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Ethics and Social Responsibility in International Business

This chapter explores the nature of ethics, discusses ethics in cross-cultural and international contexts, and identifies key elements in managing ethical behavior across borders. It also delves into social responsibility in cross-cultural and international contexts, including the basic areas of social responsibility, how organizations manage it, and the key regulations governing ethics and social responsibility. Case studies and examples are provided to illustrate these concepts.

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Ethics and Social Responsibility in International Business

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  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

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