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chapter 5
Ethics and Social Responsibility in
International Business

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Griffin & Pustay
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
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Chapter Objectives
Describe the nature of ethics
Discuss ethics in cross-cultural and
international contexts
Identify the key elements in
managing ethical behavior across
borders
Discuss social responsibility in
cross-cultural and international
contexts
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Chapter Objectives (continued)
Identify and summarize the basic
areas of social responsibility
Discuss how organizations manage
social responsibility across borders
Identify and summarize the key
regulations governing international
ethics and social responsibility
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Exporting Jobs or
Abusing People?
Minute Maid
Tropicana
Nestle
Nike
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Nature of Ethics and Social
Responsibility in International Business
Ethics are an individual's
personal beliefs about whether
a decision, behavior, or action
is right or wrong.
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Ethical Generalizations
Individuals have their own personal belief
systems
People from the same cultural context
will tend to hold similar beliefs
Behaviors can be rationalized
Circumstances affect adherence to belief
systems
National culture is intertwined with ethics
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Figure 5.1 Ethics in a
Cross-Cultural Context
Cultural
Context
Behavior of
Organization
Toward Employees
Behavior of
Employees
Toward Organization
Behavior of Employees
and Organization
Toward Other Economic Agents
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Ethics in Cross-Cultural and
International Contexts
How Organizations Treat
Employees
How Employees Treat the
Organization
How Employees and Organizations
Treat other Economic Agents
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Acceptability of Bribery
Acceptable
Russia
China
Taiwan
South Korea
Unacceptable
Australia
Sweden
Switzerland
Austria
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Managing Ethical Behavior
Across Borders
Guidelines or codes
Organizational practices
Corporate culture
Ethics training
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Corporate Social Responsibility
Corporate Social Responsibility is
the set of obligations an organization
undertakes to protect and enhance
the society in which it functions.
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Examples of Companies with Commitment
to Corporate Social Responsibility
L.L. Bean
Toyota
Lands End
3M
Dell Computer
DaimlerChrysler
BP
Honda

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Areas of Social Responsibility
Organizational
stakeholders
General social
welfare
Natural
environment
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Map 5.1 Social Responsibility
Hot Spots
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Approaches to Managing Social
Responsibility
Obstructionist
Defensive
Accommodative
Proactive
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Figure 5.2 Approaches to
Social Responsibility
Least
Responsible
Most
Responsible
Obstructionist Defensive Accommodative Proactive
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Obstructionist Stance
Do as little as possible to address
social or environmental problems
Deny or avoid responsibility
Examples
Astra
Nestle
Danone
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Defensive Stance
Do what is required legally, but
nothing more
Corporate responsibility is to
generate profits
Example
Philip Morris

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Accommodative Stance
Meet ethical and legal requirements and
more
Agree to participate in social programs
Match contributions by employees
Respond to requests from nonprofits
No proactive behavior to seek such
opportunities
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Proactive Stance
Strong support of social responsibility
Viewed as citizens of society
Seek opportunities to contribute
Examples
McDonalds
The Body Shop
Ben & Jerrys
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Managing Compliance Formally
Legal Compliance
Philanthropic Giving Ethical Compliance
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Informal Dimensions of Social
Responsibility
Whistle blowing
Organizational Leadership
and Culture
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Evaluating Social Responsibility
A corporate social audit is a formal
and thorough analysis of the
effectiveness of the firms social
performance.
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Difficulties of Managing Corporate
Social Responsibility Across Borders
The state
Civil society The market
Actors in Policy Formulation Process
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Difficulties of Managing Corporate
Social Responsibility Across Borders
Anglo-Saxon
approach
Continental
European approach
Asian
approach
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Regulating International Ethics
and Social Responsibility
Foreign Corrupt Practices Act (FCPA)
Alien Tort Claims Act
Anti-Bribery Convention of the
Organization for Economic Cooperation
and Development
International Labor Organization (ILO)
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Copyright 2010 Pearson Education, Inc.
publishing as Prentice Hall