CHAPTER 3 Business and

Management in A
CLASS 9 Global Context
Dr. Howaida M. Barakat
Topic one:
Introduction to the global
business environment
3. Informal institutions: cultural,
social and ethical challenges

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One Fundamental Question
Laws,
Regulations,
Rules

Culture,
Ethics,
Norms

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 RELIGION AND ETHICS
• Religion is the system of shared beliefs and
rituals that are concerned with the realm of
the sacred.

• Closely related to religion are ethical systems

or sets of moral principles or values that guide
and shape behavior.

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 How Does Religion Affect Business?

Islam Christianity Hinduism Confucianism Buddhism

Supports free Material and Material and physical Personal salvation Stresses spiritual
enterprises. physical self-denial. self-denial. through right actions. achievement and
the afterlife.
Legitimate profits. Drive for Drive for Moral and ethical
Protect private entrepreneurial entrepreneurial conduct is important. a lack of emphasis
property. behavior not behavior not present. on entrepreneurial
present. Loyalty, reciprocal behavior.
Advocates for social Promotion or obligations, and
solidarity. additional honesty.
responsibilities not
desirable

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 How Does Religion Affect Business?
Religious beliefs and activities affect business through:

- Religious festivals,
- Daily and weekly routines that vary across religions (e.g., prayer times, sacred days,
fasts), and
- Activities and objects with symbolic values.

- Respect for other religions and associated values helps avoid conflict and
creates a basis for doing business.

- Religion shapes attitude toward work and entrepreneurship.

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 WHAT IS ETHICS?
Principles of right and wrong
A bridge between culture, language, and religion

Business ethics are the standards and norms governing the conduct of
business people

Ethical strategy is a course of action that does not violate these

principles.

what is ethical in one country may be unethical elsewhere.

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Approaches to dealing with ethics?
Friedman (1970) Ethics do not matter as long as law is followed

Peng and Meyer (2019) three approaches:

1. Ethical Relativism ‘When in Rome, do as the Romans do’
2. Ethical Imperialism ‘There is only one set of ethics and we have it’
3. Middle of the Road respect for human dignity and human rights, local
traditions, and institutional context.

Hill (2021) if a multinational company sees that other multinational companies

are not following ethical norms in a host country, so it should ignore the norms as
well.

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 Corporate Social Responsibility (CSR)
The consideration of, and
response to, issues beyond the
narrow economic, technical and
legal requirements of the
company to accomplish social
benefits along with the traditional
economic gains the company
seeks.

Environment Employment Practices Human Right Corruption

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 Institutions and CSR Strategies

Liberal market: companies are more open about their activities. So the CSR
strategy, will be done as explicit corporate activities dependent on the
expectations of different stakeholders of the company.

Coordinated market: CSR activities are much more implicit CSR takes place.
Otherwise, CSR activities are not only morally demanded but legally demanded.

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 Managers can do the following to encourage CSR activities:

• Hire and promote people with well-grounded personal ethics.

• Build an culture that places a high value on ethical behavior by
values, code of ethics.
• Offering incentive and rewards to those employees who behave in
an ethical manner.
• Put decision-making processes in place that require people to
consider the ethical dimension of business decisions.

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CASE STUDY
‘Marks and Spencer and corporate social responsibility’

To the
1.Why is the plan people,
A agenda soby the people,
important for theand
to Marks people
Spencer?
2.What do you see as the disadvantages and risks of giving ‘how we do
business’ such a central place in the company’s profile?
3.What could the company do even better?
4.Do you think the company’s approach is particularly profitable? How?

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Week 5 Question

REMEMBER
Q U EST I ON

• Use ‘TurnItIn’ to check for plagiarism,

Formal and informal institutions are important in shaping produce the report and send it along with
your submission.
business strategies for specific countries and markets.
• Cite your references using APA style
Describe, using examples, the major informal institutions
an international business needs to take into account in
designing its strategy.

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 Topic 1: Introduction to the global business environment
Chapter 3: Informal institutions: cultural, social and ethical challenges

3.6 CSR and Sustainability

Next Class 3.7 Corruption

Reading pages: 51 - 52

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Thank You
Dr. Howaida M. Barakat
Howaida.barakat@eue.edu.eg

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