Regionalisation and the Triad - Metropolia Ammattikorkeakoulu

Regionalisation and the Triad - Metropolia Ammattikorkeakoulu

Ethics and International Business Dr Fariba Darabi International Project Week 13th May 2014 Helsinki Metropolia University of Applied Science Aims Understand the concept of Ethic, and International Business Understanding ethical issues faced by international businesses

Identifying the causes of unethical behaviour by managers Discussing the value of ethical bahaviour Ethical considerations for managers What is Business Ethics? The term ethics means the accepted principles of right or that

govern the conduct of a person, the members of a profession, or the actions of an organisation (Hill and Hernandez-Requejo, 2013). Moral principles and values governing the behavior of people, firms, government (Cavusgil et al., 2012). Business Ethics are the accepted principles of right or wrong governing the conduct of businesspeople Ethics set the acceptable standards for distinguishing

between right and wrong. Ethical issues in International Many of ethical issuesBusiness in international business are rooted in different factors e.g. political systems, law, economic development, and culture vary from one nation to another nation One practice may be considered normal in one nation but unethical in another nation. Thus, managers in multinational firms needs to be aware of these differences Companies encounter ethical challenges in a range of international activities. - Global sourcing, the procurement of products/services from suppliers located abroad. e.g. sweatshops, long working hours for very low wages, working in harsh condition. - Marketing practices in advertising and selling to induce customers to buy. e.g. defective and harmful products or packaging

- Fake products such as medication through online marketing in developing economies; Phony Viagra Intellectual property (IP) Illicit use for intellectual property represents ethical violation in international business IP refers to ideas or work created by individuals or firms includes a variety of proprietary, and intangible assets (Cavusgil et al, 2013) Trademarks: are distinctive signs and indicator that firms use to identify their products and services. e.g.

E.g., British Petroleums BP acronym, McDonald's golden arches, and Nikes swoosh symbol. Copy rights: grant protections to the creators of art, music, books, software, movies, and TV shows. e.g. CD, DVD, Textbook. Patents: provide an inventor with the right to prevent others from using, selling or importing an invention for a fixed period typically, up to 20 years. It is granted to any firm or individual that invents or discovers any new and useful process, machine, manufactured product, or any new and useful improvement. International Trade Losses due to Copyright Piracy The most common ethical issues Employment practices in developing countries workforce exploitation; working hours, work conditions, and work pay.

e.g. Nike in Vietnam Human Rights freedom of speech, freedom of movement, freedom from political repression Environmental Pollution the use of toxic materials in the workplace IB pollution e.g. transportation Corruption

government officials e.g. Nigeria Corruption and Bribery: Corruption Perceptions Index Unethical Conduct in Nigeria The Halliburton Case and Corruption in Nigeria v=IhcmwcPf4PY Activity 1 Please find some one who has the same topic as yours. Discuss your understanding of the unethical behaviour Tutor will provide you with pen and flipchart Write down the result of your discussions on

a flip chart, present back your work to the class Ethical Dilemma what is ethical depends upon one's cultural perspective e.g. the practice of 'gift giving' between parties in business negotiation is a proper behaviour and right in Asian cultures while some Westerns view this as a form of bribery and unethical Child Labour Clothing industry; e.g. Primark Footwear; e.g. Nike

International Labour Organisation Regulations Children under 18 should be protected Strategic Responses to Ethical Challenges Reactive - do less than is required; Defensive - admit responsibility but do the least that is required; Accommodative - accept responsibility, do

all that is required; Proactive - Anticipate responsibility, do more than is required; The Determinants of Ethical Behaviour Persona l Ethics Societal Culture Decisionmaking processes Ethical

Behaviou r Organisationa l Culture Leadership Unrealistic performance expectations Hill and Hernandez Requejo (2013) Determinant of ethical behaviour Societal culture:

Personal ethics: Decision making process: Organisational culture: Unrealistic performance expectations:

Leadership: May have an impact on unethical behaviour. E.g. enterprises in a country such as Russia, with high score on masculinity and power distance measures, and where corruption is endemic, are more likely to engage in unethical behaviour than enterprises in Scandinavia The generally accepted principles of right and wrong governing the conduct of individuals. Managers might not consider the importance of ethical dimension in their decision making. E.g. Nike subcontracting production Refers to the Values and norms that are shared among employees of an organisation. e.g. profit driven organisation and purely economic decision making E.g. pressure from the parent company to meet unrealistic performance goal that can be attained by only cutting

corners or acting in an unethical manner leaders help to establish an ethical or en-ethical culture in the organisation that employees follow Linking Ethics, Corruption, and Responsible Behaviour The Pyramid of Ethical Behaviour (Cavusgil et. al, 2013) Activity 2 Case study discussion: 'Corruption at Siemens'

Discuss the answer to the questions set at the end of the case study

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