Ethical Issues in International Business

Summary

This video explores the ethical challenges faced by multinational businesses, emphasizing issues such as employment practices, human rights, environmental pollution, corruption, and moral obligations. It highlights key dilemmas like whether companies should enforce U.S.-style labor standards abroad, the role of businesses in improving human rights and environmental standards, and the ethical concerns surrounding corruption in foreign countries. The video also discusses the responsibility of corporations to contribute positively to the societies they operate in, asserting that while legal practices vary globally, ethical standards should guide business conduct.

Takeaways

• 😀 Ethical issues in international business stem from differences in political systems, laws, economic development, and culture across nations.
• 😀 Employment practices can differ greatly from country to country, raising the question of whether multinational companies should apply U.S. labor standards globally.
• 😀 Nike's 1990s scandal, where they paid workers in Vietnam 20 cents per hour for 12-hour workdays, exemplifies the ethical dilemmas in labor practices.
• 😀 Human rights violations may not be illegal in certain countries, but multinational companies are increasingly expected to respect human rights universally.
• 😀 The improvement of labor conditions in South Africa was largely driven by multinational businesses' influence and pushback against unethical practices.
• 😀 Environmental pollution is a significant ethical issue, especially in countries with lax environmental regulations where dumping or pollution may not be illegal but is morally questionable.
• 😀 The ethical dilemma surrounding environmental pollution raises the question: should multinational businesses engage in practices that harm public goods like oceans and the atmosphere?
• 😀 Corruption in international business is widespread, with companies like Lockheed paying millions in bribes to government officials in the 1970s, leading to the Foreign Corrupt Practices Act in 1977.
• 😀 Some argue that bribery can stimulate business in countries with corrupt political systems, but the ethical stance is that corruption should always be avoided.
• 😀 Multinational companies have a moral obligation to give back to the societies that enable their success, with social responsibility being an essential expectation in global business.
• 😀 The ethical use of power in international business is crucial: companies must consider the social consequences of their actions and act responsibly in their global operations.

Q & A

What is the primary focus of the video?

The video focuses on ethical issues faced by international businesses, discussing how factors such as political systems, laws, economic development, and culture vary between countries and impact business ethics.

What are the five key topics affected by ethical issues in international business?

The five key topics are employment practices, human rights, environmental pollution, corruption, and moral obligations.

Why do employment practices pose an ethical dilemma for multinational businesses?

Employment practices are an ethical dilemma because in some host nations, working conditions that may be considered unethical or illegal in the U.S. are not addressed by local laws, leaving companies to decide whether to uphold U.S. labor standards abroad.

What specific issue did Nike face in the 1990s related to employment practices?

In the 1990s, Nike was criticized for paying workers in Vietnam only 20 cents per hour and requiring them to work 12-hour days, which would not be allowed in the U.S.

What ethical dilemma arises from human rights concerns in international business?

The dilemma is whether multinational businesses should require that workers producing their products in foreign countries be treated according to human rights standards similar to those in the U.S., even if local laws or practices do not protect those rights.

How did multinational businesses impact human rights in South Africa?

In South Africa, conditions improved partly due to pressure from multinational businesses demanding better treatment of workers, helping push the country toward more ethical labor practices.

What is the ethical issue surrounding environmental pollution in international business?

The ethical issue is that many countries lack strong regulations to prevent environmental pollution, leading to harmful practices such as dumping in oceans or polluting the atmosphere. Companies must decide whether to engage in such practices, even if they are not illegal in the host country.

How is corruption an ethical issue in international business?

Corruption is an issue because businesses may resort to bribing officials to secure contracts or gain favorable treatment in countries with weaker regulations. This can foster unethical practices and hinder economic development.

What event led to the creation of the U.S. Foreign Corrupt Practices Act?

The creation of the U.S. Foreign Corrupt Practices Act was triggered by the 1977 discovery that Lockheed had paid $12.6 million in bribes to Japanese government officials.

What is the concept of moral obligations in the context of international business?

Moral obligations refer to the idea that multinational businesses have a responsibility to give back to the communities that allow them to prosper. This is part of the broader concept of social responsibility, where companies consider the societal impacts of their actions.