Global Business Ethics

Responsible Decision Making in an International Context

Ronald D Francis, Guy Murfey

• Éditeur: Kogan Page
• Année: 2015
• ISBN:
  9780749473969
• Édition: 1
• Sujet: Business
• Sous-sujet: Business Ethics

Corporate social responsibility, sustainability and acting ethically are all accepted business aims, but their meaning and implementation in a global context is far less clear-cut. Global Business Ethics cuts through the confusion to provide a coherent basis for ethical decision-making within the complications of the international business landscape. Underpinned by theory and including worked-through examples of ethical dilemmas and their solutions, this textbook will guide the reader beyond theory to real-world business decisions. Practical tools such as decision trees and suggested principles to apply in dilemma situations give readers the skills and confidence to tackle the ethical challenges they face. Global Business Ethics offers a unique working code of ethics provided as a model with guidance to readers for adaptation and implementation. Case studies include: Walmart, Hershey's, Citibank, Ford, Nike, Johnson & Johnson, Harley-Davidson, The Body Shop and Procter and Gamble. A chapter on the legal aspects of ethics provides guidance on the complex relationship between law and ethics in international business. The final part takes an in-depth look at the practical application of ethics in business life. Covering all the major theories of ethics, including an examination of the role of quantification of ethics, Global Business Ethics demonstrates how their principles can be applied to inform better business decisions.Online supporting resources for this book include instructor's manual, lecture slides and appendices.

PART ONE

The necessity, justification and research into cross-cultural business ethics

01

Background to ethics

Introduction

This chapter is to introduce the necessity and justification for ethics in business. It canvasses some salient issues in business ethics, and provides cases for consideration. In this it invites readers to consider the issues involved in being ethical. It should be kept in mind how extensive a subject business ethics is. The spectrum to be covered ranges from the philosophical view of how to formulate ethical principles that cover the range of issues encountered in business, down to recognized standards for international corporations.

It deserves the strongest possible emphasis that it is now a global world. As such we are compelled to be aware of different cultures having different values. To that end, matters like Sharīʿah law, Confucianism, and cultural practices are important for understanding the modern business environment. These factors, as well as the international efforts to address the ethical conduct of corporations, are fundamental drivers of this work.

This chapter concludes that there is a substantial argument in favour of being ethical, and that includes long-term considerations.

Purpose of the book

---

The Chief Executive Officer of a large accounting organization, ignoring corporate hierarchy, calls a Senior Associate to provide glowing feedback received from a client on a recent and difficult contract negotiation. The Senior Associate was, however, a last-minute replacement due to an unexpected illness and actually had no substantial role in the work, or in the resolution. The initial work on this contract was undertaken by a person who is now absent due to a serious illness and is likely to be away for months. Should the Senior Associate correct the CEO and attribute the work to the absent colleague?

---

This brief story is so familiar in its theme it is almost a cliché; however, it is unfortunately all too common in the corporate world. Importantly it illustrates so clearly the nature of dilemmas. No-one who hears this story is in any doubt about its intent. We know instantly and intuitively what is wrong. This book attempts to make that intuition more explicit. Feelings alone are no guide: presumably tyrants, psychopaths, and ideological maniacs are all convinced of the rightness of their feelings. It is by the use of reason that we come to moral understanding.

It is not implied here that ethics and the law are two separate realms of discourse. Rather it is argued that they occupy complementary functions along the same dimension of being concerned with human values, and of providing remedies and improvements to derelictions of behaviour.

---

Key learning points

The key learning points of this introductory chapter are:

• The necessity for business ethics.
• The advantages of being ethical.
• The importance of corporate governance.
• The need for strong ethical guidelines.
• The role of goodwill.

The chapter also explores:

• Early attempts at ethics in business and commerce.
• The Marlow Declaration.
• The means and ends debate.
• Whether ethics is a luxury.

---

Moral versus aesthetic values

Throughout the text it is recommended to distinguish what is moral from what we find attractive. We might be offended by being asked to admire the ornate architecture of a business premises, but there is nothing moral in it. On the other hand a person might be compelled to adopt a particular viewpoint about conducting a business that is at odds with that person’s values: that is a moral question. The main point here is that it is important to distinguish the aesthetic from the moral.

The necessity for business ethics

All senior business people should have an interest in business ethics, firstly, because it is highly likely they have a legal obligation to do so. In the wake of corporate failures in the 1990s most governments introduced suites of legislation, regulations and regulatory bodies that require publicly listed companies to have and report on their ethical conduct codes. There are also implications for the extent and amount of punishment that may be meted out to a company when some unlawful act occurs. A demonstration that the company is fundamentally ethical and the event was an anomaly can substantially mitigate the potential consequences (discussed elsewhere in the book).

The variations between jurisdictions can have implications for global companies. Note that one of News Corporation’s most serious concerns coming out of the phone hacking scandals in the UK was the potential that the behaviour would have implications for its extensive US operations where the laws provide for prosecutions under the Foreign Corrupt Practices Act.

A business leader’s interest in ethics should not stop there. Their corporation may perform the required steps – have a code, train staff in the code and have some form of compliance activity – but yet behave in a way that is unethical while adhering to the law. There are many contemporary examples of this throughout this text. A business executive should take an interest beyond box-ticking, burdensome administration because lawful yet unethical behaviour can cause severe harm to their organization and the community. A ‘box-ticking’ mentality is likely to be at odds with ethical behaviour. It is as if once the box is ticked a person can then turn off the ethical switch. Having done the ‘right thing’ they are then absolved from behaving ethically.

There may have been nothing unlawful about banks loaning money to people who were a dubious credit risk. However, when the practice became large scale and ultimately collapsed under the weight of unviable borrowings, it caused the Global Financial Crisis. Millions of ordinary people lost their savings or had them reduced, the values of property collapsed, and business and consumer confidence was shattered. It was only the intervention by governments on a massive scale that prevented the disaster becoming a catastrophe. The frequently cited defence for these unconscionable acts has been that it was lawful and that a corporation’s duty is to its shareholders; to optimize profit.

Technology has been driving an increasingly global world. A call centre in Mumbai can easily take a call from a consumer in Dallas. Video conference calls connect boardrooms in London and Hong Kong. Information flows in great currents through optic fibre cable beneath the world’s oceans. The phones in our pockets have more computing power than the Apollo spaceships and connect us together all day every day. This revolution has been dissolving borders and national distinctions that have been the basis of our traditional social order.

In the past, companies identified with a nation even if they operated in multiple countries, and looked at least in part to the social wellbeing of its home country. In the new world order large multinationals are borderless entities chasing the best tax deal or cheapest workforce. The borderless world has increased the opportunity to legally avoid taxes and shift work to jurisdictions with fewer legal restraints in such areas as employment conditions. These actions deprive nations of the revenue they need and workers of the jobs that are the foundation of their quality of life. Again, the many executives maintain that they are compelled to take these actions, that their duty is to their shareholders and profitability.

This blurring of national lines has created opportunity but has arisen in parallel to rapidly advancing mass media and a greater sense of social responsibility in the wider world community. In brief, these changes mean that inappropriate behaviour such as exploiting foreign workers for the sake of profits can damage a company’s reputation before they even have a chance to respond. This public exposure of this type of behaviour has probably had a beneficial effect.

Lawmakers play an important role, discussed at various points throughout this work, but to make government the sole keeper of social responsibility is to ignore history and reality. The law nearly always follows behin...