Chapter 6 - Ethics and International Business and Trade

Ethics

is a branch of philosophy that seeks virtue.

Ethics

is the discipline concerned with what is morally good and morally bad and what is morally right and morally wrong.

Ethics

are moral principles that rule a person’s or organization’s behavior.

Virtue

is conformity of one’s life and conduct to moral and ethical principles.

Business Ethics

is the set of moral rules and principles that govern how businesses operate, how business decisions are made, and how people are treated.

International business ethics

a set of principles that guide ethical decision-making for companies operating across borders.

a global code of conduct that establishes expected behavior for both businesses and their employees.

Child labor

involves using or exploiting children to do jobs for companies or small businesses.

Transfer pricing

is the pricing of goods and services between related entities within a multinational corporation.

Transfer pricing

When done unethically, it can be used to shift profits to low-tax jurisdictions, thereby avoiding taxes in countries where the company actually operates and earns revenue

Fair trade movement

aims to combat exploitation by ensuring that producers in developing countries receive fair compensation and work under decent conditions.

Fair trade movement

addresses issues such as low wages, poor working conditions, and unfair market practices

Fair trade certification

requires companies to meet rigorous standards, which helps empower small scale farmers and workers, promoting sustainable development and ethical consumption.

social equity and environmental sustainability

Businesses engaged in fair trade contribute to

Bioprospecting

involves the exploration of biodiversity for new resources that can be developed into commercial products, such as pharmaceuticals and cosmetics.

Bioprospecting

While it can lead to significant scientific advancements and economic benefits, it becomes unethical when it disregards the rights of indigenous communities and fails to provide fair compensation for their knowledge and resources.

Ethical bioprospecting

requires transparent practices, benefit-sharing agreements, and respect for indigenous rights and biodiversity

Biopiracy

is the exploitation of biological resources and traditional knowledge without proper authorization or compensation to the local communities

Biopiracy

involves patenting natural substances and indigenous knowledge by corporations, depriving original knowledge holders of their rights and benefits.

Biopiracy

unethical as it infringes on the intellectual property and cultural heritage of indigenous people.

Utilitarian approach

which action results in the most good and least harm

Rights-based approach

which action respects the right of everyone involved

Fairness or justice approach

which action treats people fairly

Common good approach

which action contributes most of the quality of life of the people affected

Virtue approach

which action embodies the character that strengthens value

International Monetary System

is a set of internationally agreed rules, conventions and supporting institutions that facilitate international trade, cross border investment and generally the reallocation of capital between states that have different currencies.

International Monetary System

provides the global framework of legal agreements, institutions, and both formal and informal economic actors that collectively facilitate international trade, investment, and the movement of capital across countries.

International Monetary Fund

is an organization of 190 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

1. provides loans to member countries

2. monitors the economic and financial developments of its member

3. provides recommendations on economic policies

4. bilateral surveillance and multilateral surveillance

5. provides expertise

6. offers training programs for government officials and institutions

Role of IMF

bilateral surveillance

involves regular consultations with individual member countries

multilateral surveillance

assesses global economic trends and systemic risks.

1. Exchange rate volatility

2. Global Financial Crisis

3. Economic Inequality

4. Debt crisis

5. Technological advances

Issues and challenges in International Financial and Monetary System