TOPIC 5 ETHICS, CSR AND SUSTAINABILITY

Summary

This video discusses the complexities of ethics, corporate social responsibility (CSR), and sustainability in international business. It outlines the ethical challenges due to varying political, legal, and cultural landscapes and the difficulty of establishing global ethical standards. The script addresses common ethical issues like employment practices, human rights, environmental regulations, and corruption. It also explores the reasons behind unethical behavior by managers and introduces three philosophical approaches to ethics: cultural relativism, righteous moralism, and normative ethics.

Takeaways

• 🌐 Ethics, corporate social responsibility (CSR), and sustainability are critical in international business due to varying political, legal, economic, and cultural landscapes.
• 📚 Ethical issues often arise when there are no clear legal guidelines, pushing individuals into a gray area of personal ethics and business responsibility.
• 🤔 Ethical dilemmas do not have a legal framework to guide decisions; they require personal judgment and can have multiple valid alternatives.
• 🏭 CSR involves going beyond legal obligations to support stakeholders, including communities and the environment, through activities like philanthropy and environmental protection.
• 👷‍♂️ Common ethical issues in international business include employment practices, human rights, and environmental regulations, with examples like poor working conditions and child labor.
• 🌳 Environmental regulations are a concern as companies may move production to countries with lax regulations to avoid penalties at home.
• 💸 Corruption varies by country and can influence business operations, with some companies engaging in bribery to gain market access or contracts.
• 📊 The Corruption Perception Index ranks countries by their perceived level of corruption, with Denmark, Singapore, and the Netherlands leading the list.
• 🔑 Determinants of unethical behavior include personal ethics, social culture, decision-making processes, leadership, unrealistic performance goals, and organizational culture.
• 🌍 Philosophical approaches to ethics include cultural relativism, where ethics vary by culture; moralism, where a company upholds its home country's ethics; and normative ethics, which advocate for universal ethical standards.

Q & A

What are the three learning objectives discussed in the script regarding ethics, corporate social responsibility, and sustainability?

The three learning objectives are: 1) Understanding the ethical issues faced by international businesses, 2) Identifying the causes of unethical behaviors by managers, and 3) Describing different philosophical approaches to ethics.

Why is it difficult to establish global ethical standards?

It is difficult to establish global ethical standards due to differences in political systems, laws, economic development, and culture. What might be considered normal in one country could be illegal in another.

How are ethical issues related to but different from legal issues?

Ethical issues are related to but different from legal issues because ethical behavior is about personal conduct in accordance with guidelines for good conduct or morality, whereas legal issues are about actions that are mandated or prohibited by law. Ethical dilemmas often involve no legal guidance, leaving the decision to personal ethics.

What is corporate social responsibility (CSR) and why is it important?

Corporate social responsibility (CSR) refers to a company's practice of going beyond legal obligations to actively balance commitments to stakeholders such as investors, customers, other companies, and communities. It is important because it helps companies build a positive brand image, fosters goodwill, and contributes to sustainable development.

What are some common ethical issues that arise in international business?

Common ethical issues include employment practices and human rights, environmental regulations, and corruption. These issues can vary significantly across different countries and cultures.

Can you provide an example of a company addressing ethical issues in employment practices?

Apple and Foxconn improved working conditions at Foxconn factories in China after charges about poor working conditions were made. This is an example of a company addressing ethical issues in employment practices.

How do companies sometimes evade environmental regulations?

Companies sometimes evade environmental regulations by moving their production to countries with lax regulations, where they can freely pollute the environment without legal repercussions.

What is the Corruption Perceptions Index and what does it measure?

The Corruption Perceptions Index is a ranking that measures the perceived level of public sector corruption in various countries. Countries with the highest scores are perceived as having the lowest levels of corruption.

Why do managers sometimes behave unethically?

Managers may behave unethically due to personal ethics, social culture, decision-making processes, leadership, unrealistic performance goals, and organizational culture. These factors can influence their conduct and decision-making.

What are the three commonly cited philosophical approaches to ethics?

The three commonly cited philosophical approaches to ethics are cultural relativism, which believes ethical truths vary among cultures; righteous moralism, which holds that a company should maintain its home country ethics wherever it operates; and normative view, which believes ethical behavior standards are universal.

How can cultural relativism impact a company's ethical decisions?

Cultural relativism can impact a company's ethical decisions by leading managers to adopt local ethical standards, which might differ from their home country's standards. This could involve practices that are acceptable in the local culture but not in the company's home country.