26 Questions
What type of situations involve choosing between alternatives that do not seem ethically acceptable?
Ethical dilemmas
What factors can influence an expatriate's personal ethics while working abroad?
All of the above
What can lead to unethical behavior in decision making processes?
Overreliance on economic analysis
What is a key factor that influences business ethics?
Personal ethics
What are some of the ethical obligations of a multinational corporation?
All of the above
Why may expatriates be more likely to violate their personal ethics while working abroad?
They are geographically and psychologically distant from the parent company
What is cultural literacy in the context of international business?
An understanding of how cultural differences affect business practices
What are values in the context of culture?
Abstract ideas about what a group believes to be good, right, and desirable
What is social structure in the context of culture?
A society’s basic social organization
What is a characteristic of individualism in Western societies?
Focus on individual achievement and entrepreneurship
What is a characteristic of group-oriented societies in Asia?
Discouragement of job switching between firms
What is a consequence of individualism in the workplace?
Decreased job security and company-specific knowledge
What is a characteristic of norms in the context of culture?
Social rules and guidelines that prescribe appropriate behavior
What is the relationship between values and norms?
Values provide the context for norms
What is a characteristic of mores?
Norms that are seen as central to the functioning of a society
What is not characteristic of individualism?
Focus on group loyalty and cooperation
Which of the following is a key reason why cross-cultural literacy is critical for international businesses?
To successfully navigate another culture
How does a belief in ethnocentrism affect international business success?
It may lead to clashes and hinder success in foreign markets
What is the significance of the connection between culture and national competitive advantage?
It helps identify countries likely to produce strong competitors
What do business ethics refer to?
Principles of right or wrong guiding business conduct
Which ethical issue typically arises when environmental regulations in host nations are poorer than those in the home nation?
Environmental pollution
What is the tragedy of the commons related to in the context of international business ethics?
Exploitation of publicly owned resources without consequences
How is corruption perceived by some economists in countries with distorted market mechanisms?
As a driver of economic growth
Which set of actions is considered a violation of business ethics?
Giving bribes for business approvals
What is the role of social responsibility in business decisions?
To consider both economic and social outcomes
In the context of multinational corporations, why should employment practices be a concern?
To address disparities in host nation work conditions
Study Notes
Ethical Dilemmas
- Ethical dilemmas are situations where none of the available alternatives seem ethically acceptable
- Multinational corporations face ethical obligations regarding employment conditions, human rights, corruption, environmental pollution, and the use of power
Personal Ethics
- Personal ethics influence business ethics
- Expatriates may face pressure to violate their personal ethics due to being away from their ordinary social context and supporting culture
Decision Making Processes
- Unethical behavior can occur when individuals rely solely on economic analysis and fail to consider the ethical implications of their decisions
Culture and Ethics in International Business
- Successful international managers need cross-cultural literacy, an understanding of how cultural differences affect business practices
- A relationship exists between culture and the costs of doing business in a country or region
What Is Culture?
- Culture is a system of values and norms shared among a group of people
- Values are abstract ideas about what a group believes to be good, right, and desirable
- Norms are the social rules and guidelines that prescribe appropriate behavior in particular situations
Values and Norms
- Values provide the context for a society's norms
- Norms include folkways (routine conventions of everyday life) and mores (norms central to the functioning of a society)
Social Structure
- Social structure refers to a society's basic social organization
- Two dimensions to consider: the degree to which the basic unit of social organization is the individual or the group, and the degree to which a society is stratified into classes or castes
Individuals and Groups
- In many Western societies, the individual is the primary unit of social organization, which can contribute to dynamism and entrepreneurship
- In many Asian societies, the group is the primary unit of social organization, which can lead to cooperation and lifetime employment systems
Cross-Cultural Literacy
- Cross-cultural literacy is critical to the success of international businesses
- Companies that are ill-informed about cultural practices are unlikely to succeed in that culture
Culture and Competitive Advantage
- The connection between culture and competitive advantage is important because it suggests which countries are likely to produce the most viable competitors
- It has implications for the choice of countries in which to locate production facilities and do business
Ethics in International Business
- The most common ethical issues in business involve employment practices, human rights, environmental regulations, corruption, and the moral obligation of multinational companies
Employment Practices
- Companies should consider applying home country standards, host country standards, or something in between in terms of work conditions in host nations
Human Rights
- Basic human rights, such as freedom of association, freedom of speech, freedom of assembly, and freedom of movement, are taken for granted in developed countries but may not exist in other countries
Environmental Pollution
- Environmental regulations in host nations may be inferior to those in the home nation
- The tragedy of the commons occurs when a resource held in common by all, but owned by no one, is overused, resulting in its degradation
Corruption
- Corruption can take the form of blackmarketeering, smuggling, and side payments to government bureaucrats
- Economists have differing views on the impact of corruption on economic growth
Moral Obligations
- Social responsibility refers to considering the social consequences of economic actions when making business decisions
- Social responsibility can be supported for its own sake as the right way for a business to behave
Test your knowledge on the importance of cross-cultural literacy in the success of international businesses, as well as the connections between culture, national competitive advantage, and ethics in decision making. Learn how cultural awareness and understanding can impact managerial decisions and business outcomes.
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