copyright © 2011 pearson education part two comparative environmental frameworks international...
TRANSCRIPT
Copyright © 2011 Pearson Education
Part TwoComparative Environmental Frameworks
International BusinessEnvironments and Operations,
13/eGlobal Edition
5-1
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5-2
Chapter Five
Globalization and Society
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Chapter Objectives
• To identify problems in evaluating the activities of multinational enterprises (MNEs)
• To evaluate the major economic effects of MNEs on home and host countries
• To understand the foundations of responsible corporate behavior in the international sphere
• To discuss some key issues in the social activities and consequences of globalized business
• To examine corporate responses to globalization
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Evaluating the Impact of FDI
• FDI is Foreign Direct Investment
• The large size of some MNEs causes concern for some countries
• MNEs and countries need to understand the impact of FDI in home and host countries
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What MNEs Have To Offer
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Considering the Logic of FDI
• Need to consider relationship between those who make foreign investments (MNEs) and possible effects on receiving countries
• Areas to consider: Stakeholder trade-offs Cause-and-effect relationships Individual and aggregate effects
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The Economic Impact of the MNE
• Balance-of-Payments effects: Net import effect Net capital flow
• Growth and Employment effects: Home-country losses Host-country gains Host-country losses
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Why Companies Care About Ethical Behavior
• Instrumental in achieving two objectives: To develop competitive advantage To avoid being perceived as irresponsible
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The Cultural Foundations of Ethical Behavior
• Relativism vs. Normativism: do truths depend on the values of the groups or are there universal standards
• Negotiating between evils
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The Legal Foundations of Ethical Behavior
• Legal justification for ethical behavior may not be sufficient because not everything that is unethical is illegal.
• The law is a good basis because it embodies local cultural values.
• As countries tackle similar ethical issues, laws will become more similar.
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Ethics and Bribery
• Bribes are payments or promises to pay cash or anything of value
• Bribes are used to get government contracts or to get officials to do what they should be doing anyway
• Problems with bribery: Affects performance of company & country Erodes government authority Damages reputations when disclosed Increases cost of doing business
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Where Bribes Are (and Are Not) Business as Usual
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What’s Being Done About Corruption?
• Cross-National Accords: The OECD, the ICC, and the UN
• The U.S. Foreign Corrupt Properties Act
• Industry Initiatives
• Relativism, the Rule of Law, and Responsibility
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Ethics and the Environment
• Sustainability
• Global Warming and The Kyoto Protocol National and Regional Initiatives Company-Specific Initiatives
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Future: How to See the Trees in the Rain Forest
• The Amazon rain forest accounts for 1/3 of the world’s remaining tropical forest
• Kyoto Protocol proposes reforestation to reduce greenhouse emissions
• Major Challenge: protect global environment while preserving Brazil’s sovereignty over resources
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Ethical Dilemmas and the Pharmaceutical Industry
• Tiered pricing and other price-related issues
• WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
• R&D and the Bottom Line
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Ethical Dimensions of Labor Conditions
• Ethical Trading Initiative
• The Problem of Child Labor
• What MNEs Can and Can’t Do
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Sources of Worker-Related Pressures in the Global Supply Chain
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Corporate Codes of Ethics
• Motivations for Corporate Responsibility
• Developing a Good Code of Conduct
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