Businees Ethics, Stakeholder Management,

and Multinational Coporations in the Global

Environment
 s
What do we mean by globalization?

Globalization is about risks as well as about opportunities. We must

deal with thes risks at the national level by managing adjustment
processes and by strengthening social,structural, and financial
systems.
We cannot turn back gloalization. Our challenge is to make
globalization an instrument of opportunity and inclusion not of fear
and inscurity. Globalization must work for all.
 The Connected Global Economy and
Globalization

the technological,cultural,production,and political factors have to date

accelerated global integration. Some of these forces include:

• The end of communism, which has allowed the opening of closed economies
• Information technologies and the internet continue to accelerate communication
and producivity within and across companies globally. Today it fairly easy for any
company to globalize using the internet
• Enterpreneurship and enterpreneurs are more mobile,skilled,intelligent and thriving
worldwide.
• A shift to servic economies and knowledge workes using technologies has also
propelled innovation and productivity worldwide
global competitive tactics that set a standard
for growing in developing nations

1. Methodically build a presense from the ground up

instead of planning megaprojects,take ovvers,and
acquisitions

2. Doextensive homework befor starting a business in

he developing country by consultingwith and
learning,from local stakeholders.
3. Forget about targeting the richets 10% of the global
populasion and then marketing to them

4.
Introduce and help slimulate product use
with local populations.
7.3 Issues With Globalization: The Dark
Side
Crime and Corruption

Economic Poverty and Child Slave Labor

The Global Digital Divide

Westernization (Americanization) of Cultures

Loss of Nation-State Sovereignty
Multinational Enterprises As
Stakeholders

Multinational enterprises (MNEs) are

corporations that “own or control
production or service facilities outside the
country in which they are based.”
Common characteristics of MNEs include:
Operating in at least two countries
Earning an estimated 25 to 45 percent of revenue
from foreign markets
Multinational Enterprises As
Stakeholders

The companies benefit their host countries by:

• Hire local labor
• Create new jobs
• Co-venture with local entrepreneurs and companies
• Attract local capital to projects
• Technology transfer
• Provide business skills and learning
• Increase industrial output
• Intensify competition
• Help decrease debt and improve standard of living
Multinational Enterprises As
Stakeholders

Six criticisms of the presence and practices of MNEs in

host and other foreign locations include:
• Dominate and protect their core technology
• Destabilize national sovereignty
• Create a “brain drain”
• Create an imbalance of capital outflows over inflows
• Disturb local government economic planning
• Destroy, pollute, and endanger host-country and LDC
environments
Multinational Enterprises Guidelines for
Managing Morality
DeGeorge Specifically offers the following guidelines that multinationals can use in
dealing with LDCs:
1. Do no intentional harm
2. Produce more good than harm for the host country
3. Contribute to the host country’s development
4. Respect the human rights of their employees
5. Respects the local culture; work with, not against, it
6. Pay their fair share of taxes
7. Cooperate with the local government to develop and eforce just backgrounds
institutions
8. Majority control of a firm includes the ethical responsibility of attending to the
actions and failures of the firm
9. Multinationals that huild hazardous plants are obliged to ensure that the plants are
safe and operated safely
10. Multinationals are responsible for redesigning the transfer of hazardous
technologies so that such technologies can be safely administered in host countries
Others recent deelopments imvolving global companies and business
ethics include the following :
1. Global companies are developing and using core principles
relevant to their business practices
2. Codes of ethics with minimum social responsibility standards (e.g.,
gender discrimination and environmental responsibility) are being
adopted and employees trained on them
3. A broad consensus for ethical requirements is being articulated.
4. Some classic guidelines that continue to influence policies and
practices of global companies are presented next. The following
MNE guidelines are summarized under the categories of
employment practices and policies, consumer protection,
environmental protection, political payments and involvement,
and basic human rights and fundamental freedoms.
Some classic guidelines that continue to influence the policies and
practices of global companies are presented next. The following MNE
guidelines are summarized under the categories of employment
practices and policies, consumer protection, environmental protection,
political payments and involvement, and basic human rights and
fundamental freedoms
a. Employment practices and policies
b. Consumer Protection
c. Enviromental Protection
d. Political Payments and Involvement
e. Basic Human Rights and Fundamental Freedoms
 The guidelines serve as broad bases that all international
corporations can use to design specific policies and procedures; these
corporations can the apply their own policies and procedures to such
areas as “child care, minimu wages, hours of work, employee training
ang education, adequate housing and health are, pollution control
efforts, advertising and marketing activities, severance pay, privacy of
employees and consumers, information concerning on the job hazard”
External Corporate Monitoring Group

Amnesty International (promotes and advocates human rights)

OECD (developed Guidelines for Multinational Enterprises)
International Labor Organization (publishes and works in the area of human
rights)
NGos (combat corruption, assure adequate labor conditions, and establish
standards for economic responsibility)
Transparency International(monitors and publishes the international
Corruption perception Index)
Individual Stakeholders Methods for
Ethical Decision Making
De George offers the following general tactics that serve as a basic start for
preventing, as well as solving, ethical dilemmas internationally

1. Don’t violate the very norms and values that you want to preserve and that
you use to evaluate your adversary's actions to be unethical.
2. Use your moral imagination, because there are no specific rules for
responding to an ethical opponent.
3. Use restraint and rely on those to whom the use of force is legitimately
allocated when your response to immorality involves justifiable force nr
retaliation.
4. Apply the principle of proportionality when measuring your response to an
unethical opponent.
5. Use the technique of Ethical displacement when responding to unethical
threes.
6. Use publicity to respond to an unethical practice, adversary or system.
Corruption, unethical and illegal practices and actions, operates best in the
dark.
Four Typical Styles of International
Ethical Decision Making

1. Foreign Country style : a company applies the values and norms of its local
host- "when in Rome, do as the Romans do";
2. Empire Style : a company applies its own domestic values and rules; this can
be an imperialistic practice, 3.Interconnection style : a company applies shared
norms with other companies and groups; national identities and interests are
transcended and blurred, as when states make commercial decisions and rely
on NAFTA or the EU members to offer agreed-on processes and solutions, and
4. Global style : a company abstracts all local and regional differences and
norms, coming up with a more cosmopolitan set of standards and solutions for
its actions in the host country.
Cross-Cultural Negotiation Styles

-Time Considerations (monochronic or a polychronic culture)

-Formal Versus Informal Negotiation Styles
-Negotiation Objectives
-Eye Contact
Hypernorms, Local Norms, and Creative
Ethical Navigation

Hypernorms are principles so fundamental that, by definition, they serve to

evaluate lower-order norms, reaching to the root of what is ethical for
humanity. They represent norms by which all others are to be judged. " Hyper
norms relate to universal rights : for example, the right not to be enslaved, the
right to have physical security, the right not to be tortured, and the right not to
be discriminated against.