Sustainable managementMetropolia, Business Ethics IP week

8 CSR and International Business

Say your business is CSR,Would you do business in?

n United Arab Emiratesn High risk of gender issues

n Ukrainen High risk of bribery/extortion

n Myanmar (Burma)n High risk of unintended support to totalitarian

regimen China

n High risk of labour/environment issues, intellectual property rights infringement.

OECD guidelines for MNE

n General policiesn PPP, human rights, capacity building,

stakeholder management, corporate conductn Disclosure

n Transparent reporting; timely, regular, reliable, and relevant information

n Employmentn Trade unions, no discrimination, no child

labour, no compulsory labour

OECD guidelines for MNE

n Environmentn Not only natural environment, also public

safety and health, environmental management system, education and training in these matters

n Combating Briberyn Not offer, (in)direct, promise, give or demand

bribes leading to improper advantagen Consumer Interests

n Ensure safety, quality of goods and servicesn Let consumers be heard

OECD guidelines for MNE

n Science and technologyn Transfer and diffusion of technologies, with

regards to intellectual property rightsn Competition

n Refrain from anti-competitive agreement among competitors

n Taxationn Contribute to public finances, by timely tax

liability payments

Ethics in International Business

n May (or should) western business adapt to local conditions?n Pay minimum wage in low wage country?n (Minimum wage is often below minimum

subsistence level?)n And benefit from poor developed governance?n Also when the local conditions are against

your own ethics?

Culture in International Business; Geert Hofstede

1. Power distance2. Collectivism vs. individualism3. Femininity vs. masculinity4. Uncertainty avoidance5. Long Term Orientation

Country PDI IDV MAS UAI LTO

Finland 33 63 26 59

Sweden 31 71 5 29 33

Netherlands 38 80 14 53 44

China * 80 20 66 30 118

Arab World ** 80 38 52 68

West Africa 77 20 46 54 16

Colombia 67 13 64 80

Cultural relativism

“This is how things are done around here”“When in Rome do as the Romans do”

Cultural relativism: what’s morally right/wrong in one culture, need not to be right/wrong in another culture

n But this poses problems:n Some actions will be condemned by everyonen A number of moral rules can be universally

endorsed; do not lie, steal, kill etc.

Cultural determinism

n Is untenable for some reasonsn Cultures are not homogenous; there is always

diversity, not all values and norms are share equally by all members

n Cultures are not closed; it is not static but they change, e.g. globalization

n Often relativism is claim for tolerance, but itself is typical western cultural assumption, based upon liberal ideas; cultures do clash sometimes

Corruption & Transparency

94 95 96 97 98 99 00 011993 02 03 04 05 06

1993Transparency

International (TI) Founded

1995TI Corruption

Perception Index (CPI) released

1996UN Declaration Against Bribery and Corruption

adopted

2002Business Principles for Countering

Bribery Launched

2003Extractive Industries

Transparency Initiative (EITI) launched

2003UN Convention

Against Corruption adopted

2003TI Global Corruption Barometer launched

2004Anti-corruption added as 10th

principle of UN Global Compact

2006TI Bribe Payers Index launched

2002Publish What You Pay campaign

launched

Terminology

n Bribing officials is a felony in all countries in the world

Acc. to Dutch penal code art. 177: He who presents a civil servant with a gift or promises a gift, or renders him a service with the aim of making him do or not do something, contrary to his duty

n Bribery; payment is offeredn Extortion; payment is askedn Grease payments; for smooth process within

dutyn Gifts; to express regards and respect, to build

up trust and personal to business relationships

Gift vs. Bribes

n Would you accept a bottle of wine as gift?n And if it is worth 50,- €?

n Regulation creates grey areas.n Usefull guideline questions are

n Do you dare to admit that you got it?n Is the gift in proportion to the relationshipn Do you feel that you are obligated somehow in

the future?

Transparency International

n Corruption Perception Indexn List of 180 countries on perceived levels of public sector

corruption . By 14 expert opinions.

n Bribe Payers’ Indexn Supply side of corruption, ranks 15 countries and 17 industry

sectors

n Global Corruption Indexn Public opinion survey of perception and experience of

corruption in more than 60 countries.

From Bribe Payers Index