1 / 14

Doing Business Globally

Doing Business Globally. Major Ethical Problems: Foreign[host] values, culture, practices , laws, bribery[lubricating fees, facilitating ] Fundamental Rights & Guidelines[both in host and home country]. Doing Business Globally. Major Ethical Problems:

helmut
Download Presentation

Doing Business Globally

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Doing Business Globally Major Ethical Problems: • Foreign[host] values, culture, practices, laws, bribery[lubricating fees, facilitating ] • Fundamental Rights & Guidelines[both in host and home country]

  2. Doing Business Globally Major Ethical Problems: • Foreign[host] values, culture and practices differ from parent[home], • consumer and capital marketplaces: • Bribery, facilitating payments • Treatment of workers, environment • Foreign laws are different from domestic laws, stronger or weakerornon-existent • Autonomy of distant operations may weaken understanding or observance of company policies • Impact of multinational onlocal markets

  3. Global or Local? What/who should determine practices? Management … parent or local Local laws or domestic (parent) Shareholders or primary stakeholders Laws or stakeholder interests Fundamental human rights

  4. Market economy…or moral economy? Success = f(Trust +Respect/Reputation) Trustworthiness & Reputation come from culture, religion, values & political economy … a sort of Moral Economy Management effectiveness depends on understanding local values (culture) In foreign cultures T + Re = ƒ(Mgt. of Conflicts of interest & Risk)

  5. CULTURAL DIFFERENCES… SphereBasis of Value-system N. AmericaRights-based: rights, justice, utility Sino-Confucian Duty-based: obligation to family Japan Duty-based: obligation to company Middle East Duty-based: obligation to rescuer Europe , Personal rights S. America & other Impact On….Dealing with people…hiring, gender; bribery; motivation for doing business; short- or long-term time horizons; importance of quality-of-life issues

  6. Multinationals Can Influence • Labor rates, supply and practices • Rate busting • Treatment of women, children, minorities • Input markets • Finance markets • Product markets • Political decisions

  7. Conflicts of Interest/Bribery • Bribes, Facilitating payments, Kickbacks • Conflict of Interest • Foreign Corrupt Practices Act (US) • History, fines, disclosure • Transparency International • Corruption perception index-country rating • Website: www.transparency.de • OECD initiative - April 1998 • Corp. statements of policy…moral imagination

  8. Donaldson…Fundamental International Rights Freedom of physical movement Ownership of property Freedom from torture Nondiscriminatory treatment Freedom of speech & association Tom Donaldson,The Ethics of International Business, Oxford University Press, 1989,81 Fair trial Physical security Minimal education Political participation Subsistence Minimal Behaviour

  9. Product Decisions Should a product/input ruled/known to be harmful at home be sold/used abroad? (Corn in chips) Should a product be recalled overseas, but not at home? (Firestone tires on Ford Explorers) Should a product harmful to a culture be sold? (Nestle) Should a product be made which involves questionable practices with animals? (Pate)

  10. Pricing Decisions • Predatory pricing • Dumping • Gouging • Set to minimize/avoid tax • Transfer Pricing

  11. Questions To Be Considered • Does a business owe any loyalty to: • Foreign workers during a downsizing? • Host locales? • Should codes of conduct be tailored to each country of operations? • Should procedures for evaluation ethical behaviour vary by country? • Are there general operating guidelines that can be followed by multinationals?

  12. De George...Guidelines For Multinationals Do no intentional direct harm Produce more good than harm for host country Help the host country’s development Respect human rights of their employees Provided local culture does not violate ethical norms, respect & work with ethical culture Pay their fair share of taxes Cooperate with local government in developing & enforcing just background institutions Richard T. De George, Competing with Integrity in International Business, Oxford University Press, 1993, 45-56.

  13. Ethical Tests For International Activities…Brooks , Donaldson & DeGeorge • Does the practice violate: • company code, • guidelines for multinationals? • a fundamental international right? • Principles: Sullivan; Crux; Int’l. Code for Can. Bus. • international agreements, laws or codes? • Can business be conducted in the host country without the practice? • Is it permissible: at home? in consumer markets? in capital markets? Thomas Donaldson, HBR, September-October, 1996, 48-62.

  14. Global Business Ethics Value Chain STAKEHOLDER SCREEN ACHEIVEMENT OF STRATEGIC OBJECTIVES CORPORATION GO Customers Employees Capital Markets Current: Shareholders Lenders Environmentalists Host Communities Governments NGOs INFLUENCES Governance Mechanism ACTIONS Primary CAUTION Formulation of Strategic Objectives Other BEHAVIOUR STOP DETERMINANTS OF VALUE…Success = f(Trust + Respect) CORPORATE CULTURE ETHICS PROGRAM &CODE TOP MANAGEMENT SUPPORT STAKEHOLDER SYNERGIES CHARACTER GLOBAL MEDIA PERCEPTION OF: TRUST RESPECT RELATIVE IMPACT RELATIVE SALIENCE LOCAL CULTURE

More Related