Mtkm 5013 Global Social Responsibility

Countrywide & The Mortgage Industry Crisis Global Warming Martha Stewart & Enron De Beers & Diamond Mining Sweat Shops Employment of Illegal Aliens / Foreign

Workers

Ethics Global Social Responsibility Human Rights & Corruption Promoting Ethics in Transnational Companies

Oxford Definition Ethics | plural noun 1. [usu. treated as pl.] moral principles that govern a person’s or group’s behavior : JudeoChristian ethics. • the moral correctness of specified conduct : the ethics of euthanasia. 2. [usu. treated as sing.] the branch of knowledge that deals with moral principles.

Standards of Right & Wrong Establishing a standard of conduct, belief

values, and sensitivity.

Guidelines for making decisions that effect

employees, the organization, consumers, and other parties. The importance of managerial ethics

increases in proportion to the importance of the outcome.

Behavior that focuses on supposed short term

advantages without considering mid- and long-term consequences.

12% of Brazil’s Amazon charcoal works still

use slave labor despite ban by Citizen’s Coal Institute (regional industry watchdog since 2004) 1,500 charcoal works operate in this region 316 charcoal works shut down due to infractions U.S. buyers concerned about doing business with unethical charcoal works – ethics perception.

Social Economic Human Asset

Transnational Firm Viewpoint Actively solve host-country problems Simply doing business is addressing local

social, human asset, and economic problems Earn a profit

Internal Beneficiaries Employees Customers Owners

External Beneficiaries Special-interest groups Racial and ethnic minorities Women Handicapped Aged Groups that succeed in having laws made Equal Employment Opportunity Affirmative Action

General External Beneficiaries Solve or prevent general social problems Stakeholder management devices Ethics committees Public Affairs Office Code of Ethics Corporate Sponsorship Employee Newsletters

Global Social Responsibility

Basic standards of treatment for all people,

regardless of :

Religion Economic status

Gend er

Race

Nationality

Forced labor and inhumane working

conditions are examples of human rights violations Companies implement policies and programs to avoid violations and are regulated by global groups, such as Amnesty International

No longer acceptable International and national laws governing corruption, bribery, and fraud are becoming increasingly pervasive

Why should a transnational company consider

ethics? 1. Combat human rights violations 2. Good ethics is good business

Good ethics is good business Ethical standards can be considered an asset Special efforts and cost

Reputation

• Investing in ethical behavior may yield short term profit loss • Unethical behavior results in public outcry, legal action, and extended loss of profits • Investment may be balanced-out by a gain in reputation • Reputation of a company is one of the most valuable assets even if not in the balance sheet

How does a transnational company promote

ethics? No one successful approach Ethics most effective when a part of a company’s culture

Successful Strategies for Promoting Ethics

No universal set of standards Situation Country Context Review and consider each host country

separately

Ethics Standards of right and wrong

Social Responsibility Social, economic, and ethical decision making Human Rights Basic standards of treatment for all people

Promoting Ethics Importance of firms to implement ethics standards

Prevalent today as shown in articles covered Ethics Quiz