1. chapter 5 ethics and social responsibility in international business

2. 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 cross-cultural and international contexts 5-2

3. 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 5-3

4. Exporting Jobs or Abusing People? • Minute Maid • Tropicana • Nestle • Nike 5-4

5. Ethics Ethics is an individual's personal beliefs about whether a decision, behavior, or action is right or wrong. 5-5

6. 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 5-6

7. 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 5-7

8. How Organizations Treat Employees Some businesses in Africa have taken steps to educate their employees about how AIDS is contracted. 5-8

9. Acceptable Russia China Taiwan South Korea Unacceptable Australia Sweden Switzerland Austria Acceptability of Bribery 5-9

10. Managing Ethical Behavior Across Borders Guidelines or codes Ethics training Organizational practices Corporate culture 5-10

11. Corporate Social Responsibility Corporate social responsibility is the set of obligations an organization undertakes to protect and enhance the society in which it functions. 5-11

12. Areas of Social Responsibility Organizational stakeholders Natural environment General social welfare 5-12

13. L.L. Bean Toyota Lands’ End 3M Dell Computer DaimlerChrysler BP Honda Examples of Companies with a Commitment to CSR 5-13

14. Map 5.1 Social Responsibility Hot Spots 5-14

15. Approaches to Social Responsibility Obstructionist Defensive Accommodative Proactive 5-15

16. Figure 5.3 Approaches to Social Responsibility Most Responsible Least Responsible Obstructionist Defensive Accommodative Proactive 5-16

17. Obstructionist Stance • Do as little as possible to address social or environmental problems • Deny or avoid responsibility • Examples • Astra • Nestle • Danone 5-17

18. Defensive Stance • Do what is required legally, but nothing more • Corporate responsibility is to generate profits • Example • Philip Morris 5-18

19. 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 5-19

20. Proactive Stance • Strong support of social responsibility • Viewed as citizens of society • Seek opportunities to contribute • Examples • McDonald’s • The Body Shop • Ben & Jerry’s 5-20

21. Managing Compliance Formally Legal compliance Ethical compliance Philanthropic giving 5-21

22. Managing Compliance Informally Leadership Organizational culture Whistle-blowing 5-22

23. Evaluating Social Responsibility A corporate social audit is a formal and thorough analysis of the effectiveness of the firm’s social performance. 5-23

24. Steps in Corporate Social Audit Define social goals Analyze resources devoted to each goal Determine degree of achievement for each goal Make recommendations 5-24

25. Actors in Policy Formulation Process The state The market Civil society 5-25

26. Regional Stereotypes Anglo-Saxon approach Asian approach Continental European approach 5-26

27. 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) 5-27