Challenge 6: Responsible Decision Making in International Business

Code of Ethics

a guide of principles designed to help professionals conduct business honestly and with integrity

Consequentialists

- Utilitarianism

- The Egoistic Approach

Utilitarianism

- an ethical theory that determines right from wrong by focusing on outcomes

- holds that the most ethical choice is the one that will produce the greatest good for the greatest number

The Egoistic Approach

- one variation of the utilitarian approach is known as ethical egoism, or the ethics of self- interest

- an individual often uses utilitarian calculation to produce the greatest amount of good for him or herself

Non-consequentialists

- Fairness or Justice approach

- The Ethical Rights approach

The Ethical Rights approach

emphasizes the belief that all humans have a right to dignity

Fairness or Justice approach

is considered fair or just because it provides a procedure for what counts as a fair action and does not concern itself with the consequences of those actions

Corporate Governance

- the structure of rules, practices, and processes used to direct and manage a company

- the system of procedures and processes by which corporations are managed, directed, and controlled

Ethics

- the principles of conduct governing an individual or a group

- moral principles and values that govern the behavior of people, firms, and governments, regarding right and wrong

Corporate Social Responsibility (CSR)

- a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public

- operating a business to meet or exceed the ethical, legal, commercial, and public expectations of customers, shareholders, employees, and communities

Sustainability

meeting the needs of the present without compromising the ability of future generations to meet their own needs

Corruption

- the practice of obtaining power, personal gain, or influence through illegitimate means, usually at others' expense

- a major or severe concern in the global activities of a large proportion of MNEs

- the abuse of power to achieve illegitimate personal gain

Bribery

is common and may take the form of grease payments, small inducements intended to expedite decisions and transactions or gain favors

Relativism

the belief that ethical truths are not absolute but differ from group-to-group; according to this perspective, a good rule is, "When in Rome, do as the Romans do"

Normativism

a belief that ethical behavioral standards are universal, and firms and individuals should seek to uphold them consistently around the world

Framework for making ethical decisions

1. identify problem

2. examine the facts

3. create alternatives

4. implement course of action

5. evaluate results

Triple Bottom Approach/Line (TBL)

profit, people, planet

TBL: People

This measures how socially responsible an organization has been throughout its history. (Average employee payroll to demonstrate livable wages that exceed local expectations for pay.)

TBL: Profit

This is the traditional measure of corporate profit—the profit and loss (P&L) account. (Profit is the easiest component of triple bottom line to report as it already has strong guidance.)

TBL: Planet

This measures how environmentally responsible a firm has been. (Amount of waste generated in pounds; this may also include amount of recycled product over a period of time.)

G.R.O.W.

Global Responsible Organization and Work

____ is the procurement of products or services from suppliers located abroad.

Global sourcing

______ refers to offering, giving, receiving, or soliciting anything of value to influence the actions of a government official or a corporate manager.

Bribery

According to relativists ________.

ethical truths differ from group to group

In countries with minimal corruption

financial and accounting information is transparent

Copyright

grants protection to the creators of art, music, books, software, movies, and TV shows

Counterfeiting

the process of reproducing assets without compensating those who originally created them