international business, 5th edition

chapter 5
ethics and social
responsibility in
international
business
 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

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 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

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 Exporting Jobs or
Abusing People?

Minute Maid
Tropicana
Nestle
Nike

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 Ethics

Ethics is an individual's
personal beliefs
about whether a
decision, behavior, or action
is right or wrong.

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 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

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 Figure 5.1 Ethics in a
Cross-Cultural Context

Behavior of Behavior of
Organization Employees
Toward Employees Toward Organization

Cultural
Context

Behavior of Employees
and Organization
Toward Other Economic Agents
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 How Organizations Treat
Employees

Some businesses in
Africa have taken
steps to educate
their employees
about how AIDS is
contracted.

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 Acceptability of Bribery

Acceptable Unacceptable
Russia Australia
China Sweden
Taiwan Switzerland
South Korea Austria

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 Managing Ethical Behavior
Across Borders

Guidelines or codes

Ethics training

Organizational practices

Corporate culture

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 Corporate Social Responsibility

Corporate social responsibility is

the set of obligations an organization
undertakes to protect and enhance
the society in which it functions.

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 Areas of Social Responsibility

Organizational
stakeholders

Natural General social

environment welfare

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 Examples of Companies with a
Commitment to CSR

L.L. Bean Dell Computer

Toyota DaimlerChrysler
Lands End BP
3M Honda

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 Map 5.1 Social Responsibility
Hot Spots

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 Approaches to Social
Responsibility

Obstructionist

Defensive

Accommodative

Proactive

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 Figure 5.3 Approaches to
Social Responsibility

Least Most
Responsible Responsible

Obstructionist Defensive Accommodative Proactive

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 Obstructionist Stance

Do as little as possible to address

social or environmental problems
Deny or avoid responsibility
Examples
Astra
Nestle
Danone

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 Defensive Stance

Do what is required legally, but

nothing more
Corporate responsibility is to
generate profits
Example
Philip Morris

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 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

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 Proactive Stance

Strong support of social responsibility

Viewed as citizens of society
Seek opportunities to contribute
Examples
McDonalds
The Body Shop
Ben & Jerrys

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 Managing Compliance Formally

Legal compliance

Ethical compliance Philanthropic giving

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 Managing Compliance Informally

Leadership

Organizational
Whistle-blowing
culture

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 Evaluating Social Responsibility

A corporate social audit is a formal

and thorough analysis of the
effectiveness of the firms social
performance.

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 Steps in Corporate Social Audit

Define social goals

Analyze resources devoted

to each goal

Determine degree of
achievement for each goal

Make recommendations

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 Actors in
Policy Formulation Process

The state

The market Civil society

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 Regional Stereotypes

Anglo-Saxon
approach

Asian
approach

Continental
European approach

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 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)

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