Ethical

ETHICAL PROBLEMS IN INTERNATIONAL BUSINESS

Getz (1990: 567-577)  analyzed international codes of conduct in four entities: (1) the Organization for Economic Cooperation and Development (OECD), which is the primary policymaker for industrialized nations, (2) the International Chamber of Commerce (ICC), which is concerned with fair treatment among multinational corporations, (3) the International Labor Organization (ILO), which is concerned with direct investment in developing countries, and (4) the Center for Transnational Corporations (CTC), whose  objective  is to maximize the contributions of transnational corporations to economic development and growth and to minimize  the negative effects of the activities of these corporations. These various codes were developed in order to establish order among multinational corporations; although, some organizations refuse to abide by these codes,   mainly because national governments have not sanctioned them completely.  Without uniform and full enforcement, multinational organizations could have rampant choice in international ethical issues.  Underlying this lack of consensus is the issue of national as well as corporate culture (See Hofstede, 1980: 46-47). Every nation is different and every multinational organization is in one way or another distinct in the way they do business, especially in other countries.

In addition to these codes, the moral corporation should address human rights and whistle blowing and the international ethics code under which it operates. These issues are not very new. In a survey of 300 multinational corporations, 80 percent agreed with seven items being ethical issues for business:  (1) employee conflict of interest, (2) inappropriate gifts to corporate personnel, (3) sexual harassment, (4) unauthorized payments, (5) affirmative action (6) employee privacy; and (7) environmental issues (Brooks, 1989; Berenheim, 1987, 1989: 117-129).

ETHICAL CLIMATE & ETHICAL PROBLEMS

Strategies, such as these codes of ethics, are only one means of achieving the ultimate goal of having ethical international responsibility in the engagement of business worldwide.   As stated above, there are many ethical responsibilities   faced by multinational organizations. Theorists generally agree that situational variables such as organizational climate can affect ethical behavior of individuals (Kelly et al., 1989: 327-340).  However, there have been no attempts to study the relationship of ethical climate of an organization and ethical behavior of its members. Ethical climate, it must be emphasized, is not the same as culture is commonly perceived, but rather a broader concept of culture (Schein, 1990, pp. 109-119).  Culture is believed to be more associated with deeper beliefs, values and assumptions (Denison, 1996, pp. 619-654). Therefore, just as one can value an individual’s culture by his or her actions and personal activities, ethical climate can be observed on a larger scale; in this case, the organization.  Ethical climate is, in essence, the employee’s perception of the norms of an organization (Bartels et al.1998: 799-804).

As Bartels and others have shown (1998:799-804), organizations with a strong ethical climate experienced few serious ethical problems, and were more successful coping with such  problems. Their research suggests that it is imperative for managers to consider developing strong

ethical climates if they aim to provide organizational members the ability to handle ethical dilemmas and to avoid any inherent liabilities.  Managers must create and maintain a clear and strong set of norms to promote good ethical behavior.  

In this approach, a person’s own beliefs and values and their influence on his/her perception and behavior are not taken into account. Nonetheless, ethical climate is a very potent tool in steering the behavior of an organization’s members.  As Mahdavi has shown (2003, 2005), an organization’s codes of ethics and enforcement of rules go a long way to control and direct behavior of social entities.   

Based on the above discussion, global corporations must recognize the need for a uniform code of business ethics since without such a code, behavior of actors in this arena remains unpredictable. Furthermore, national governments must realize that probably the most effective  means of protecting their citizens, their national interests, and the global environment against the ravages of the over-reaching global business rest in the development, adoption and enforcement of such a code. Until then, it is not realistic to hope for any such international agreement to be adopted.

However, a growing momentum for such a movement is observable. As stated in previous pages, international organizations, especially those involved in international business, finance, labor, economics and environment are developing rules and policies that can be regarded as the building blocks of a universal code of business ethics. Until such a uniform body of rules is drawn, signed and enforced, global corporations and organizations will be doing well to develop their own codes of conduct, applicable to all of their officers regardless of location.

An international business strategy approach

Globalization and development:  an international business strategy approach

The early debate on the role of foreign direct investment (FDI) in developing countries has been neatly characterized as “colourful and fluid” (Balasubramanyam, 1985, p. 159).  One reason for the colourfulness of this debate was its emergence within the politically-charged birth of development economicsper se and related attempts to co-opt it into disparate wider p o l i t i c a l - e c o n omi c   p o s t u r e s T h i s   p o i n t s   f o rwa r d   t o  my, hopefully calmer, concern here with the parallel need to evaluate t r a n s n a t i o n a l   c o r p o r a t i o n s   ( TNC s )   a s   p a r t i c i p a n t s   i n   t h e processes of globalization.  Another factor in leaving the early debates open and fluid was the lack of a commonly agreed methodology   for   analyzing,   in a convincing   manner an observable mode of international transaction (FDI) with an obvious potential for a wide-ranging diversity of often intangible or unmeasurable implications.  This meant that much early analysis of the developmental effects of FDI fractured around detailed investigations of specific aspects of a wide range of separate areas of concern (e.g. extent and appropriateness of technology transfer;  job generation and employment conditions; the allegation of decapitalization; balance-of-payments and trade effects;  bargaining mechanisms;  spillovers; industry structure). The  emergence of a separate analysis of the TNC (as the principal source  of  FDI )  and its  immediate  association with market imperfections further undermined attempts (e.g. MacDougall,1960) to formalize the evaluation of FDI around the constructs of orthodox trade theory and, in particular, perfect competition.

If  early  theorizing of   the  TNC helped  to  explain  the indecisiveness of attempts to evaluate the implications of FDI, then the subsequent analysis of these firms, now most usefully positioned at the interface of business strategy and economics, provides methodologies that are highly attuned to elucidation of issues of globalization and development.  Central to this analysis, and to the lines of argument developed here, is a preference for organizing an understanding of diversity, rather than simplifying it or assuming it away.  Two vectors of diversity define the structure of our subsequent analysis.

Firstly, the aims of an evaluation of TNCs in a globalized economy are seen as still having logical origins in the diversity of concerns addressed in early analysis of FDI.  However, to organize these into a more functional structure, I suggest that these variegated concerns can be subsumed into an evaluation framework of four distinct generic issues (Dunning and Pearce, 1994).  Within globalization, the opening of national economies (with an increasing freedom of trade) has been interpreted as a l lowing TNCs   to  improve   the  ways   in which productive resources are used, so that efficiency becomes an element of the framework through which we evaluate their performance.  By contrast the “flexibility and adaptability” (Balasubramanyam,1985, p. 160) provided to TNCs by globalization may limit their need for positive embeddedness in the growth and development processes of individual national economies.  This provides another concern for the evaluation framework.  However, an important insight of analysis of the growth of TNCs was thatorganizing globally through “an internal bureaucracy of the enterprise transcending the market” (Balasubramanyam, 1985,p. 161) gave them powers “in areas of pricing of products and technologies”, and in bargaining more generally, that raised issues of the distribution “of gains between [TNCs] and host countries”; furthermore, these characteristics of TNCs give them control over dispersed elements of a global strategy that can be “seen to pose a threat to the economic sovereignty of new nation states in the Third World” (Balasubramanyam, 1985, p. 161). The core of this article, therefore, seeks to evaluate the implications of TNCs in terms of the four broadly-defined issues of efficiency, distribution, sovereignty,   and   growth and development. To do this, it is useful to characterize the strategic posture of the contemporary TNC as one of seeking to use the increasing freedoms of international transfers, reflecting the essence of economic globalization, to leverage the differences between  economic are as. Such are as may,  in practice,  be national   economies ( especially  where  policy  factors   are influential), regions defined by the capacity to support costeffective production, or the type of technology- and skill-based agglomerative clusters that build around creative interdependencies and tacit-knowledge spillovers (Porter, 1998, chapter 7 ;     Birkinshaw and  Hoo d,  2000; Cantwell  and lammarino,1998; Balasubramanyam and Balasubramanyam, 2000).

Employers and business

A county's health affects its economic competitiveness. Achieving lower health care costs, fewer sick days, and increased productivity are all critical to economic growth.  Here are some basic ways you can help:

·         Make your business a healthy place to work, e.g., offer physical activity plans and smoking-cessation programs to your employees, offer healthy foods in your cafeteria, and motivate employees to make healthy choices through financial incentives.

·         Encourage employee fitness by subsidizing gym memberships, offering onsite gym facilities, and promoting use of stairways.

·         Educate all managers about the link between employee health and productivity.

Here are some other ways you can help:

·         Get the word out. Reach out to people you know and see every day about the County Health Rankings report, e.g., at a local Chamber of Commerce breakfast or a staff meeting.

·         Organize. Meet with other local leaders and community residents to discuss barriers to health and ways to overcome them. Host a town hall meeting or invite people to one.

·         Get policymakers to pay attention. Tell them about how their county or counties ranked and open a dialogue about ways to improve health in your community.

·         Be an advocate. Step out as a leader in your community’s efforts to prevent illness and promote health.

·         Contact your local public health department about participating in a local task force or, if none exists, organize one to tackle these pressing issues in your community.

·         Ask your local or state health department about what they’re doing in response to the report to make sure you aren’t duplicating efforts.

·         Share your resources. Offer your time, staff, and/or funding with community partners. These are resources that can go toward community plans and programs aimed at tackling factors that affect health.

·         Communicate your message. Write an op-ed or talk to local media about the Rankings and what needs to be done to improve the health of your community.

·         Start a conversation. Talk to your friends, colleagues, neighbors, and family members about the health of your community and what everyone collectively can do to make it healthier.