Countrywide & The Mortgage Industry Crisis

Global Warming
Martha Stewart & Enron
De Beers & Diamond Mining
Sweat Shops
Employment of Illegal Aliens / Foreign
Workers
 Ethics

Global Social Responsibility

Human Rights & Corruption

Promoting Ethics in Transnational

Companies
 Oxford Definition
Ethics | plural noun
1. [usu. treated as pl.] moral principles that
govern a person’s or group’s behavior : Judeo-
Christian ethics. • the moral correctness of
specified conduct : the ethics of euthanasia.
2. [usu. treated as sing.] the branch of
knowledge that deals with moral principles.
Standards of Right & Wrong

Establishing a standard of conduct, belief

values, and sensitivity.
Guidelines for making decisions that effect
employees, the organization, consumers, and
other parties.

The importance of managerial ethics

increases in proportion to the importance of
the outcome.
Behavior that focuses on supposed short term
advantages without considering mid- and
long-term consequences.
12% of Brazil’s Amazon charcoal works still
use slave labor despite ban by Citizen’s Coal
Institute (regional industry watchdog since
2004)
1,500 charcoal works operate in this region
316 charcoal works shut down due to
infractions
U.S. buyers concerned about doing business
with unethical charcoal works – ethics
perception.
Social
Economic
Human Asset
 Transnational Firm
Viewpoint
Actively solve host-country problems
Simply doing business is addressing local
social, human asset, and economic problems
Earn a profit
 Internal Beneficiaries
Employees
Customers
Owners
 External Beneficiaries
Special-interest groups
Racial and ethnic minorities
Women
Handicapped
Aged

Groups that succeed in having laws made

Equal Employment Opportunity
Affirmative Action
 General External
Beneficiaries
Solve or prevent general social problems
Stakeholder management devices
Ethics committees
Public Affairs Office
Code of Ethics
Corporate Sponsorship
Employee Newsletters
 Global Social
Responsibility
Basic standards of treatment for all people,
regardless of :

Religion Gend Race

er

Economic
Nationality
status
Forced labor and inhumane working
conditions are examples of human rights
violations
Companies implement policies and programs
to avoid violations and are regulated by global
groups, such as Amnesty International
No longer acceptable
International and national laws governing
corruption, bribery, and fraud are becoming
increasingly pervasive
Why should a transnational company consider
ethics?
1. Combat human rights violations
2. Good ethics is good business
Good ethics is good business
Ethical standards can be considered an asset

• Investing in ethical behavior may yield

Special efforts and short term profit loss
cost • Unethical behavior results in public
outcry, legal action, and extended loss of
profits
• Investment may be balanced-out by a
gain in reputation
Reputation • Reputation of a company is one of the
most valuable assets even if not in the
balance sheet
How does a transnational company promote
ethics?
No one successful approach
Ethics most effective when a part of a
company’s culture
Successful Strategies for Promoting
Ethics
No universal set of standards
Situation
Country
Context

Review and consider each host country

separately
Ethics
Standards of right and wrong
Social Responsibility
Social, economic, and ethical decision making
Human Rights
Basic standards of treatment for all people
Promoting Ethics
Importance of firms to implement ethics
standards
Prevalent today as shown in articles covered
Ethics Quiz