Corporate social responsibility (C S R): the set of obligations a corporation undertakes to protect and enhance the society in which it functions The Triple Bottom Line: The Economic Mission The Natural Environment General Social Welfare

1. Chapter 3: Ethics and International
Business (I)

2.  Business is an important part of contemporary
society and it involves all of us, in one way or
another.
 Business is not something separate from society or
imposed on it—it is an integral part of society.
 Morality consists of rules of human behavior and
specifies that certain actions are wrong or immoral
and that others are right or moral.
 Because business activity is human activity, it can
be evaluated from the moral point of view, just as
any other human activity can be so evaluated.

3. Ethics may be defined as the set of moral
principles that distinguish what is right
from what is wrong.
Ethics has a twofold objective: it evaluates
human practices by calling upon moral
standards.
 It may give prescriptive advice on how to
act morally in a given situation.

4.  Ethics are broadly described in the literature as moral
principles about right and wrong, honorable behavior
reflecting values, or standards of conduct.
 Honesty, openness, responsiveness, accountability, due
diligence, and fairness are core ethical principles.
 Ethics are a branch of philosophy with no clear-cut definition
of what behaviors are ethical and which are unethical when
judging one’s behavior.
 There is no general or global consensus for defining ethical
behavior for individuals, as it may change from time to time
and from one place to another place.
 There is no universal measure or standard as to what
constitutes ethical behavior.

5. Ethical problems may vary from one person to another according to the
factors influencing the Ethical Behavior:
 Legal Interpretations: In secular societies, legal interpretations are
based upon contemporary values and standards according to time,
country or situation.
 Organizational Factors: The organization too can affect or influence
participant’s behavior based on the degree of commitment of the
organization's leader conduct
 Individual Factors: Individuals come to work with different values
based on the personal values and morals, family influences, peer
influence and life experiences.

6. Ethical issues may vary from one organization to another
according to the factors influencing the Ethical Behavior:
 conflicts of interest,
 quality control issues,
 discrimination in hiring and promotion,
 misuse of proprietary information,
 abuse of company expense accounts,
 misuse of company assets,
 drug and alcohol abuse,
 environmental pollution, environmental destruction,
 etc.

7.  The term business ethics is used in several
different senses
 (1) ethics in business
 (2) business ethics as a movement
 (3) and business ethics as part of the
general field of ethics.

8.  It is neither defense of the status quo
nor its radical change. Rather, it
should serve to remedy those aspects
or structures that need
to change, and it
should protect those
that are moral.

9.  Expresses the ambivalence of many toward business and a popular,
widespread view of American Business. The myth has several
variations:
 Business is amoral insofar as ethical considerations are inappropriate to
business, because business is business. Ethical language is simply not the
language of business
 Many businesses act unethically not because of a desire to do evil, but
simply because they want to make a profit and therefore disregard some
of the consequences of their actions.

10.  The definition of amoral is someone who does not care if his
actions are right or wrong, or actions that show a lack of care
about what is morally right. A person who has no conscience or
scruples is an example of an amoral person. Stealing from the
poor is an example of an amoral action.

12. By the reporting of scandals and the concomitant public
reaction to these reports;
By the formation of popular groups such as the
environmentalists and the consumerists;
By the concern of business in ethics, as expressed in
conferences, magazine and newspaper articles, and the
burgeoning of corporate codes of ethical conduct and of
ethics programs.

13. The business of business
The moral background of
business
The changing mandate for
business

14.  What is considered to be business and its business varies
from society to society.
 Defining business per se and its proper concern is a social
question that must be answered in a social context.
 The limits and demands imposed on business by society
are frequently moral ones.

15.  Morality consists of rules of human behavior and
specifies that certain actions are wrong or immoral and
that others are right or moral.
 Because most businesses value their reputations, we do
not really live in a “dog-eat-dog” business world. It is
because the ordinary person does not need to be told that
lying and stealing are wrong that they form part of the
background of business.
 The limits set by society on business are often moral, but
they are also frequently written into law.
 The retreat to law as the sole norm by which to guide
business is in part a reflection of the fact that most
managers do not know how to handle many moral issues
in business.

16. The social
mandate to
business is not
only given in law.
Today the mandate
to business is more
complex.
Corporations are
asked to consider
the impact of their
decisions and
actions on the
environment, the
public, and the
common good.
Business must
consider what
structures promote
moral
responsibility and
facilitate the
weighing of moral
and other values.

17.  The term business ethics is used in
three different senses:
 ethics in business
 business ethics as a movement
 business ethics as part of the
general field of ethics.

18.  Morality is a term used to cover those practices and
activities that are considered importantly right and wrong;
the rules that govern those activities; and the values that
are embedded, fostered, or pursued by those activities and
practices.
 Ethics is a systematic attempt to make sense of our
individual and social moral experience, in such a way as to
determine the rules that ought to govern human conduct,
the values worth pursuing, and the character traits
deserving development in life.

19.  Descriptive ethics is closely related to anthropology,
sociology, and psychology
 Normative ethics builds on the whole that
descriptive ethics provides and attempts to supply
and justify a coherent moral system based on it
 Metaethics is the study of normative ethics, and, to
some extent, both normative and descriptive ethics
involve some metaethical activity

20.  Causitry is the art of solving difficult
moral problems, cases, or dilemmas
through careful application of moral
principles.
 Applying general ethics to specialized
fields yields business ethics, medical
ethics, engineering ethics, professional
ethics, etc.

21.  “Business” includes any and all
economic transactions between
individuals, between individuals and
profit-making organizations, and
between profit-making organizations
and other such organizations.
 Business ethics as a field is defined by
the interaction of ethics and business

22.  “Business” includes any and all economic transactions
between individuals, between individuals and profit-
making organizations, and between profit-making
organizations and other such organizations.
 Business ethics as a field is defined by the interaction of
ethics and business
 There is increased interaction between the board of
directors, audit committees, internal auditors, external
auditors, executives, and employees in general regarding
ethical conduct in the workplace.
 Business ethics are most simply described as: a process
of promoting moral principles and standards that guide
business behavior.

23. 1. The application of general ethics principles to
particular cases or practices in business.
2. The second is metaethical: whether moral terms
that are generally used to describe individuals and
the actions they perform can also be applied to
organizations, corporations, businesses, and other
collective entities.
3. The analysis of the presuppositions of business—
both moral presuppositions and presuppositions
from a moral point of view.

24. 4. Fourth, those in business ethics are sometimes
led by embedded problems to go beyond the field
of ethics into other areas of philosophy and into
other domains of knowledge, such as economics
and organization theory.
5. The fifth activity in which business ethics is
typically involved is describing morally
praiseworthy and exemplary actions, of either
individuals in business or particular firms.

31. All organizations, regardless of their mission (e.g., profit
oriented, nonprofit) and size (large vs. small), should establish
an “Organizational Ethical Culture.” that means:
(1) Organization, which is defined as a group of individuals or
entities bound to achieve a shared goal;
(2) Ethics, which is honorable behavior conforming to the norm
of the group;
(3) Culture, which is a pattern of shared beliefs adopted by the
group in dealing with its internal and external affairs.

32. Four different levels of business ethics have been identified
based on what type of business and how their actions are
evaluated.
1. The society level, which defines ethical behavior and assesses
the effect of business on society.
2. The industry level, which suggests that different industries
have their own set of ethical standards (e.g., chemical
industry vs. pharmaceutical industry)
3. The company level, under which different companies have
their own set of ethical standards
4. The individual manager level, at which each manager and
other corporate participants are responsible for their own
ethical behavior
CONSEQUENTLY, one feasible way to judge ethical behavior is
to focus on determinants of business ethics and behavior such as
corporate culture, incentives, opportunities, and choices.

33. Corporate Culture Companies should promote a spirit of integrity
that goes beyond compliance.
Incentives Individuals within the company tend to act
according to incentives provided to them in
terms of rewards and the performance
evaluation process.
Opportunities Effective corporate governance, internal
controls, and enterprise risk management can
reduce the opportunity for unethical conduct.
Choices Individuals, in general, are given the freedom to
make choices and usually choose those that will
maximize their well-being.

34. Sense of employee
responsibility.
Freedom to raise
concerns without
fear of retaliation.
Managers modeling
ethical behavior and
expressing the
importance of
integrity.
An understanding by
leadership of the
pressure points that
drive unethical
behavior.
Processes to find and
fix these areas of
pressure

35. Comply with a
written code of
business
conduct.
Provide
sufficient
training to all
personnel
within their
organization
regarding
personal
responsibility
under the code.
Encourage
internal
reporting of
violations of the
code with the
promise of no
retaliation for
such reporting.
Self-govern
their activities
by
implementing
controls to
monitor
compliance with
all applicable
laws and
regulations.
Share their best
practices in
implementing
the DII
principles
through
participation in
an annual Best
Practices
Forum.
Be accountable
to the public,
particularly
through the
completion of an
annual Public
Accountability
Questionnaire.