Ethics & International Business

GAYATHRI P

INTRODUCTION

• ETHICS - moral principles that govern a person's behaviour or the conducting of an activity.

• INTERNATIONAL BUSINESS -  comprises all commercial transactions (private and governmental, sales, investments, logistics, and transportation) that take place between two or more regions, countries and nations beyond their political boundaries.

IMPORTANCE OF ETHICS IN INTERNATIONAL BUSINESS• Ethical behavior combined with skills &

professionalism to ensure sustainable development. Ethical behavior ensures awareness and concerns for future and for the right way of action in each particular situation

• Ethical behavior establishes a healthy & pleasant cooperation climate for all the parties involved in the deal

• Significance of competitive advantage in a particular market segment

GROWTH OF IB

• World trade has been growing so rapidly• Availability of capital through international source• Expansion of knowledge sector• Technological development• Information asymmetry

ETHICAL ISSUES IN IB PRACTICES

• Human Rights Violation• Prevalence of racial & sexual discrimination• Bribery• Selling of harmful products• Violation of IPR is unethical• Use of child labor

MNC'S & UNETHICAL IB

• MNC'S transfer jobs from high wage to low wage countries

• Consumers safety & warnings• Supporting the racial regime• MNC'S do not share the cost of social development

in the host countries

ETHICAL DILEMMAS IN IB

• Body language• Religious taboos• Perception of time• Cultural imperialism

DO'S OF IB

• Respect & protect human rights under all situations• Always follow the law of land , even if you don’t like them• Respect & obey Govt. orders• Use peaceful process of settlement of disputes, if any• Respect the religion of the country• Maintain honesty, integrity

DON’T’S OF IB

• Do not use dirty tricks for favourable negotiations• Do not be rude• Don’t boast of your culture• Don’t pollute the environment• Don’t pickup quarells unnecessarily with the

localemployees• Don’t offer or accept bribes• Don’t produce or circulate harmful products

METHODS OF ETHICAL DECISION MAKING IN IB• Method of ethical relativism• Imperialistic method• Method of compromise• Cosmopolitan global method• Donaldsons hyper – norms method

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