Lecture
Good morning students,
Today I am here to educate and raise a very important topic of discussion that may, or may not affect your opinion within international organisations. Do you believe international business encourage firms and organisations to become socially responsible and ethical global citizens? What I am here to tell you today is that with the correct organisational procedures, internationally renowned businesses are able to become socially responsible and ethically recognised. However when international organisations have unseemly and immoral behavioural standards, generating ethical global citizens is out of the question.
Today international business ethics have a number of open questions and dilemmas, which are
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It also establishes a healthy and pleasant teamwork atmosphere for all the parties involved in an international business deal, making each party feel comfortable with each other. Also, acting in accordance with moral values is crucial for deserving clients’ attention and support and achieving a significant competitive advantage in a particular market segment.
Some of the most common international ethical issues surround the environment, child labour, working standards and conditions, targeting marketing to vulnerable individuals and corruption.
In recent times, many internationally renowned businesses have been in the spotlight for extreme unethical workplace regulations, which in many cases have had a significant impact on both the business and also the workers. Take Nike for example, one of the world’s top sports clothing brands. I’m sure many of you have seen the great advertising campaigns and perhaps even purchased a pair of sneakers from this international company. However, what Nike does not publicize is the harsh working conditions that the employees are forced to endure. To work at a factory job requires for an individual, usually a woman, to work long hours, ranging from nine to thirteen hours per day six days a week. Those who work here are severely limited in the amount of time they can take off and are forced to work overtime on several occasions during the week. The hourly wage varies from
In Vietnamese factories, workers making Nike merchandize have been found to be forced to work over 600 hours of overtime a year, which is more than 400 hours a year above the legal limit in Vietnam (“Fact Sheet”). Workers have reported being coerced into the overtime hours through threats of unemployment or forced indirectly by the low pay to volunteer for the hours in order to support their families. This in other words is a form of slavery. There are only 24 hours in a day and to spend 16 hours or more at work in order to keep a job is a complete denial of a right to life, or in other words a human rights violation.
This being despite the recession of 2008, we are witnessing an increasingly cooperative and sophisticated international business working environment. While it faces scrutiny in congress currently, the agreement of the Trans-Pacific Partnership treaty was reached in October, 2015; the Transatlantic Trade and Investment Partnership treaty is also seemingly achievable with the revival of American economy in the near future. These new agreements will set up a worldwide business rule structure that will be fulfilled by many major economies. Within this new structure, businessmen and women will face ethical issues globally despite continuing cultural and regional factors still playing a big role within these issues and decisions being made. Learning and analyzing business ethical issues within the case competition will not only assist us to become global business leaders with a deep understanding of corporate social responsibilities but also prepare us to make better decisions for our
Ethics must be global, not local. In order to build a truly great global business the leaders need to bring forward a global standard of ethical practices.
a. Can a multinational firm adopt varying ethical standards [such as with regard to product safety (Pinto), employee benefits (Nike) and “kickbacks” to win business (HP)] in its global operations? Why or Why Not? Discuss in depth based
Business ethics refers to the consideration of moral decisions and responsibilities in the process of operating a business. Business ethics, practiced throughout the deepest layers of a company, become the heart and soul of the company 's culture and can mean the difference between success and failure. Values drive behavior and therefore need to be consciously stated, but they also need to be affirmed by actions. Ethical business environments are created with foundations of integrity, accountability and commitment.
Ethics in global banking and business today is imperative. According to Bill George, an author for Bloomberg Business, “To build a truly great, global business, business leaders need to adopt a global standard of ethical practices.” This sums up why global business leaders need to adopt ethical conduct. To be a success leader, and business, having ethical practices gives you a good standing in the world and a good reputation. When it comes down to it, companies who have not practiced ethical values have no survived as a company, or if they did survive, have a bad reputation and needed to recover tremendously.
Nike Inc., the sports apparel multinational company has been under suspicion and scrutiny for their practice of the unfair treatment and negligent labor habits in their offshore factories. They have been criticized for human rights abuse, child labor law violations, as well as minimum wages and trade union relations violations within a number of Asian countries. They subsequently misguided the public in an attempt to make one believe there is no substance to the allegations of their involvement. The abusive and exploitative treatment and working conditions in these factories has been touted as inhumane in nature as well as an implored violation of worker’s human rights (Figure 1).
No one can truly understand how poor the quality of life for factory workers really is unless you live through it. A former Nike factory worker came out and shared her stories of the abuse she went through while working. Noi Supalai spoke before a crowd at an event hosted by Penn State chapter of the United States Against Sweatshops. This is an organization which is running a campaign called “Just Do The Right Thing” for workers’ rights. She said that there were harsh time constraints set for the products to be produced. When they did not meet the deadline, Nike put a fine on the factory restricting workers to receive their pay. Employees did not get paid for two months until they protested. (“Former Nike factory worker shares story of abusive working conditions” Lee) There have been others reports just like this one from The Daily Collegian such as one from DailyMail.com. Nike’s converse shoe factory supervisors have been revealed to be physically and mentally abusing workers. “Supervisors frequently throw shoes at them, slap them in the face, kick them and call them dogs and pigs.” (“Nike workers kicked, slapped and verbally abused at factories making converse” Daily Mail Reporter). Nike claims there is little they can do to stop such problems. Workers get kicked, and feel powerless, “our only choice is to stay and suffer, or speak out and be fired” says a woman from a plant in Sukabumi. The behind the scenes treatment is unimaginably brutal. It is so hard to think of the workers having things thrown at them, being kicked, scratched, slapped, growled at, forced to stand in the sun, disrespecting religions, and many many more abusive actions done to them as we make our purchases. Why would Lebron James sponsor such a company? Why would anyone sit back and get paid more than anyone could ever need for doing nothing when there are others out there getting paid barely anything for working their tails
Conducting ethical business in the United States can be seen as clear cut to us. Although we are a diverse nation, as U.S. citizens, most gain experience in the professional environment where ethics is explained thoroughly enough that one is able to determine what is ethical and what is unethical. When it comes to ethics in the international arena, Thomas Donaldson explained how that structure almost does not exist since ethical culture, practices and the social norm is different in each country. In the article, Donaldson debunked previous theories like cultural relativism and ethical imperialism while coming up with a guideline that can help companies proceed in understanding cultural difference while still being ethical. (Donaldson, 1996, pp. 48-52) As I read through the article, it made me remember past events that had cultural dilemma while helping me find new ways to help my ethical decision making skills.
International business ethics challenges the corporate world to deal with questions of what to do in situations where ethical standards come into conflict as a result of the different cultural practices in the nation. Since, there is this dilemma that has progressively troubled the large multinational corporations, international business ethics has arisen to help address these adhesive subject matters. There are several international business ethics discussions on the question of how to act in the home country as opposed to the host country is at the central point of most international corporations. The argument in question is how companies should practice their business according
Major business ethics issues had emerged, such as bribery, deceptive advertising, price collusion, product safety, and the environment.
Many ethical issues arise precisely because of differences in economic, political, legal and cultural systems. The ethical issues of International Business affect virtually all areas where the international economy is concerned. In trade relations, each country uses its ability to export its products to other national markets. In currency trading world, all countries benefit when there is a stable exchange rate, which facilitates business and trade, but they also can agree unilaterally to
Ethical issues arise when one is unsure of what is the right course of action to be taken at a single time. This problem becomes exponentially complex when applied to a multinational organization.
The Pou Chen factory is located in a place where the minimum wage is far below the national average. It has 10,000 workers who make Converse sneakers. Most of the workers are women, and they earn only 50 cents an hour. The amount that they earn is not even enough to cover their food and very poor housing. In this factory, the women are both physically and verbally abused. Nike’s own investigations have proved these complaints to be true. The company made a statement saying that immediate actions would be taken to deal with the situation. It is interesting to note that, “an internal Nike report, released to the Associated Press after it inquired about the abuse, showed that nearly two-thirds of 168 factories making Converse products worldwide failed to meet Nike’s own standards for contract manufacturers. Twelve are in the most serious category, ranging from illegally long work hours to
The world is in a position today where globalisation has significantly expanded over the years and is continuing to do so. Hence, there are many large and developed multinational corporations that have outbranched their lower skilled work to less developed countries where labour standards are low, and in addition, where the local workforce are often employed under exploitative working conditions. The key problems currently are managing the evolving ethical problems faced by the local workers.