Contemporary and future issues in business ethics

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BUS B368F
BUSINESS ISSUES AND ETHICS
Lecture 10
ï‚¡ Part 1: Introduction to business ethics
ï‚¡ Part 2: Business ethics in the business disciplines.
ï‚¡ Part 3: Contemporary and future issues in business ethics.
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COURSE OVERVIEW
ï‚¡ Part 3: Contemporary and future issues in business ethics:
â–ª Business ethics and the natural environment
â–ª Lecture 7
â–ª Business ethics and information technology
â–ª Lecture 8
â–ª Lecture 9
â–ª Business ethics and globalization
â–ª Lecture 10
â–ª Lecture 11
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COURSE OVERVIEW
Upon completion of Lecture 10, you should be able to:
1. Identify and discuss ethical issues that may arise in
international businesses.
2. Evaluate the implications of employees’ right to work for
international businesses.
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INTRODUCTION
Topics:
ï‚¡ Child labor
ï‚¡ Sweatshops
ï‚¡ Overseas outsourcing
ï‚¡ Migrant and illegal workers
ï‚¡ Discrimination, corrupt governments, and multinationals
ï‚¡ The right to work
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INTRODUCTION
ï‚¡ In domestic business environments, many people share
similar ethical frameworks on what businesses can and
cannot do.
ï‚¡ This framework is often shaped by shared external factors
such as national laws, education systems, cultural traditions
and cultural expectations.
ï‚¡ However, in overseas business environments, businesses
may face different external factors such as different national
laws.
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INTRODUCTION
ï‚¡ Due to globalization many businesses around the world,
especially multinational corporations (MNCs), experience
new types of ethical dilemmas. For example:
â–ª Should a business invest in a foreign country where human
rights are violated?
▪ Should a business follow a host country’s discriminatory
employment practices?
â–ª And how should a business act when the ethical standards in
the host countries are different than those followed in the
home country?
â–ª Whose ethical standards should prevail?
â–ª Should they use home country ethical standards?
â–ª Or host country ethical standards?
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INTRODUCTION
ï‚¡ The most challenging aspect of globalization is that there is
no single definition of “ethical” or “unethical”.
 No country’s or culture’s ethics is better than that of another
country or culture.
ï‚¡ This means that there are no global or international rights
and wrongs.
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INTRODUCTION
ï‚¡ Child labour is illegal in many parts of the world, but not
everywhere.
ï‚¡ Consequently, you may have heard of businesses that carry
out the manufacturing component of the production process
in developing countries, where child labour is legal.
ï‚¡ Child labor is not simply a matter of children working. Often
they are paid nothing or are charged more for their room and
board than they earn, making them bonded servants working
long hours in extremely poor conditions.
ï‚¡ Is this ethical?
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CHILD LABOR
ï‚¡ Sweatshops is a term that is broadly used to include a
variety of poor working conditions.
ï‚¡ Examples are dangerous and unhealthy working conditions,
both physically and psychologically, which enforce long
working hours with little pay.
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SWEATSHOPS
ï‚¡ You may know some major fashion brands that have been
linked to sweatshops.
 These brands’ headquarters and customers are based in
developed countries.
ï‚¡ But the production process is often carried out in developing
countries in sweatshops.
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SWEATSHOPS
ï‚¡ Many (famous) businesses use sweatshops. If we look at
sweatshops from a business perspective, it has the ability to
significantly reduce production costs, since businesses can
take advantage of the low-wage labor in developing
countries.
ï‚¡ Sweatshops, however defined, violate the human rights of
workers, and hence should be eliminated.
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SWEATSHOPS
ï‚¡ An increasing number of large and medium-size firms rely
on overseas outsourcing.
ï‚¡ But is it ethical to use overseas outsourcing?
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OUTSOURCING AND
INTERNATIONAL BUSINESS
ï‚¡ Different ethical perspectives on the ethically of overseas
outsourcing:
â–ª Some people think it is ethical when a company moves its
factory from one part of the country to another part of the
country in order to lower labor costs.
â–ª They would argue that although people in one part of the
country lose their jobs at the same it creates new jobs for
people in another part of the country.
â–ª So the overall benefit to the country balances out the harm
done.
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OUTSOURCING AND
INTERNATIONAL BUSINESS
ï‚¡ Different ethical perspectives on the ethically of overseas
outsourcing:
â–ª Yet when the same company moves for the same reasons but
from one country to abroad, many of these same people
judge the action as unethical.
â–ª They would argue that overall the country is harmed because
it adds to unemployment, reduces the national tax base, and
benefits the company at the expense of the country.
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OUTSOURCING AND
INTERNATIONAL BUSINESS
ï‚¡ Ethical arguments like these are one-sided and too narrow:
â–ª They only consider the outcomes for one particular company,
or the outcomes for individuals from a particular country.
â–ª A limitation of these types of ethical arguments is that they
fail to consider the outcomes for individuals in other
countries, or the world as a whole.
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OUTSOURCING AND
INTERNATIONAL BUSINESS
ï‚¡ In order to lower labor costs some businesses employ migrant
workers and illegal workers.
ï‚¡ Their work is often physically demanding, and their pay is low.
ï‚¡ These workers receive no retirement, no fringe benefits and no
health insurance.
ï‚¡ If housing is provided, it is often primitive and lacks basic
facilities.
ï‚¡ Many people are willing to migrate and even to work illegally in
another country, despite the hardship, because they can get
work which they could not get at home and the conditions may
be better than those they could find at home.
ï‚¡ But is it ethical that businesses employ migrant and illegal
workers?
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MIGRANT AND ILLEGAL
WORKERS
ï‚¡ Many companies do business in countries that have laws or
government policies that violate human rights.
ï‚¡ Some companies however do not feel comfortable doing
business in such countries.
â–ª A company of integrity cannot obey laws and practices that it
considers unethical.
â–ª Especially, when its business activities support the
continuation of such unethical acts.
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DISCRIMINATION, CORRUPT
GOVERNMENTS, AND MULTINATIONALS
ï‚¡ The right to work is recognized in the UN Declaration of
Human Rights.
 “Everyone has the right to work, to free choice of
employment, to just and favourable conditions of work and
to protection against unemployment.”
ï‚¡ The right is appropriately applied differently in different
societies, but is a right in all societies.
ï‚¡ Four dimensions of the right to work:
1. The right to work as a negative (also called liberty) right.
2. The right to work as a positive right.
3. The right to work as an individual right.
4. The right to work as a social right.
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THE RIGHT TO WORK
ï‚¡ Child labor
ï‚¡ Sweatshops
ï‚¡ Overseas outsourcing
ï‚¡ Migrant and illegal workers
ï‚¡ Discrimination, corrupt governments, and multinationals
ï‚¡ The right to work
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WHAT YOU HAVE LEARNED
â–ª Business ethics and globalization II
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NEXT LECTURE
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SEE YOU NEXT TIME!