Chapter Eight Ethical Issues in International Business

1. Chapter EightEthical Issues in International Business Ethical Theory and Business, 6th Edition Tom L. Beauchamp & Norman E. Bowie

2. Objectives • After studying this chapter the student should be able to: • Describe problems encountered by multinational corporations when conducting business with other countries. • Contrast the transcendental normative environment and the group normative environment. • Analyze the ethical issues of the Japanese business community.

3. Objectives • Discuss the concept of reciprocity as it applies to the Chinese culture. • Explain the guidelines for conducting business with Chinese businesspeople. • Contrast gift giving, bribery, and corruption. • Define the term sweatshop. • Discuss the development of the campus anti-sweatshop movement. • Discuss possible standards for appropriate wages and labor standards in international sweatshops.

4. Objectives • Discuss the potential economic problems that may occur if current sweatshop practices are changed.

5. Overview • Multinational Corporations • Bribery • Sweatshops

6. Multinational Corporations

7. Norman Bowie • “Relativism and the Moral Obligations of Multinational Corporations” • General multinational corporation obligations • Distinctive obligations • Relativism • Morality of the marketplace

8. Daryl Koehn • “What Can Eastern Philosophy Teach Us About Business Ethics?” • Cullen Chair of Business Ethics, University of St. Thomas in Houston • Do Asian values exist? • Watsuji Tetsuro and Confucius • Meaning of trust • Relations are for life • Ethics beyond rights

9. Iwao Taka • “Business Ethics: A Japanese View” • Religious dimension • Transcendental normative environment • Numen – Soul, spirit, or spiritual energy. • Transcendentalism – The philosophy that every phenomenon is an expression of the great life force and is ultimately connected with the numen of the universe. • Japanese meaning of work • Group normative environment

10. Iwao Taka • Living between the group and individual environments • Social dimension • Concentric circles of corporations • Family, fellows, Japan, and world • Dynamics of the concentric circles • The individuals • The contextuals • Group environment and concentric circles

11. Iwao Taka • Japanese recognition of the American business community • Job description and the transcendental logic • Employees’ interest and the group logic • Claims against the Japanese market and the concentric circles’ ethics

12. Iwao Taka • Ethical Issues of the Japanese business community • Discrimination and transcendental logic • Transcendental logic has favored the male society. • Transcendental logic has been used to accuse certain workers of laziness. • Employees’ dependency and the group logic • Exclusiveness of the concentric circles

13. Patricia H. Werhane • “Exporting Mental Models: Global Capitalism in the Twenty-First Century” • Ruffin Professor of Business Ethics, University of Virginia • Mental models - The mechanisms whereby humans are able to generate descriptions of system purpose and form; explanations of system functioning and observed system states; and predictions of future system states.

14. Patricia H. Werhane • This article examines the possibilities of using an American free enterprise capitalist model for conducting business in a global arena.

15. Bribery

16. P. Steidlmeier • “Gift Giving, Bribery, and Corruption: Ethical Management of Business Relationships in China” • Associate Professor School of Management, Binghamton University • Developing a cultural framework for reciprocity • Artifacts • Social knowledge • Cultural logic

17. P. Steidlmeier • Interacting with others in China • Moral analysis of reciprocity • Guidelines for doing business right in China • Investigate the backgrounds of local executives you place in charge of company matters. • Ensure no one individual has total control over company matters. • Treat remarks such as “China is different” and “You shouldn’t get involved” as red flags.

18. P. Steidlmeier • Establish regular and detailed auditing systems to ensure transparency. • Be aware of the political standing of your counterparts and do not get caught in the cross fire of Chinese power struggles. • Explain your difficulties to the Chinese side and offer alternatives that are legitimate. • As much as possible, use Chinese sources themselves as the basis for your unwillingness to do corrupt deals.

19. P. Steidlmeier • Rather than becoming entangled in a specific minor bribe, place the whole matter in a broader context of negotiation.

20. Thomas Donaldson and Thomas W. Dunfee • “When Ethics Travel: The Promise and Peril of Global Business Ethics” • ISCT Core norms • Hypernorms • Consistent norms • Moral free space • Illegitimate norms • Navigating the ISCT map

21. Sweatshops

22. Richard Applebaum and Peter Dreier • “The Campus Anti-Sweatshop Movement” • The global sweatshop • Sweatshop – A process where profits are sweated out of workers by forcing them to work longer and faster. • Kathie Lee • Robert Reich

23. Richard Applebaum and Peter Dreier • A “sweat-free” campus • Began at Duke University, Fall 1997 • Required manufacturers of items with the Duke label to sign a pledge that they would not use sweatshop labor • Quickly spread to other U.S. universities/colleges • United Students Against Sweatshops (USAS) formed Summer 1998 • The industry’s new clothes

24. Ian Maitland • “The Great Non-Debate Over International Sweatshops” • Carlson School of Management, University of Minnesota • International sweatshop labor standards • Home-country standard • Living wage standard • Classical liberal standard

25. Ian Maitland • Charges against sweatshops • Unconscionable wages • Immiserization thesis • Widening gap between rich and poor • Collusion with repressive regimes • Labor standards in international sweatshops: painful tradeoffs