Ethics and Social Responsibility in International Business PDF
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Summary
This document discusses ethics and social responsibility in international business. It covers different stances on social responsibility, along with general ethics, code of ethics, and implementing social responsibility. It also examines various theories related to international business.
Full Transcript
THICS AND SOCIAL RESPONSIBILITY IN E AREAS OF SOCIAL RESPONSIBILITY INTERNATIONAL BUSINESS Organizational Stakeholders Natural...
THICS AND SOCIAL RESPONSIBILITY IN E AREAS OF SOCIAL RESPONSIBILITY INTERNATIONAL BUSINESS Organizational Stakeholders Natural environment THICAL BEHAVIOR E General social welfare Usually refers to behavior that conforms to generally accepted social norms. ETHICAL GENERALIZATIONS Individuals have their own personal belief systems People from the same cultural context will tend to hold similar beliefs Behaviors can be rationalized Circumstances affect adherence to belief systems National culture is intertwined with ethics OBSTRUCTIONIST STANCE Obstructionist Stance Do as little as possible to address social or environmental problems Deny or avoid responsibility DEFENSIVE STANCE Do what is required legally but nothing more Corporate responsibility is to generate profits ACCOMMODATIVE STANCE Meet ethical and legal requirements Agree to participate in social programs Match contributions y employees Respond to requests from non-profits No proactive behavior to seek such opportunities PROACTIVE STANCE Strong support of social responsibility Viewed as citizens of society Seek opportunities to contribute ODE OF ETHICS C Written statements of the values and ethical standards that guide the firms action CCEPTABILITY OF BRIBERY A Acceptable Rusia China IMPLEMENTING SOCIAL RESPONSIBILITY Taiwan Legal Compliance South Korea Ethical Compliance Philanthropic Giving Unacceptable Australia INFORMAL DIMENSIONS OF SOCIAL Sweden RESPONSIBILITY Switzerland Leadership Austria Organizational culture Whistle blowing CORPORATE SOCIAL AUDIT LASSICAL COUNTRY-BASED TRADE C Tool for the evaluation of social THEORIES responsibility effectiveness Formal and thorough analysis EARLY COUNTRY-BASED THEORIES Conducted by task force Focused on the individual country Useful for describing trade in commodities Price is an important component of the customer’s purchase decision MODERN FIRM-BASED THEORIES Modern Firm-Based Theories Focus on the firm’s role in promoting international trade Useful in describing patterns of trade in differentiated goods Brand Name is an important component of the customer’s purchase decision MERCANTILISM Gold and Silver Increased Exports EGULATING INTERNATIONAL ETHICS AND R Reduced Imports SOCIAL RESPONSIBILITY Neomercantilistsor Protectionists Foreign Corrupt Practices Act (FCPA) Alien Tort Claims Act BSOLUTE ADVANTAGE A International Labor Organization (ILO) Adam Smithattacked the intellectual basis of Anti Bribery Convention of the Organization mercantilism for Economic Cooperation and Weakens a country Development Squanders a country’s resources Reduce a country’s wealth In Philippines Smith advocated free trade among countries B ureau of Internal Revenue Enlarges a country’s wealth Department of Trade and Industry Philippines INTERNATIONAL TRADE AND INVESTMENT RADE T Voluntary exchange of goods, services, assets, or money between one person or organization and another. INTERNATIONAL TRADE Trade between residents of two countries. Why Does International Trade Occur? mith developed the theory of absolute advantage, S Both parties to the transaction benefit which suggests that a country should export those Exports spark additional economic activity goods and services for which it is more productive Improve competitiveness than other countries are and import those goods and services for which other countries are more productive than it is. F rance has an absolute advantage in the FACTOR ENDOWMENTS production of wine Japan has an absolute advantage in the ECKSCHER-OHLIN THEORY H production of clock radios Pattern of Comparative Advantage Trade: Both will be better off Differences in relative factor endowments COMPARATIVE ADVANTAGE THEORY ACTOR ENDOWMENTS F avid Ricardostates that a country should D payments for the factors of production produce and export those goods and services for - factors of production; land, labor,capital which it is relatively more productive than other machineries [technology: others may be countries are. That same country should import hightech] those goods and services for which other countries - land - may vary per parcel of land owned are relatively more productive than it is. E xport products that use relatively abundant factorsof production. ELATIVE R In comparison with others. Import products that need relativelyscarce factorsof production. ELATIVE FACTOR ENDOWMENTS-LEONTIEF R PARADOX he difference between the two theories is subtle: T Smith’s theory looks at absolute productivity differences; Ricardo’s theory looks at relative productivity differences. The distinction occurs because comparative advantage considers the concept of: PPORTUNITY COST O The value of what is given up to get a good. icardo incorporates this concept into the R determination of what goods a country should MODERN FIRM-BASED TRADE THEORIES produce. THEORETICAL DEVELOPMENT Growing importance of MNCs in the postwar international economy Inability of the country-based theories to explain and predict the existence and growth of intra-industry trade INTRA-INDUSTRY business transaction within the same industry undifferentiated; diesel is same with across essons of the theory of comparative L gasoline business advantage: You are better off specializing in what you INTER-INDUSTRY do relatively best business transaction within different industry to Produce (and export) those goods and other; subdivided to different departments services you are relatively best able to ex. food industry; tourism to manufacturing produce Buy other goods and services from people F ailure of Leontief and other researchers to who are relatively better at producing them empirically validate Heckscher-Ohlin theory than you are VERNON’S PRODUCT LIFE CYCLE THEORY ORTER'S THEORY OF NATIONAL P COMPETITIVE ADVANTAGE Product Stage - Development iteracy Rate = Comprehensive Rate L - Intro Poor literacy rate in the Philippines results in a low - Growth competitive advantage. - Maturity (Jollibee; that's why it penetrate in Poor literacy in the Philippines results to poor different countries) production (mahirap turuan) - Decline ACTOR CONDITION F natural resources/land area/machineries affects the LINDER’S COUNTRY SIMILARITY THEORY competitive advantage of a country EMAND CONDITION D Demand willingness of the customer to buy a product on a certain amount igher demand in electronics and technological H products (luxury & convenience items) rather than the commodity of food. (90,000) RELATED AND SUPPORTING INDUSTRIES Provide Examples; Intra-industry upporting Industries S NEW TRADE THEORY industries who are into flour and sugar production (cake, pastries) Incorporates the impact of economies of scale on trade in differentiated goods nce this industry fall others will fall eventually; O DOMINO effect CONOMIESOF SCALE E maximizing your resources; buying bulk instead of FIRM STRUCTURE, STRATEGY, RIVALRY retail TRUCTURE S P redicts that intra industry trade will be Visualize through organizational charts. (matrix commonplace type, line type,) Obtaining a sustainable competitive advantage: he bigger the company, the more complex it T Owning Intellectual Property Rights becomes. Authority becomes overlapping. (copyright; song poem) (patent;invention) And it becomes complicated. (trademark: (registered) apple, nike, [name, symbols,]) NC are normally complex. M Both of them are franchises, butCoca-Colais Investing in Research and Development more on production and doesn’t allow franchises for Apple used this for continued development. every country whileMcdonaldsis more on service and allows and issues franchises for every country. A chieving Economies of Scope Exploiting the Experience Curve ou make use of the customer for your marketing Y activity. ummary of Major Theories of International S Trade verview of International Investment: Types of O International Investments oreign Portfolio Investments F collection of business in other/foreign country Ex. PNG, Johnson and Johnson's, oreign Direct Investments F actual investment located in the other country(City Bank, NLEX, SLEX, CAVITEX - investment of foreigners;Korean
