International Business: Ethics How to behave ! ( or NOT )

2. International Business: Ethics How to behave!(or NOT) Presentation by Steven Douglas This presentation has not been endorsed by any of the companies mentioned .

3. How Unethical Are You?Top 10 Dilemmas 1. Your boss asked you to cover for him on his expense report by saying you were at a meal when you weren’t. Should you do it? 2. Is it ever OK to sneak a peak at your child’s email? 3. If someone tells an offensive joke, is it your responsibility to speak up about it? 4. Are you obligated to lend money to friends and family? 5. Is it OK to fantasize about someone else when you’re with your partner? 6. Your boss gave you credit for a project on which a colleague did most of the work. Should you accept the praise? 7. Is it unfair to move to better (open) seats at a sporting event or a concert? 8. If a charity sends you free address labels and you don’t make a contribution, is it OK to use them? 9. Is it considered stealing to take pens from a bank? What about extra napkins from a fast-food restaurant? 10. If something at a yard sale is far more valuable than the posted price, do you have to let the seller know?

4. What is Ethical Behavior? Living according to a standard of what is right or wrong behavior. How we think and behavetowards others. Behavioraccording to how we are raised, traditions and beliefs of our society. (source: “Business Ethics: A Real World Approach” Andrew W. Ghillyer (textbook for Business Ethics course at Shepherd)

5. The Golden Rules of Behavior? Do unto others as you would have them do unto you. or Treat others as you would like to be treated. (source: “Business Ethics: A Real World Approach” Andrew W. Ghillyer (textbook for Business Ethics course at Shepherd)

6. What are Business Ethics? Defining Business Ethics at Dow Chemical Corporation. Every employee must be – • Lawful, highly principled and socially responsible. • Adherent to the companies policies and laws • Adherent to the companies Code of Conduct: How to deal with Bribery, Political Contributions, EEO, Environmental, Health and Safety Regulations. “Ethical behavioris everyone's responsibility. Our goal is to create an atmosphere where our people feel comfortable that they have the knowledge and support to protect our company's values." (Source: David Wilkins, Director of Ethics and Compliance for Dow Chemical)

7. Golden Rule vs. Business Ethics Golden Rule – How YOU believe you should behave. Business Ethics – How your employer believes you should behave.

8. Unethical Business Practices Resorting to dishonesty, trickery or deception Distortion of facts to mislead of confuse Manipulating people emotionally by exploiting their vulnerabilities Greed to amass excessive profit Creation of false documents to show increased profits Invasion of privacy used as leverage, for obtaining personal or professional gain Sexual discrimination

9. How to be Corrupt“People are as corrupt as the system allows them to be.” • Corruption is the abuse of entrusted power for private gain.. Bribes; Kickbacks, Embezzlement • Industries most prone to Corruption: Construction, real estate, oil and gas sectors • Companies based in emerging economic giants, such as China, India and Russia, are perceived to routinely engage in bribery when doing business abroad

10. How to Bribe 1. Offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal or a breach of trust. 2. Soliciting, arranging or accepting bribes intended for the employee’s benefit or that of the employee’s family, friends, associates or acquaintances. 3. Indirect contributions to political parties, organizations or individuals engaged in politics, as a way of obtaining advantage in business transactions. 4. Gifts, hospitality or expenses whenever they could affect or be perceived to affect the outcome of business transactions and are not reasonable and bona fide.

11. Shepherd Procurement Department • Give first consideration to the objectives and policies of my institution. • Strive to obtain the maximum value for each dollar of expenditure. • Decline personal gifts or gratuities. • Grant all competitive suppliers equal consideration insofar as state or federal statute and institutional policy permit. • Conduct business with potential and current suppliers in an atmosphere of good faith, devoid of intentional misrepresentation. • Demand honesty in sales representation whether offered through the medium of a verbal or written statement, an advertisement, or a sample of the product. • Receive consent of originator of proprietary ideas and designs before using them for competitive purchasing purposes. • Make every reasonable effort to negotiate an equitable and mutually agreeable settlement of any controversy with a supplier; and/or be willing to submit any major controversies to arbitration or other third party review, insofar as the established policies of my institution permit. • Accord a prompt and courteous reception insofar as conditions permit to all who call on legitimate business missions. • Cooperate with trade, industrial and professional associations, and with governmental and private agencies for the purposes of promoting and developing sound business methods. • Foster fair, ethical and legal trade practices.

12. Multinational CorporationGuidelines to Ethical Behavior in International Business • Not offer, promise or give undue pecuniary or other advantage to public officials or the employees of business partners. Likewise, enterprises should not request, agree to or accept undue pecuniary or other advantage from public officials or the employees of business partners. • Develop and adopt adequate internal controls, ethics and compliance programs or measures for preventing and detecting bribery, developed on the basis of a risk assessment addressing the individual circumstances of an enterprise, in particular the bribery risks facing the enterprise (such as its geographical and industrial sector of operation) • Promote employee awareness of and compliance with company policies and internal controls, ethics and compliance programs or measures against bribery, bribe solicitation and extortion through appropriate dissemination of such policies, programs or measures and through training programs and disciplinary procedures. • Not make illegal contributions to candidates for public office or to political parties or to other political organizations. Political contributions should fully comply with public disclosure requirements and should be reported to senior management.

13. Main Obstacle in International Business Ethics • Every culture and nation has its own values, history, customs and traditions, thus it has developed own ethical values and understanding of ethical principles; • There is no international ethical code of conduct, accepted and followed by all the countries; • There is a lack of governments’ initiative to create ethical cooperation framework and thus to enhance ethical behavior in international business; • It is hard to outline those ethical values which would be understandable, acceptable and important for representatives of all the continents simultaneously within different types of international cooperation projects.

14. Personal Examples of Ethical Business Conflicts (St. Petersburg, Russia) Purchased Distribution Center Logging Operation in Southern Russia Joint-Venture

15. And finally… My personal advice for having success in your future business ventures…

16. KNOW YOUR PARTNERS

17. Topics if there is time… • Traveled to Saigon, Phnom Pehn, Vientiane and Tehran (1973) • Worked in the Professional Theatre (1978-1984) • Organized Industrial Tradeshows and Conferences in China, Japan, Mexico and Russia (1985-2000) • Was interrogated by the KGB (1993) • Lived and worked side-by-side with the Russian Red Mob (1994-1999) • Went bear hunting in Siberia and then took a Tupelo jet to Pyong Yang, North Korea (1995) • Almost jammed with President Clinton at a Jazz Club in Russia (1998) • Provided personal mobile communications to Ahmed Chalabi (Iraqi Exiles) and the Secretary of Defense/Coaltition Provisional Authority and others. (2003-2005) • How to Traffic Human Beings: Master’s Thesis at AU (2004)