250-759 Social Responsibility of Business
description
Transcript of 250-759 Social Responsibility of Business
© Prentice Hall, 2001
250-759 Social Responsibility of Business
Prepared by W. L. Dougan
Lecture 6
© Prentice Hall, 2001
Chapter NineEthical Issues in International Business
Ethical Theory and Business, 8th Edition
Tom L. Beauchamp & Norman E. Bowie
© Prentice Hall, 2001 3
Topics for Chapter 9 Ethical Principles for Multinationals Ethical Relativism
© Prentice Hall, 2001 4
Alternative Standards of Conduct Norms of home country Norms of host country Profitable choice Morally appropriate choice
© Prentice Hall, 2001 5
“Relativism and the Moral Obligations of Multinational Corporations”
Norman Bowie General multinational corporation
obligations Distinctive obligations Relativism Morality of the marketplace
© Prentice Hall, 2001 6
When in Rome do as the Romans do? Norman Bowie Only guide is what is legal and
appropriate in that country Justification: In some instances, laws and
regulations may be stricter (e.g., Europe have stricter environmental laws)
If things are sufficiently different, then it is (maybe) necessary to apply different standards (e.g., US companies complied with Arab firms not to post women for fear of losing lucrative contracts)
© Prentice Hall, 2001 7
Is the adage wholly justified? No – because a country permits
bribery, unsafe working conditions, and violation of human rights does not mean that these practices are acceptable
How can one justify the wages paid by multinationals to less developed countries when these wages are a fraction of what is paid at home
© Prentice Hall, 2001 8
Are there some universal standards? Yes – most cultures value
Human dignity, economic well-being, truthfulness, sense of justice and fairness
A document on global ethics produced by two religious leaders cites two universal principles Every human being must be treated
humanely What you do not wish to be done to yourself,
do not do to others
© Prentice Hall, 2001 9
DeGeorge – developed 7 principles
Multinationals (MNCs) should do no harm MNCs should produce more good than bad for the
host country MNCs should contribute by their activities to the
host country’s development MNCs should respect the right of their employees MNCs should pay their fair share of taxes To the extent that the local culture does not violate
moral norms, MNCs should respect these norms MNCs should cooperate with the local governments
in the development and enforcement of background institutions
© Prentice Hall, 2001 10
Donaldson – Minimal duties of MNCs MNCs have an obligation to respect
fundamental international rights Negative harm principle – MNCs have
an obligation not to add to deprivation or suffering
Rational empathy test – put yourself in the shoes of the foreigner
© Prentice Hall, 2001 11
International standards for behavior Agreement already exists Standards are necessary for
society and exchange Business activity presupposes
some moral standards anyway
© Prentice Hall, 2001 12
Are international norms appropriate? Standards might destroy culture Moral free space is available for
difference
© Prentice Hall, 2001
Denis Arnold “The Human Rights Obligations of
Multinational Corporations” Defends a Kantian view of the human
rights obligations of corporations Defends Kantian view against criticism Criticizes one recent effort by the
United Nations to identify the human rights obligations of corporations
13
© Prentice Hall, 2001
Human Rights Principle Human rights are different from
legal rights in that they do not depend upon state sanction for their legitimacy
14
© Prentice Hall, 2001
United Nations positions on human rights The Universal Declaration of Human Rights
(1948) is aimed at states, not corporations Draft Norms on the Responsibilities of
Corporations and Other Business Enterprises with Respect to Human Rights
(2003) is aimed at corporations. They are too wide and imprecise They fail to distinguish between basic obligations and
those actions that are good to perform but not mandatory.
15
© Prentice Hall, 2001
Basic rights Are inalienable Are attributable to persons
16
© Prentice Hall, 2001
Kantian basis for rights Entails negative duties such as
avoiding physical force or coercion Entails positive obligations like
ensuring positive well-being Freedom: Individuals should be
free to as much freedom as is compatible with a like freedom for all.
17
© Prentice Hall, 2001
Kantian basis for rights (cont.)
Human capabilities necessary to function well: life, physical health, freedom of thought and expression, and the ability to pursue one’s conception of the good.
The right to physical security and freedom of movement. The right to non-discrimination on the basis of arbitrary
characteristics such as race, sex, religion, ethnicity, and sexual orientation.
The right to freedom of association and collective bargaining. The right to fair treatment. The right to subsistence The right to develop basic human capabilities.
18
© Prentice Hall, 2001
Universality of rights concepts Human rights are not merely a Western
concept. There are diverse Asian societies which,
embrace human rights language and arguments. Ex. - India
Even if all Asian nations denied the validity of human rights arguments, this would not entail that they were correct.
19
© Prentice Hall, 2001 20
Patricia H. Werhane “Exporting Mental Models: Global
Capitalism in the Twenty-First Century” Argues for caution in extending Western
style capitalism abroad Provides several examples of where the
unreflective extension of Western style capitalism has led to bad outcomes
© Prentice Hall, 2001
Mental Models Mental representations, cognitive
frames, or mental pictures that frame and organize human experience
Mechanisms whereby humans are able to generate descriptions of system purpose and form
Explanations of system functioning and observed system states
Predictions of future system states.
21
© Prentice Hall, 2001 22
Patricia H. Werhane Many possible ways to organize
economic activity Our assumption in the US is that
we have extraordinary success, and that others will be improved if we offer assistance in doing things our way
© Prentice Hall, 2001 23
Patricia H. Werhane American models of free enterprise and
property cannot be transferred uniformly throughout the world without unforseen consequences.
Analogous to biological transfer from one context to another Euclyptus trees Dandelion
Doesn’t mean that it cannot be transferred at all
© Prentice Hall, 2001 24
Patricia H. Werhane We must seek some moral
minimums to remove human suffering, abject
poverty, preventable disease, high mortality and violence
We must tread lightly and carefully when we act in alien cultures
© Prentice Hall, 2001
David Hess & Thomas Dunfee “Taking Responsibility for Bribery:
The Multinational Corporation’s Role in Combating Corruption”
Describe the harm cause to local communities by corruption,
Discuss international treaties banning bribery
Highlight the efforts of Shell to abolish slavery
25
© Prentice Hall, 2001
OECD Convention on Combating Bribery of Foreign Public Officials
Ratified by 34 countries Makes it illegal to bribe abroad Transparency International Reports
that only 19% of executives knew about the convention
Just 27% reported reduced corruption after the convention
26
© Prentice Hall, 2001
Foreign Corrupt Practices Act
U.S. law that went into effect in the U.S. in 1977
Currently U.S. corporations are the 9th most likely to bribe foreign officials (out of 21)
27
© Prentice Hall, 2001
C2 Principles Adapted by the Caux Roundtable Three themes:
Policies Procedures Publication
28
© Prentice Hall, 2001
Shell’s Anti-Corruption Policies Studied best practices at 15
companies Put in place a no-bribes policy Promulgates and educates within
the organization Defines bribery Terminates and prosecutes
employees that pay bribes29
© Prentice Hall, 2001
Supreme Court of Texas, Dow Chemical Company and Shell Oil Company v. Domingo Castro Alfaro et al.
Concerns the question of whether or not a Texas based corporation can be held accountable in Texas courts for harmful actions conducted abroad, or whether this is inconvenient for such corporations and thus should not be allowed
The majority of the court found that corporations should be held accountable for overseas activities in Texas courts.
30
© Prentice Hall, 2001
United States Court of Appeals for the Ninth Circuit, Doe 1 vs. Unocal Concerns Unocal’s involvement
with forced labor and human rights abuses in Myanmar (Burma).
Court found that Unocal could be held liable for complicity with such practices in U.S. courts
31