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Chapter 10 - Global Business Ethics and Social Responsiblity

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Jagdeep Bal

on 6 December 2014

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Transcript of Chapter 10 - Global Business Ethics and Social Responsiblity

Chapter 10 – Global Business Ethics and Social Responsibility
design by Dóri Sirály for Prezi
-- Understanding Business Ethics and Social Responsibility

-- Ethical Issues Affecting Business Conduct of International Business

-- Taking Action,Ethically

Ethics is based on ideas of what is morally good and bad in behavior.
Business Ethics are focused on the behavior of the business and the way they treat:
-Stock Holders
Environmental issues, social responsibility and human responsibilities are policies that large organizations determined their business ethics.
Other International and Multinational Corporations have their own ethical positions, this is due problems related to the value system and laws of the countries in which they operate.

Ethics, Business and the Law:
Code of Ethics is used by organizations and companies to represent their acceptable and unacceptable principals.
Morality is based on intentions, decisions and actions which dictate whether it was a good or bad behavior.
Rule of Law is defined as the renewal and additions to the law. It is the law that humans are expected to follow.
The Canadian Charter of Rights and Freedoms is a Canadian legal system that keeps expanding year after year to hold up all these values.
Many different business can publish their own codes of ethics.
Ethical Dilemma is when two or more "right" decisions can be made for the same problem.
Ethics can help contribute to managing a businesses reputation, which helps avoid conflicts that can occur.
Some businesses even train employees to clarify what is acceptable and unacceptable in behavior and they learn how to apply the code of ethics into their work.

Chapter 10
Multinational Companies have an extensive international presence, controlling production, distribution, services, or other facilities outside the country
10.3 – Taking Action, Ethically--The Multinational Challenge
Chapter 10.1
Societal Issues
clean air, water, & soil are necessary for human and animal life
global warming is a main concern
proper storage of hazardous materials such as nuclear waste and possible wholesale export of Canada's fresh water to other countries
Ex. some countries have a real need for water, but it's unethical to ship water outside Canada because it could jeopardize the country's physical environment
10.2 continued..
Coltan (columbite-tantalum)--produces a metal powder called “tantalum” which is a key component in cell phones—also very expensive

Democratic Republic of Congo---operators had brutally exploited their workers – destroying land/rain forests, endangering local wildlife species and using the profits to finance a long-standing civil war

suppliers -- “conflict-free” coltan
Real Life Example #3
Coltan, Conflict, and Cell Phones
The Multinational Challenge
Some challenges faced....

the governmental and foreign exchange regulations and restrictions
the risk if a contracts broken----therefore no legal recourse
must work out all the following necessities labour, resources, and shipping costs if they produce things (products/goods) in foreign countries
10.2: Ethical Issues Affecting the Conduct of International Business
When a Canadian company does business internationally, it must deal with ethical issues related to its different stakeholders.............
The Host Country & Its Society
Investors or Stockholders
Employee Issues
Workplace Health and Safety

-employers must ensure safe work practices for their employees
Equality Issues

-role of women and minorities in society/workplace
-treatment of individuals
Cultural Relativism and Ethical Imperialism:
When you are in a foreign country it is expected that you follow the laws and codes of that country.
Ethical imperialism is when a individual, business or country tries to impose its ethical standards on another business or country.
Cultural relativism is when a country has the right to manage its affairs through its own values and the businesses will not try to change the countries ethics or laws.

Corporate Social Responsibility:
Stakeholders are people or groups that are affected by the performance of the businesses.
Social responsibility is promoted through many of today's business leaders.
Companies want high financial expectations to be able to satisfy their shareholders. If a company does not satisfy their shareholders then the business will most likely fall apart.
Corporate social responsibility (CSR) is a corporations standard and practice, which regards to:
-Human rights
-Human resources
-Community relations
When a company takes leadership in social responsibility and social initiatives it demonstrates proactive strategies.
Social Marketing (Cause Marketing) is a form of promotion which is recognized in the company.
Although businesses are taking social responsibility and making changes in ethical issues their are still other companies that are avoiding social demands and are only focused on making a profit.
Real Life Example #1
Attitudes Towards Smoking
Smoking in different jurisdictions can demonstrate the differences between Cultural realtivism and ethical imperialism.
In nemurous countries, goverment regulations and company policies can allow smoking to happen in public spaces and work places.
Although in North America many establishements have banned smoking.
It has been proven that secound hand smoke is hazardas to your health.
Smoking is a personal choice but it is not illegal.
However it is an unacceptable practice to smoke in workplaces, schools and public places.
In other countries it is acceptable to smoke anywhere., regardless of the health hazard to others.
Consumer Issues
product safety standards
quality control is sometimes difficult to maintain in products that are manufactured in international settings
Ex. Bridgestone/Firestone August 2000 recall of 6.5 million tires in the US following consumer complaints about defective tires on Ford Explorer sport utility vehicles
Stockholder Issues
owners of a corporation --> right to earn fair dividends based on the company's performance
--> right to vote on company policies
--> right to expect that company managers will act in their interests
Ex. Fall of Enron
in 2000, Enron had $20 billion USD in assets and $1 billion in USD in revenue
by 2002, Enron was bankrupt
Investements, pensions of Enron and thousands of jobs were lost
Voluntary Codes and Legislated Codes:
The Voluntary code of conduct is presented in voluntary initiatives, guidelines and non- regulatory agreements.
Voluntary codes are commitments made by the businesses, which benefits them for the sake of their communities.
Unlike a voluntary code, a legislated code is a law. There are numerous Canadian government agencies that ensure the legislated codes are followed. A business that fails to follow the legislated code is marked as an non-compliant and may face legal sanctions.
Human Rights Issues

-heavy government control, no independent trade unions, no free pass, no religious freedoms
Labour Issues

-Example: South Korea- Daewoo Motor Company

Consumer Activism
Consumer Activism
- actions taken by consumers
For example:
Students Against Sweatshops proposed a number of strategies to hold international companies accountable and to end the exploitation of workers
Non-governmental organizations
or nonprofit organizations
that work to bring about positive or necessary change through meetings and discussions
Full transcript