ETHICS

1. ETHICS • Introduction • Ethics and Law Distinguished • Ethical Schools of Thought • Utilitarianism • Rights-Duties • Justice-Fairness • Ethics of Care • Application of Ethical Standards

2. ETHICS AND LAW • Law • Involuntary application of rules and regulation within jurisdiction of host nation • Law provides for sanctions and penalties if non-compliance by international corporation • Ethics • Voluntary compliance with recommendations from International Labor Organization or Organization for Economic Cooperation and Development No legal penalties for noncompliance

3. ETHICS AND LAW • Ethics-continued • Ethical Relativism- • theory that different countries or cultures have different ethical belief systems there is no supranational way of determining whether an action is right or wrong • Ethical Problems • Poor ethical decisions can damage corporate profits, reputation, credibility, public image and lead to poor public relations.

4. ETHICS • Utilitarian-Teleology or consequentialism looks to the consequences of a decision or an action to determine if it was ethically correct. • Utilitarian Theories • Egoism • Benefit Cost Analysis

5. ETHICS • Utilitarianism • Egoism-associated with Adam Smith’s “Wealth of Nations”. In short, individuals should be allowed to make decisions based upon their own rational self interest. • Benefit Cost Analysis-where one attempts to to monetize the ethical determination by placing a dollar value on the benefits and costs of an action from the narrow perspective of decisionmaker.

6. ETHICS • Utilitarianism-continued • Criticism of Utilitarianism Theories • Non-quantifiable variables such as human life or well being. • Weighing direct and indirect effects from the perspectives of all parties or stakeholders. • Which concerns should be the “dominant concern” in making ethical decisions. • What are the distributive effects of a decision

7. ETHICS • Rights and Duties-Individual ethical actions to others. • Ethical Theories on Rights and Duties • Enunciated Rights Approach • Kantian Approach • Virtue Approach

8. ETHICS • Rights and Duties-continued • Enunciated Rights Approach-individual has a duty to respect the enunciated rights of others • John Locke-inalienable rights as enunciated in the United States in the Bill of Rights, Constitution and Declaration of Independence-life, liberty and property. • French Rights of Man • United Nations Declaration on Human Rights and Development-Articles 3 through 25

9. ETHICS • Kantian-absolute duty that cannot be changed because of unattractive consequences created by such duty • Categorical Imperative-non-negotiable duties or laws • Obedience to the Law-Bhopal Incident • Virtue Approach-focus is upon the moral character or motivation of the actor. • Actor must avoid vices

10. ETHICS • Ethics of Care-focuses on the preservation of relationships. The view is that one owes an obligation to some rather than to others. • Milton Friedman-corporation owes a duty to shareholders and not society. • John Kenneth Galbraith-corporation has a social obligation. • Example would be decision to close a plant that injures a number of people in the community.

12. ETHICS • Ethics of Care-continued • Organizational Ethics-individuall liability for violating organizational moral duties. • Subordinate Responsibility-must think from the perspective of other persons when acting upon the other person. • Caux Round Table Principle for International Business-combining the Western concept of dignity of all human beings and the Japanese concept of Kyosei that a primary value of society is working together.

13. ETHICS • Application of Ethical Standards-environment, bribery, standards and advertising • Environmental • Korea-Rapid economic growth lead to environmental concerns. • Korea created a number of governmental and non-governmental agencies to protect the environment. • Ethical Issue-should foreign firm apply higher standard or just meet the standards applied by the Korean government.

14. ETHICS • Bribery • Foreign Correct Practices Act-anti bribery provision, record keeping provision and disbursement provision. • See Comparative Law: Foreign Corrupt Practices Act • See Case Lamb v. Phillips • United States v. Liebo

15. ETHICS • Bribery-continued • Elements of Offense Under Foreign Corrupt Practices Act • Who • Corrupt Intent • Corrupt Act • Recipient • Business Purpose

16. ETHICS • Bribery-continued • Organization for Economic Cooperation and Development • OECD Convention on Combating Bribery of Foreign Public Officials in International Business • Development Centre on Corruption-assist developing nations combating corruption • United States is bound by convention. Convention is similar to FCPA.

17. ETHICS • International Standard-international organizations businesses may consult • OECD • International Chamber of Commerce • International Organization for Standardization

18. ETHICS • Advertising • International Chamber of Commerce has some standards on advertising. Examine provisions in insert