Ethics
Value of ethical behaviour
Components of ethical behaviour
Corporations ensure that ethical behaviour transcends all international business activities, being promante in management decisions about financial performance and competitive advantage
Integrated strategic approach to ethical sustainable and socially responsible behaviour provides the firm with competitive advantages.
Advantages
Stronger relationships with customers
Stronger relationships with employees and shareholders
Stronger relationships with suppliers
Stronger relationships with the governments and local communities where they do business
Experienced executives understand that a culture of ethical behaviour is essential in achieving profit objects
Failure to protect and nature corporate image results in poor performance and potential ruin
Simply the right thing to do
Often a requirement within law and regulations - vilation can often have legal consequences
Customers, governments and the new media depand ethical behaviour, firms that comit ethical blunders attract unwanted attention
It is good business leading to enhanced corpoate image and selling prospects
High ethical standars repuation gains advnatges in hariing and monvating employees, parterting and dealing with forgien governments
Unethical Behaviour Before entering a country and throughout the life of the firm's operations - management must be alert to the various ethical challenges.
The firm should scan the country and potential partners for the possibility of ethical abuses and regard such scanning as an ongoing process.
Must be constantly vigilant about their current and potential activities.
Shouldn't be restricted to a specific environments but on the existing value-chain activities, which often take place in multiple countries.
Ethical challenges in international Business - Companies encounter ethical challenges in a range of international activities
Corruption - The practice of obtaining power, personal gain, or influence through illegitimate means and usually occurs at others' expense
Is the most extreme from of unethical behaviour
Corruption influences our political, social and economic environments
It diminishes trust in public institutions, undermines the rule of law, and challenges democratic principles
It stunts economic development by discouraging foreign FDI and hurts small business that lack means to pay up
More than 30% of MNEs believe corruption is a major concern in their activities worldwide
Political Corruption
In which officials abuse public power or profit improperly from government resources
Widespread corruption hinders economic development
MNEs avoid doing business with corrupt countries
Corruption harms the poorest in societies, those forced to pay bribes to gain access to needed products and services, such as water, electricity, and phone service
Bribery - widely practised around the world, is the most notable form of corruption in international business
$1 trillion in bribes is estimated to paid worldwide every year
To gain access to important markets and achieve business goals
Bribery is especially common in developing economies - nearly impossible to achieve important business objectives without paying bribes to public officials and other individuals
Indonesia
Nigeria
Egypt
Bribery is especially common in the global energy, mining, and telecommunications
Paying bribes increases the risk and costs of doing business
Bribery promotes a culture and practice of dishonesty and immorality that opens the door to other types of wrongdoing
Bribery threatens fundamental business principles of fair competition and merit-based selection, and even essential functioning of market economies
Unethical Management Practices - Are a significant factor at the level of individual firms, especially in countries that lack adequate regulation and professional standards
A corporate culture that advocates profit over sustainability and human welfare can lead to employee abuse, harmful procedures, and other unsustainable practices
Manages may harass employees over issues of sex, race, religion, or political affiliation
Harmful Global souring- Global sourcing is the procurement of products or services from suppliers located abroad
Illicit products and Marketing
Raises concerns about ensuring human rights and protecting the environment
Some companies operate illicit sweatshop factories in which employees are children or work long hours for very low wages, often in hash conditions.
Suppliers might operate factories that generate much pollution
Firms might market defective or harmful products or engage in unethical marketing practices
Flawed products or packaging can lead to disastrous outcomes for public health and safety or for natural environments
Example Millions of electronic products from cell phones to computers are discarded every year. - Products that could be recycled instead end up in landfills.
Excessive product packaging generates pollution and consumers energy and natural resources