment

5-12

General social
welfare

Examples of Companies with a


Commitment to CSR

5-13

L.L. Bean

Dell Computer

Toyota

DaimlerChrysler

Lands End

BP

3M

Honda

Map 5.1 Social Responsibility


Hot Spots

5-14

Approaches to Social
Responsibility
Obstructionist
Defensive
Accommodative
Proactive

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Figure 5.3 Approaches to


Social Responsibility

Most
Responsible

Least
Responsible

Obstructionist

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Defensive

Accommodative

Proactive

Obstructionist Stance
Do as little as possible to address
social or environmental problems
Deny or avoid responsibility
Examples
Astra
Nestle
Danone
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Defensive Stance
Do what is required legally, but
nothing more
Corporate responsibility is to
generate profits
Example
Philip Morris

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Accommodative Stance
Meet ethical and legal requirements and
more
Agree to participate in social programs
Match contributions by employees
Respond to requests from nonprofits
No proactive behavior to seek such
opportunities

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Proactive Stance
Strong support of social responsibility
Viewed as citizens of society
Seek opportunities to contribute
Examples
McDonalds
The Body Shop
Ben & Jerrys

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Managing Compliance Formally

Legal compliance

Ethical compliance

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Philanthropic giving

Managing Compliance Informally

Leadership

Organizational
culture

5-22

Whistle-blowing

Evaluating Social Responsibility


A corporate social audit is a formal
and thorough analysis of the
effectiveness of the firms social
performance.

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Steps in Corporate Social Audit


Define social goals
Analyze resources devoted
to each goal
Determine degree of
achievement for each goal
Make recommendations
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Actors in
Policy Formulation Process

The state

The market

5-25

Civil society

Regional Stereotypes
Anglo-Saxon
approach
Asian
approach
Continental
European approach
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Regulating International Ethics


and Social Responsibility
Foreign Corrupt Practices Act (FCPA)
Alien Tort Claims Act
Anti-Bribery Convention of the
Organization for Economic Cooperation
and Development
International Labor Organization (ILO)

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