chapter 4-6

Introduction to International Ethics and Social Responsibility

  • Focuses on the role of U.S. businesses in global ethical behavior and social responsibility.
  • Ethical concerns and social responsibility challenges are present in many nations, beyond the U.S.

Ethical Issues in Global Business

  • Influence-peddling and bribery have been reported in countries including:
    • Brazil
    • China
    • Democratic Republic of the Congo
    • Italy
    • Japan
    • Pakistan
    • South Korea
  • Growing scrutiny of government leader's moral and ethical standards, which are now stricter than in the past.

U.S. Businesses and International Standards

  • Many U.S. businesses enforce social responsibility among international suppliers:
    • Ensure adherence to U.S. human rights and environmental standards.
    • Example:
    • PVH Corporation (parent company of brands like Calvin Klein and Tommy Hilfiger) will cancel orders if suppliers violate its ethical, environmental, and human rights codes.
    • Dow Chemical expects compliance with U.S. pollution and safety laws rather than local standards.
    • McDonald's denied supplier rumors of cattle grazing on rainforest land and implemented a ban regardless.

Criticisms of Business Practices

  • Some companies, like Nike, face criticism for labor practices, particularly in developing countries.
    • Accused by human rights groups of poor treatment of workers while investing heavily in athlete endorsements.
    • Example:
    • Cartoonist Garry Trudeau's anti-Nike campaign highlighted these issues in the syndicated series Doonesbury.
  • Nike's response to labor conditions:
    • Monitoring initiatives across 600+ contract factories, adapting to local economic and cultural conditions.
    • Company transparency: released names and factory locations to encourage competitor involvement in improving labor conditions.
    • Conditions have improved overall, yet many workers still earn poverty wages.
    • COVID-19 pandemic impact:
    • 70% of garment workers reported wage cuts during the pandemic.
    • Major brands share factories and pay similar low wages, affecting conditions collectively.

Challenges in Monitoring Practices

  • Reasons Nike's monitoring program has limited success:
    • Weak government regulations in emerging economies lead companies to oversee suppliers.
    • Variability in leverage:
    • Based on duration of relationship and dependency of factory revenue on Nike alone.

Ethical Considerations in Global Standards

  • Complexity of enforcing U.S. ethical standards internationally:
    • Cultural differences in what constitutes a gift versus a bribe.
    • Ethical implications of child labor in countries where it is accepted for family survival.
    • Expectations for foreign companies to comply with U.S. standards.
    • Debates around U.S. retailers' refusal to import goods from Chinese prisons while similar practices exist domestically.
  • The nuances of social responsibility in international contexts pose difficult questions without clear answers.

International Efforts to Combat Corruption

  • The Foreign Corrupt Practices Act criminalized bribery of foreign officials, impacting U.S. businesses' competitiveness.
  • Global efforts to establish common ethics and combat corruption:
    • Inter-American Convention Against Corruption initiated by the Organization of American States.
    • United Nations, EU, and OECD's formal condemnation of corporate bribery.
    • ISO 26000:
    • Social responsibility standard with guidelines on fair treatment of employees, manufacturing practices, etc.
    • Advisory only and not for certification purposes.
  • Formation of a universal set of regulations for multinational corporations remains unlikely.
    • The phrase “Fight corruption” is often seen as a slogan rather than actionable policy; however, it represents an initial awareness of the issue.