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BU IBUS 311 - Ethics in International Business
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IBUS 311 1st Edition Lecture 6Outline of Last Lecture I. What Dimensions does Culture Have? II. What Contemporary Issues does Culture Face Today? III. How to Overcome/manage Cross-cultural Risk? Outline of Current Lecture I. What is Ethics? How is Ethics Understood in International Business?II. What is corporate social responsibility? III. What is the role of sustainability in international operations? Current LectureI. What is Ethics? How is Ethics Understood in International Business?- Ethics are moral principles and values that govern the behavior of people, firms and governments, regarding right and wrong.- Global sourcing raises concerns about ensuring human rights and protecting the environment. Some companies operate sweatshop factories in which employees arechildren or work long hours for very low wages, often in harsh conditions. Many firms operate factories that generate much pollution.- Deceptive marketing practices in advertising and selling are intended to induce people to buy their products. Marketers may make false claims about the qualities oreffectiveness of a product. Advances in communications technologies allow fraudulent marketers to easily target victims in foreign countries- Defective or harmful products or packaging affect public health, safety, and natural environments. For example, millions of electronic products from cell phones to computers are discarded every year. Products that could be recycled end up in landfills. - The PWC Global Economic Crime Survey has found:These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.o -Economic crime remains a fundamental fact of life for every segment of the global business community and is a persistent threat to business and business processes.o Fraud comes in many varieties, each with its own characteristics, threats and strategic- Most widely spread unethical behavior: Corruption as the abuse of public power to achieve illegitimate personal gain. - The U.S. Foreign Corrupt Practices Act: Prohibits the bribery of foreign government officials by U.S. persons and prescribes accounting and record-keeping practices.o Excluded from the act: Payments to non-government officials Grease or facilitating payments (made to expedite or secure the performance of a routine government action) usually made to lower-level government officials- Extortion: payment made to prevent some unjustifiable harm by the party demanding payment- Bribe: abuse of public power for private gain - Facilitating payment: payment made to expedite or secure the performance of a routine government action such as “obtaining permits, licenses, or other official documents that allow one to do business in a foreign country; processing government papers (such as visas and work orders); scheduling inspections; clearing goods through Customs; providing police protection; mail pick-up and delivery; phone, power or water service, and loading and unloading cargo.” - Intellectual property refers to ideas or works created by individuals or firms and includes a variety of proprietary, intangible assets: discoveries and inventions; artistic, musical, and literary works; and words, phrases, symbols, and designs. - Intellectual property rights are the legal claim through which proprietary assets are protected from unauthorized use by other parties, via trademarks, copyrights, and patents. - Trademarks are distinctive signs and indicators that firms use to identify their products and services. (Will be on Exam)- Copyrights grant protections to the creators of art, music, books, software, movies, and TV shows. (Will be on Exam)- Patents confer the exclusive right to manufacture, use, and sell products or processes. (Will be on Exam)- Relativism is the belief that ethical truths are not absolute but differ from group to group. According to this perspective, a good rule is “when in Rome, do as the Romans do.”- Normativism is a belief that ethical behavioral standards are universal, and firms andindividuals should seek to uphold them consistently around the world.II. What is corporate social responsibility? - Corporate social responsibility: Manner of operating a business that meets or exceeds the ethical, legal, commercial, and public expectations of customers, shareholders, employees, and communities.- A strong CSR helps recruit and keep good employees. - Can help differentiate the firm and enhance its brands. - Helps cut costs, as when the firm takes steps to minimize packaging, recycle, economize on energy usage, and reduce waste in operations. - Can help the firm avoid increased taxation, regulation, or other legal actions by local government authorities. III. What is the role of sustainability in international operations? - The sustainable firm pursues three types of interests:1. Economic interests refer to the firm’s economic impact on the localities where it does business, such as regarding job creation, wages, and public works. 2. Social interests refer to how the firm performs relative to social justice, such as avoiding the use of child labor and sweatshops, as well as providing employee benefits. 3. Environmental interests refer to the extent of the firm’s impact and harm to the natural


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BU IBUS 311 - Ethics in International Business

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