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International Business Ethics Issues

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University of Waterloo
PHIL 215
Brian Orend

Tuesday, March 13, 2012 International Business Ethics Issues - A lot of countries around the world believe in bribes and gift giving while doing business (example: giving the other party money to begin business with them) Foreign Corrupt Practices Act: makes it illegal for a publicly listed company, to bribe any government official Almeder’s Argument of Bribery and Gift-Giving - Bribery and gift giving violates universality - Bribery and gift giving are an invitation to corrupt people’s moral character o Especially public officials, they have to make the best decision in the public interest o Inviting them to have a conflict of interest - Bribery and gift giving forces you to lie or falsify financial records to apply them - Controlling your costs  going down the road of bribery, you never have control of your costs o Almost never a one-time payment - Bribes and gifts that are too generous undermine your own competitiveness (on the price and quality of the good that you are offering for sale) o Takes your eyes off the prize o Short-term focus of favours - Bribes and gift giving are at odds with free-market capitalism in general o Often portrayed as the cost of doing business o Encouraging people to be irrational, personal, and subjective factors depending on how much they like the incentive o Almeder is FOR rational economic agency - Bad for your company’s reputation When doing international business… Whose values should you follow? YOUR OWN LOCAL CUSTOMS  You might disapprove of what the people in  Respecting local tradition that country do (child labour)  Don’t be arrogant  Garment industry (child labour): Asia, central  Don’t be provincial, close-minded, and and south America inexperienced  Save due diligence  Want the business ($$)  Consistent behaviour  “Sleep at night” knowing you did the right thing  Might lose the business because your actions might be seen as arrogant  You won’t violate laws back home Nestle Baby Formula Marketing Campaign - Biggest multinational corporation in the word agriculture & consumer products o Milk and chocolate - Late 70’s: developed world’s baby formula sales dropped (baby formula is mainly made up of ash) o So they decided to start selling to the developing world (new market for baby formula) o Created market segregation - How did they sell baby formula in the developing world? o Deception: they lied and said that the formula is better for their baby than breast milk with NO scientific data o Manipulation: told them this is what the mothers in the develop
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