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International business impacts daily life around the world and also affects ethical decisions in business.

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To describe settings in which international business affects people

To list issues that affect ethics in international business

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It is necessary to work in the global environment in an ethical and legal way in order to sustain effective global trade.

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ethicsa set of moral principles by which people conduct themselves personally, socially, or professionally

businessethics

a set of ideas about how a company should conduct business in relation to legal, social, and environmental issues

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socialresponsibility

the duty to do what is best for society

code of ethicsa statement that explains what a company or group believes is proper and improper conduct

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stakeholders

the various individuals or groups of people who have a direct interest, involvement, or investment in something

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The Impact of International Business

State or Provincial

Local

National

International

International business affects

countries on several levels.

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Local Level

People can buy products from firms around the world.

Customers expect local businesses to keep up with local and international trends.

Internet use makes the world of international business move faster.

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State or Provincial Level

State and provincial governments seek ways to sell regional products globally.

Businesses located in one state look to build relationships with international companies and national governments.

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National Level

Highly developed countries seek to keep a balance between exporting their products and importing products.

Countries with few natural resources or goods to export have trouble with economic stability.

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International Level

Taxes and tariffs can be imposed on a country that is gaining an unfair advantage by pricing its exported products too low.

A recession in one country can affect the economies of other countries.

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Ethics and Social Responsibility

Ethics exist to serve as guidelines for behavior.

ethics

a set of moral principles by which people conduct themselves personally, socially, or professionally

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Ethics and Social Responsibility

Business ethics have to do with doing “the right thing” in business.

business ethics

a set of ideas about how a company should conduct business in relation to legal, social, and environmental issues

Business ethics include practicing business legally, morally, and fairly.

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Ethics and Social Responsibility

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Social Responsibility

To promote social responsibility, businesses can:

social responsibility

the duty to do what is best for society

1. Eliminate negative activities.

2. Perform positive activities.

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Social Responsibility

A code of ethics might be created or sponsored by a company or profession.

code of ethics

a statement that explains what a company or group believes is proper and improper conduct

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Stakeholders

Business organizations have many stakeholders.

stakeholders

the various individuals or groups of people who have a direct interest, involvement, or investment in something

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Stakeholders

Stakeholdersin a

Business

employeeslabor unions

owners

stockholders

governmentssuppliers

customers

general public

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Stakeholders

Every ethical issue, from unfair wages to tax evasion, has a specific impact on a stakeholder group.

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Factors Affecting Ethical Decisions

Factors affecting ethical decisions include:

The culture and history of a country

Union issues

Government regulations

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Factors Affecting Ethical Decisions

Recall Name three factors that affect ethical decisions.

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Consequences

Some consequences of unethical decisions include:

Lawsuits

Government intervention

Jail

Loss of business partners internationally

Loss of customers

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Factors Affecting Ethical Decisions

Relate Do you think it is fair for one country to sell goods to buyers in other countries at much lower prices if companies in the seller’s home country pay low wages to employees?

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Local and Global Impacts

Global business has expanded with the Internet, technology, and transportation.

The growth of global business requires responsible action by businesses around the world.

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1.2

1. How does international business affect ordinary people?

on the local level, through offering new goods and services; on the state or provincial level, by representing local products internationally; on the national level, by impacting the nation’s economy

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1.2

2. What are ethics and social responsibility?

Ethics is a set of moral principles by which people conduct themselves; social responsibility is the duty to do what is best for the good of society.

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1.2

3. What are stakeholders?

individuals or groups of people who have a direct interest, involvement, or investment in something

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