Ethical issues in

international business

Ethical issues in international business arise due to

differences in cultural, social, and legal frameworks
across countries. Companies operating globally
must navigate these complexities while maintaining
ethical standards. Here are some common ethical
issues in international business:

Labour standards and

human rights
Companies face ethical dilemmas when operating in countries with poor
labor standards or human rights records. Issues may include exploitative
working conditions, child labor, forced labor, and violations of workers'
rights. Businesses must ensure fair treatment of workers and comply with
internationally recognized labor standards.
e and Sweatshop Labor
Case study-
Nike and Sweatshop Labor
In the 1990s, Nike faced significant criticism for its use of sweatshop labor in
countries like Indonesia and Vietnam. The company was accused of employing
workers in poor working conditions, paying low wages, and violating labor
standards. The case highlighted the ethical dilemma faced by multinational
corporations when operating in countries with lax labor regulations. Nike faced
protests and boycotts, eventually leading the company to implement changes in
its supply chain to improve labor conditions and transparency.
Corruption and bribery
Corruption and Bribery- Corruption and bribery pose significant ethical
challenges in international business. Companies may encounter demands
for bribes, kickbacks, or facilitation payments to secure contracts,
permits, or favorable treatment. Resisting such practices and promoting
transparency and integrity is crucial for ethical business conduct.
Case study
Case Study- Siemens and the Bribery Scandal
In 2006, Siemens, a German multinational company, was embroiled in a massive bribery
scandal. The company was found to have paid bribes to secure contracts in various
countries, including Argentina, Greece, and Iraq. The case demonstrated the ethical
challenges posed by corruption in international business. Siemens faced legal
consequences, hefty fines, and reputational damage. The scandal prompted the company
to implement stricter compliance measures and internal controls.
Environment impact
International businesses face ethical responsibilities regarding their
environmental impact. Activities such as pollution, deforestation, and
unsustainable resource extraction can have long-term consequences
on local communities and ecosystems. Adopting environmentally
friendly practices and supporting sustainability initiatives are
important ethical considerations.

 Case study
BP Deepwater Horizon Oil Spill
In 2010, the Deepwater Horizon oil rig, operated by British Petroleum (BP),
suffered a catastrophic explosion, resulting in one of the largest marine oil spills in
history. The incident caused significant environmental damage to the Gulf of
Mexico ecosystem, wildlife, and coastal communities. BP faced immense backlash
and legal consequences for its inadequate safety measures and environmental
negligence. The case highlighted the ethical responsibility of companies to
prioritize environmental stewardship and safety in their operations.
Intellectual property rights
Intellectual property (IP) infringement is a concern in international
business, particularly in countries with weak IP protection.
Companies must respect and protect the IP rights of others while
safeguarding their own. Unauthorized use or theft of patents,
trademarks, copyrights, or trade secrets can lead to legal and
ethical repercussions.

 Case study
Apple vs. Samsung Patent Disputes
Apple and Samsung engaged in a series of high-profile legal battles over patent
infringement claims related to smartphones and tablets. Both companies accused
each other of copying design features and functionality. The case shed light on the
ethical issues surrounding intellectual property rights in international business.
Companies need to respect and protect the intellectual property of others while
defending their own innovations within the bounds of legal frameworks.
Fair trade and supply
chain effect
Ensuring fair trade practices throughout the supply chain is an ethical
imperative for international businesses. Issues such as unfair wages,
exploitation of suppliers, unsafe working conditions, and the use of conflict
minerals demand attention. Upholding responsible sourcing, transparency,
and fair treatment of suppliers are essential ethical considerations.
 Case study
Rana Plaza Factory Collapse
In 2013, the Rana Plaza garment factory building in Bangladesh collapsed, resulting in
the death of over 1,100 workers. The incident brought attention to the poor working
conditions, lack of safety measures, and low wages prevalent in the global garment
industry. International fashion brands, such as Primark and Benetton, were
implicated in the supply chain as they sourced products from the factory. The case
highlighted the ethical responsibility of companies to ensure fair and safe working
conditions throughout their supply chains and prompted calls for greater
transparency and accountability.
 Culture sensitivity and
diversity
Companies operating internationally must respect cultural diversity
and avoid practices that may be offensive or discriminatory. Ethical
considerations include ensuring equal opportunities, avoiding
cultural stereotypes in advertising, and respecting local customs,
beliefs, and traditions.
 Case study
PepsiCo's Ad Controversy in China
In 2017, PepsiCo faced backlash in China for an advertisement that was
perceived as culturally insensitive. The ad featured American model
Kendall Jenner participating in a protest and offering a Pepsi to a police
officer, drawing criticism for trivializing social movements. The case
illustrated the importance of cultural sensitivity in international
marketing and the ethical responsibility of companies to avoid
perpetuating cultural stereotypes or trivializing sensitive issues.
 Political influence and
lobbying
The influence of corporations on government policies can raise
concerns about transparency and accountability. An example is
the lobbying efforts of the fossil fuel industry to influence
climate change policies, which have been criticized for impeding
progress toward renewable energy and environmental
sustainability.
 Case study
In 2010, allegations of corruption and irregularities emerged regarding the allocation of
2G spectrum licenses during the tenure of the then-Telecommunications Minister, A.
Raja. It was alleged that certain telecom companies had manipulated the licensing
process to secure spectrum licenses at significantly undervalued prices, causing a
potential loss of billions of dollars to the Indian government. Investigations revealed a
complex web of corruption and collusion involving politicians, bureaucrats, and
corporate entities. It was alleged that telecom companies used their political
connections and engaged in lobbying activities to influence government officials and
secure favorable treatment in the spectrum allocation process.
Privacy and data protection

As data collection and digitalization expand, protecting individuals' privacy and

securing data becomes paramount. The Facebook-Cambridge Analytica scandal in 2018,
where personal data of millions of Facebook users was harvested without consent,
underscored the need for stronger data protection regulations.
 Case study
The Facebook-Cambridge Analytica scandal in 2018 involved the
unauthorized access and misuse of personal data from millions of
Facebook users. The incident raised ethical concerns regarding data
privacy and consent. It highlighted the need for companies to
prioritize the protection of user data, obtain informed consent, and
implement robust safeguards. The scandal led to increased scrutiny,
regulatory actions, and discussions on data privacy rights.

Thank you!