Ethics, sustainability

and CSR in IB
CHAPTER 5
 What we learnt in Chap 4

 Nature of Cross-cultural Risk

 Characteristics of Culture
 Lenses to understand Culture
 Dimensions of Culture
 Cultural Change
 Context in IB
 What we will learn in Chap 5

 Ethical challenges in IB
 Key aspects of International Ethics
 CSR
 Role of sustainability
 Corporate Governance
 Framework for making ethical decisions
 Key concepts in Ethics
 Moral Principles and values that govern the behavior of people, firms, and
governments, regarding right and wrong
 The abuse of power to achieve illegitimate personal gains
 A manner of operating a business that meets or exceeds the ethical, legal,
commercial, and public expectations of customers, shareholders and
communities
 Meeting humanity’s needs without harming future generations
 System of procedures and processes by which corporations are managed,
directed and controlled
 Ethics

Corporate
Governance

CSR

Sustainability
 Ethical Challenges in IB

 Ethics a strategic component or obligation??

 https://www.youtube.com/watch?v=yKIE3IUkkp8&t=8s
 https://www.youtube.com/watch?v=5aywHT8z83E
 Unethical management practices
 https://www.youtube.com/watch?v=ZwFyASop8nc&index=116&list=WL
 Global Sourcing
 Deceptive Marketing
 https://www.youtube.com/watch?v=A74bJS-orlo
 Defective or harmful products or packaging
Intellectual property
Ideas or works created by individuals or firms, including discoveries and inventions, artistic,
musical and literary works; and words, phrases, symbols and designs

Right:
The legal claim through which the proprietary assets of firms and individuals are protected
from unauthorized use by other parties
Bribery

Refers to offering, giving, receiving or soliciting of value to influence the actions of Govt.
official or corporate managers
https://www.youtube.com/watch?v=bnr8xN9kVtY

Corruption

Corruption is an extreme from of unethical behavior where official abuse public power or
profit improperly from government resources or in corporate setup.
Key Aspects of International Ethics
 Ethical behavior is important for several reasons:

 It is simply right thing to do

 It is prescribed in laws and regulations
 It is demanded by customers and governments
 Firms who commit blunders get attention from public and media
 Ethical behavior; enhanced corporate image and selling prospects
Variation in Ethical standards
 It is not necessary that rules in one country are applicable/ accepted in another
country
 Standards vary by level of economic development

 Relativism
 Normativism

 Ethical dilemma
Levels of compliance

CSR

Ethical Behavior

Complying with laws & Regulations

CSR
 Avoiding human rights abuses
 Upholding the right to join or form labor union
 Eliminating compulsory child labor
 Avoiding workplace discrimination
 Protecting the natural environment
 Guarding against corruption
 Engaging in philanthropic activities
Sustainability
 A sustainable business simultaneously pursues 3 types of interests:
 Economic Interests
 Social Interests
 Environmental interests
Corporate Governance
 Corporate Governance provides means for organizations to achieve ethical behavior, CSR
and sustainability.
 Employees have to learn how to tackle ethical dilemmas that confronts firms
 In order to do that 5 standards have been devised to examine the problem
Corporate Governance
Improper ethical behavior results
 Top management set goals and incentives aimed at promoting good outcome that instead
lead to bad behavior
 Employee overlook unethical behavior in others because of peer pressure or self interest
 Manager tolerate lower ethical standards in value chain
 Unethical practices are allowed to accumulate in the firm slowly over the time
 Bad means are justified by good ends