MGMT1101 Lecture Notes - Lecture 11: Corporate Social Responsibility, Drug Lord, Business Ethics
19 May 2018
School
Department
Course
Professor
Verren Jesilia
Page | 1
Week 11 – Corporate Responsibility for International Business
Business ethics: Accepted principles of right/wrong governing the conduct of business people
- What is considered right in one country can be wrong in another
Corporate social responsibility: The preference to positive social consequences when making
business decisions
Ethical issues in International Business:
- Employment Practices
➢ Working conditions in a host nation differ from home nation
➢ E.g. Minimum pay rate, Working hours, Safety
- Human rights
➢ Basic human rights are still not respected in many nations
➢ Freedom of speech, association, assembly, movement, political repressions etc.
➢ Etc. North Korea, South Africa (Zimbabwe)
- Environmental Pollution
➢ Emission of pollutants, dumping of toxic chemicals, use of toxic materials in workplaces
➢ E.g. Gulf of Mexico – Deepwater Horizon spill (2012), $4.36b fined
➢ Legal actions and regulations lacking in developing nations
- Bribery and corruption
➢ Corrupted officials (e.g. China, Indonesia)
➢ IB can and have gained economic advantages by making payments to corrupt officials
1. Facilitating payments: payments made to foreign officials to ensure that there is no
obstruction to the transaction
2. Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions: Convention obliging member states to make bribery of foreign public
officials a criminal offense
3. Bribery Act: Aus Legislation outlawing payment of bribes to foreign govt officials in
order to gain business
4. Moral obligations/Corporate Social Responsibility – Multinational corporations have
power that comes from their control over resources and ability to move production
from one country to another.
• Social Responsibility: Idea that business people should consider social
consequences of economic actions & give preference to outcomes with
positive social and economic consequences when making business decisions
• Noblesse Oblige: Honourable and benevolent behaviour considered the
responsibility of people of high (noble) birth; privilege engenders
responsibility
5. Ethical Dilemmas: A situation in which none of the available alternatives seems
ethically acceptable
• Child Labour – e.g. India
• Drug lord protection
• Bribery
• Overseas Investment
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Week 11 corporate responsibility for international business. Business ethics: accepted principles of right/wrong governing the conduct of business people. What is considered right in one country can be wrong in another. Corporate social responsibility: the preference to positive social consequences when making business decisions. Working conditions in a host nation differ from home nation. Basic human rights are still not respected in many nations. Freedom of speech, association, assembly, movement, political repressions etc. Emission of pollutants, dumping of toxic chemicals, use of toxic materials in workplaces. Gulf of mexico deepwater horizon spill (2012), . 36b fined. Legal actions and regulations lacking in developing nations. Personal ethics: the generally accepted principles of right and wrong governing the conduct of individuals. Organisation culture: norms and value systems that are shared among employees of an organisation. Belief that ethics are nothing more than a reflection of a culture and that firms should simply adopt the ethics of the culture in which they operate.
