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International Business Chapters 5-8

Terms in this set (55)

Ethics
accepted principles of right or wrong that govern the conduct of a person, the members of a profession, and the actions of an organization
Business ethics
accepted principles of right or wrong governing the conduct of business people
Ethical strategy
a strategy, or course of action, that does not violate these accepted principles
1. employment practices
2. human rights
3. environmental pollution
4. corruption
5. moral obligations of multinational companies
5 most common ethical issues in business
Establish minimal acceptable standards that safeguard the basic rights and dignity of employees
What should firms do in regards to employment practices?
Tragedy of the commons
when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation
Social responsibility
the idea that managers should consider the social consequences of economic actions when making business decisions (there should be a presumption in favor of decisions that have both good economic and bad social consequences)
Ethical dilemmas
situations in which none of the available alternatives seems ethically acceptable (real-world decisions involve consequences and are difficult to quantify; not always clear cut)
1. personal ethics (driving car here vs. Europe)
2. decision-making processes (organizational culture)
3. unrealistic performance expectations (cutting corners)
4. leadership (setting example)
5. societal culture (set in individualism and uncertainty avoidance, but stressing ethical behavior where masculinity and power distance are ranked high)
5 reasons why managers behave unethically
1. Friedman doctrine
2. Cultural relativism
3. Righteous moralist
4. Naive immoralist
4 straw man approaches to ethics
Friedman doctrine
the only social responsibility of business is to increase profits, so long as the company stays in the rules of law
Cultural relativism
ethics are culturally determined and firms should adopt the ethics of the cultures in which they operate ("When in Rome do as the Romans do")
righteous moralist
a multinational's home country standards of ethics should be followed in foreign countries
Naive immoralist
if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either
Utilitarian ethics
the moral worth of actions or practices is determined by their consequences (actions must lead to the best possible balance of good consequences over bad ones; approach fails to consider justice)
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