Welcome!
Ethical challenges in International Management
Dr. Satyendra Singh
Professor, Marketing & International Business
Conference Chair, ABEM Conference
University of Winnipeg, CANADA
Many challenges relating to ethics
Corruption
Child labor
Human rights
Environment
Safety
…
2
3
Corruption?
Context
Western MNCs pay $80b to get contracts or concession (Hawley 2000)
$80b can eradicate poverty (UN)
Pay to get work done, greed, poverty…
Salary not enough
Corrupt individual and/or corrupt organization
Argument for corruption
Tax, commission, appreciation, gift, bonus, tip…
4
Arguments against corruption…
It ↓ GDP and undermines market economy
Decisions are based on corruption, not on price, quality, service, innovation…
Raises price for everyone 🡪 poor suffers
Corrupt officer 🡪 non enforcement of law eg environment
Divert resources from public services 🡪 schools and hospitals to dams…🡪 more scope for corruption
Poor does not get public services
Poor is further impacted
5
Consequences of being corrupt
Risk of accusation of corruption (proven or not) 🡪 loss of reputation
If pay bribe, ↑ demands likely, ↑difficult/costs of doing business
Competitor cheat also, employees/stakeholders lose trust
Govt may not trust companies, ↓ give assistance, ↑ audit transactions,
↑ expensive to do business, ↓ stock markets react negatively
Compromise personal beliefs
Need justification
Moral philosophies
6
Moral philosophies
Rawls’s social justice theory
Contractarian
Deontological
Teleological
Utilitarian
Pluralism
7
8
3 options for firms
1 Stay away
No country is perfect. Not everybody is corrupt. You lost huge opportunity. You did not try to impact locals. Black-listing a country is easy.
Find creative ways of doing business
2 Embrace local standards
Impact local culture. Develop ways to combat corruption.
Does context change your values?
3 Maintain high global standards
Global firms have global reputation. 100%FDI. Ethics officer. Whistle blower clause.
Fair trade. HO culture. Implement UN convention against corruption
9
UN Global Compact -- 10
Work against all forms of corruption
Corruption
the abuse of entrusted power for private gain
Extortion
When asking or demand is accompanied by threats that endanger the personal integrity or the life of the person
Bribery, Transparency International
gift, loan, fee, reward… from a person to do something dishonest, illegal or a breach of trust
UN steps to fight corruption
Internal: Anti-corruption policies within organizations
External: Report corruption in the annual Communication
Collective: Join forces with industry peers, stakeholders…
10
https://www.unglobalcompact.org
Child Labor (300m)
Poverty—survival 🡪 urbanization
If outlaw (Harkin Bill)
↓ Family income 🡪 ↓ labor supply
↑ Adult wage 🡪 children go to school
↑ skills 🡪 ↑ productive 🡪 ↑ wages
↑ family welfare if demand persists
But, ↑ wages 🡪 ↓ # of jobs
Effective only if children go to school
12
UN Global Compact -- 5
Abolition of child labor
ILO conventions 🡪 Minimum Age Convention No. 138
Minimum age for admission to employment or work
Developed countries Developing countries
Light Work 13 Years Light Work 12 Years
Regular Work 15 Years Regular Work 14 Years
Hazardous Work 18 Years Hazardous Work 18 Years
Children have distinct rights
Child labour is damaging to a child’s physical, social, mental, psychological and spiritual development
Deprives them of childhood, dignity; separates from families
13
https://www.unglobalcompact.org
Agencies – corruption and child labor
Transparency International
Foreign Corrupt Practices Act (US)
Corruption of Foreign Public officials (Canada)
OECD Anti-bribery Initiatives
Harkin Bill – Trade Ban
ILO Convention on Minimum Age138
UN Global Compact (UNGC 2007)
HR(2), Labor (4), Environment (3), Anticorruption (1)
14
Questions?�s.singh@uwinnipeg.ca