Ethics & Internat'l Business
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Transcript of Ethics & Internat'l Business
The Business Environment
Ethical Issues
• Standards of moral conduct that individuals and groups set for themselves
• Defines what’s “right” or “wrong”• Closely linked to personal values (beliefs
and attitudes)• Goes beyond state and federal laws
Business Ethics
• Business Ethics:
-collection of principles & rules for an organization
• Codes of Ethics address issues such as…– Accepting business gifts– Employee privacy– Using company property for personal use– Maintaining confidentiality
Business Scandals
• Tyco International – executive theft & prison sentence
• Enron – Accounting fraud
• Firestone Tire - use of child labor
• Deutsche Bank – spying
• Halliburton – overcharging government contracts
• BP – oil pipe breaking in the Gulf
What is Right or Wrong?
• Philosophers have debated for centuries• One approach is to ask…
“What is the value or worth of a specific behavior for society as a whole?”
• Answer: the best is that which does the most good for the most people
Ethical Issues Facing Business
• Deforestation that endanger species• Oil drilling off coast destroying natural
beauty• Quid-pro-Quo agreements • Discrimination in hiring practices
Social Responsibility of Business
• What is a business’s responsibility to help solve society’s problems?
• Firms are PROFIT-Seekers…but depend on society for resources, opportunities, and rights
• Stakeholders: all people affected firm’s actions(Owners, customers, suppliers, employees, creditors,
government and the public)
Enhancing goodwill in the community is now good business
INTERNATIONALEnvironment of
BusinessImportance - Forms - Theories
How many foreign-made items are you wearing today?
Check your clothing, backpacks, calculators,
pens & compare with your neighbor
International Business
• Business activities that occur between 2 or more countries
• Since WW2 internat’l trade has flourished• Mostly traded are goods- services make
up 1/5th of trade
Forms of International Business
• Imports: – buying goods made in foreign
country
• Exports: – selling products to buyers in
another country
Forms of International Business
Exchange Rate • The value of one country’s currency
expressed in the currency of another• These are constantly changing • Example:
– 1 USD = 0.7739 EUR
Forms of International Business
• Joint Ventures Abroad– Firms set up business in foreign country to
by sharing costs/profits with other companies
• Strategic Alliances are ↑ing– Firms agree to cooperate on certain aspects
while remaining competitors on other aspects
– (ex. China’s Sing and Yahoo)
Forms of International Business
• Wholly Owned Subsidiary– Firm sets up business abroad on its own – More expensive & more risky
• Multi-National Firms – Owns or controls production or service facilities
in more than 1 country -- Examples include:• Walmart – U.S.• Toyota – Japan• Shell (oil) – Netherlands• Deutsche Banke – Germany• AXA Group (insurance) – France
Government Policies
• Economists consider Free Trade desirable for a society
• Tariffs = taxes on foreign goods– Protect domestic industries (raises price of
foreign goods) – Raise revenue for Gov’t
• Dumping = export price that is “unfairly low”• Quotas – limit quantity of imports
Factors Supporting Trade
• World Trade Organization (WTO): – create & enforce rules – 153 members
• European Union (EU)– 25 countries– 11 countries merged currencies into the “euro”
Factors Supporting Trade
• NAFTA (North American Free Trade Agreement)
– 1992 Canada, U.S. and Mexico – Removed tariffs and trade barriers
• IMF (International Monetary Fund) & World Bank– Helps less-developed countries pay for imports– Provides low-cost loans to develop basic industries and
facilities (roads, electric power, etc)
**Advances in Communication & Transportation– Internet, faster/cheaper transportation, private
enterprise, and competition have ↑ed trade opportunities