Podcast
Questions and Answers
What ethical challenge may arise when businesses expand into other countries?
What ethical challenge may arise when businesses expand into other countries?
What is a key consideration for businesses when dealing with ethical relativism globally?
What is a key consideration for businesses when dealing with ethical relativism globally?
What is one of the primary challenges in developing a global code of ethics?
What is one of the primary challenges in developing a global code of ethics?
What initiative outlines guidelines for ethical business practices on a global scale?
What initiative outlines guidelines for ethical business practices on a global scale?
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What is a significance of the OECD Guidelines for multinational enterprises?
What is a significance of the OECD Guidelines for multinational enterprises?
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What is one responsibility of businesses regarding environmental practices?
What is one responsibility of businesses regarding environmental practices?
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Which principle is included in both the UN Global Compact and OECD guidelines?
Which principle is included in both the UN Global Compact and OECD guidelines?
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How is the credibility of the OECD guidelines enhanced?
How is the credibility of the OECD guidelines enhanced?
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What distinguishes the OECD guidelines from legally binding regulations?
What distinguishes the OECD guidelines from legally binding regulations?
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What is a main goal of the UN Global Compact for multinational companies?
What is a main goal of the UN Global Compact for multinational companies?
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Which of the following is NOT one of the ten chapters of the OECD guidelines?
Which of the following is NOT one of the ten chapters of the OECD guidelines?
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What type of approach does the OECD take regarding issues related to business ethics?
What type of approach does the OECD take regarding issues related to business ethics?
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What demographic is primarily involved in the Global Compact initiative?
What demographic is primarily involved in the Global Compact initiative?
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What characterizes a multinational corporation (MNC)?
What characterizes a multinational corporation (MNC)?
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What is a potential risk of the 'safety in numbers' approach to ethical decision making?
What is a potential risk of the 'safety in numbers' approach to ethical decision making?
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What challenge do multinational corporations face in less developed nations regarding ethical practices?
What challenge do multinational corporations face in less developed nations regarding ethical practices?
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Which is an argument against globalization?
Which is an argument against globalization?
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What does ethical relativism allow for in terms of ethical principles?
What does ethical relativism allow for in terms of ethical principles?
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In what way might an MNC choose to act in less developed countries when faced with ethical dilemmas?
In what way might an MNC choose to act in less developed countries when faced with ethical dilemmas?
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What is a significant advantage of globalization for developing countries?
What is a significant advantage of globalization for developing countries?
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Which of the following best describes the 'dark side' of capitalism as mentioned in the context of globalization?
Which of the following best describes the 'dark side' of capitalism as mentioned in the context of globalization?
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What does the principle of voluntary character emphasize in global ethics?
What does the principle of voluntary character emphasize in global ethics?
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Which of the following is specifically recommended under the general policies section?
Which of the following is specifically recommended under the general policies section?
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What is encouraged regarding environmental practices?
What is encouraged regarding environmental practices?
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What major issue in employment and industrial relations is addressed?
What major issue in employment and industrial relations is addressed?
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How does OECD recommend businesses should handle consumer interests?
How does OECD recommend businesses should handle consumer interests?
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What aspect of competition does OECD promote for businesses?
What aspect of competition does OECD promote for businesses?
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What do businesses need to disclose according to the OECD guidelines?
What do businesses need to disclose according to the OECD guidelines?
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What is emphasized in the combating bribery section of the OECD guidelines?
What is emphasized in the combating bribery section of the OECD guidelines?
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What is a primary argument in favor of globalization?
What is a primary argument in favor of globalization?
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What do the OECD Guidelines aim to promote?
What do the OECD Guidelines aim to promote?
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Which of the following is NOT one of Richard DeGeorge's guidelines for multinationals?
Which of the following is NOT one of Richard DeGeorge's guidelines for multinationals?
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Which organization is noted for the UN Global Compact initiative?
Which organization is noted for the UN Global Compact initiative?
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Who played a key role in promoting global ethics within organizations?
Who played a key role in promoting global ethics within organizations?
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What is a major criticism of globalization?
What is a major criticism of globalization?
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What aspect of multinational corporations does Richard DeGeorge emphasize for ethical responsibility?
What aspect of multinational corporations does Richard DeGeorge emphasize for ethical responsibility?
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What is a primary challenge of globalisation concerning ethical standards?
What is a primary challenge of globalisation concerning ethical standards?
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Which principle is a focus of the UN Global Compact?
Which principle is a focus of the UN Global Compact?
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Why is business ethics easier to understand in a domestic environment compared to a global context?
Why is business ethics easier to understand in a domestic environment compared to a global context?
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What is expected of multinational corporations (MNCs) regarding ethics when operating in host countries?
What is expected of multinational corporations (MNCs) regarding ethics when operating in host countries?
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What misconception is often held by businesses expanding into new markets?
What misconception is often held by businesses expanding into new markets?
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How do economic disparities impact the ethical considerations in business transactions?
How do economic disparities impact the ethical considerations in business transactions?
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What major factor complicates business operations in a global environment?
What major factor complicates business operations in a global environment?
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What should multinational corporations do to adapt their ethical practices in foreign markets?
What should multinational corporations do to adapt their ethical practices in foreign markets?
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In the context of globalisation, what is crucial for businesses when they operate internationally?
In the context of globalisation, what is crucial for businesses when they operate internationally?
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Study Notes
Learning Objectives
- Understand ethical issues in global business
- Compare ethical challenges in developed and developing nations
- Explain ethical relativism in a global context
- Explain challenges in developing a global code of ethics (including DeGeorge guidelines)
- Analyze ramifications of the UN Global Compact
- Explain OECD Guidelines for multinational enterprises
Introduction
- Expanding firms face ethical issues doing business with foreign customers/firms.
- Companies often want to apply their own ethical standards universally, but other countries have different moral standards and ethical principles.
- This creates differences in culture, language, and moral standards.
- Conflicts can arise in ethical standards.
Ethics and Globalization
- Businesses expanding globally face new ethical considerations.
- Businesses may be accustomed to their own culture and practices, but these may not be appropriate globally.
- Globalization is the expansion of international trade leading to a global market.
Challenge of Globalization
- Enforcing a company's culture as the universal standard of ethics vs. firms and customers in other countries having their own moral standards and ethical principles.
Ethics and Globalization (continued)
- Business ethics in domestic environments are clearer and more straightforward.
- Ethical considerations become more challenging when crossing borders.
Ethics and Globalization (continued)
- When operating internationally, adherence to the host country's ethical principles and policies is expected.
- Redefining company code of ethics.
- Multinational corporations are expected to adopt global ethical standards and responsibility towards host countries.
Ethics and Globalization (continued)
- The debate on business ethics considers different standards for developed and less-developed nations.
- Business transactions differ in languages and cultures.
- Assumptions that "what works here works there" are often incorrect.
Expanding into new Markets
- Multinational corporation (MNC) definition: Companies operating in multiple countries.
- MNCs have headquarters in one country and conduct business across multiple countries.
- MNCs often have productive activities in more countries.
- Common examples of MNCs: Nike, Reebok, VW
Ethical Relativism
- Ethical relativism is based on individual opinions, traditions of society, and circumstances.
- It emphasizes flexibility in ethical standards rather than rigid rules.
- A safety in numbers approach considers the comfort of being part of the ethical majority, but there is risk of bowing to peer pressure.
- Decisions driven by local circumstances.
Ethical Relativism (continued)
- Policies and procedures can be challenging in less-developed nations since those nations often do not have comparable policies to foreign firms.
- MNCs often face tough decisions about whether to adhere to Western ethical principles or adapt to local practices, potentially including bribery and corruption.
Ethics and Globalization (arguments)
- Arguments for globalization improve wealth and living standards, provide access to resources, and reduce costs in less-developed nations.
- Arguments against globalization highlight the exploitation of developing countries, cheap labor, and lack of concern for economic viability of those nations.
Enforcing Global Ethics (UN Global Compact)
- The UN Global Compact is a voluntary initiative committed to promoting good corporate citizenship.
- Initiatives were launched in January 1999 and became operational in July 2000.
- Areas of concern include: human rights, labor standards, environment, and anticorruption.
Enforcing Global Ethics (UN Global Compact) (Continued)
- The 10 key principles of the UN Global Compact (not listed in the slides): businesses should respect human rights, have no complicity in abuses, uphold freedom of association, eliminate forced labor and child labor, eliminate discrimination, support a precautionary approach to environmental changes, promote responsibility, encourage development and diffusion of environmentally friendly technologies, work against corruption.
Enforcing Global Ethics (OECD)
- The OECD Guidelines are a governmental initiative that promotes ethical conduct.
- It provides principles and standards of behavior with more credibility than voluntary standards.
- However, guidelines for OECD are not legally binding.
Enforcing Global Ethics (OECD) (Continued)
- Covers 10 chapters including: Concepts and Principles, General Policies, Disclosure, Employment relations, Environment, Combating bribery, Consumer Interests, Science and Technology, Competition, and Taxation.
OECD (Continued)
- The OECD has ten chapters outlining the guidelines.
- The guidelines aim to provide principles that form the basis for voluntary conduct and Worldwide application.
- Reflect good practices for all enterprises.
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Description
This quiz explores the various ethical issues encountered by firms as they expand globally. Participants will analyze the differences in ethical standards across developed and developing nations, and understand the challenges of forming a universal code of ethics. Key concepts include ethical relativism, the UN Global Compact, and OECD guidelines for multinational enterprises.