Cross National Ethics and Social Responsibility

Chapter 2 goes into detail about the meaning of ethics and how they differ from country to country. What maybe acceptable here in the U.S. may not be applicable to the rest of the world. It also gets into the idea that a concept such as bribery could be legal in one country, but socially unaccepted. This can lead to informal punishment such as poor publicity, boycotts, and other detrimental things to a company.

The book further dissects the subject of bribery with the different forms. A Whitemail bribe is a payment made to an official that must do or omit doing something in violation of their lawful duty. A lubrication bribe is a payment to facilitate, expedite, or speed up routine government approvals or other actions or other actions to which the firm would be legally titled. Lastly, extortion is the opposite of a Whitemail bribe as the official is seeking payment from an individual or corporation.

There are several ways to avoid violating a host country's laws. Some tips the book offer are continuously learning about the cultures and/or hiring a local journalist to do a comprehensive local media search. It is very crucial to understand the repercussions of violating the laws and ethics when conducting business in another country.

The FCPA (Foreign Corrupt Practices Act) became law in 1977. The act had 2 main purposes which was to establish a worldwide code of conduct for any kind of payment by U.S. businesses to foreign government officials, political parties, and political candidates. The second purpose was to require appropriate accounting controls for full disclosure of firms transactions.

Though the FCPA constrains some businesses' competitiveness, these businesses have found a way around violating the FCPA such as making donations to build new hospitals or schools. By making donations, and not making payments to "private individuals"; these businesses are no longer violating the FCPA and actually are helping a community. This is a great alternative to bribery and enhances their corporate giving initiatives.

An important part of chapter 2 is the cross-national social responsibilty concept. This is a "notion that corporations have an obligation to constituent groups in society other than stockholders and beyond that prescribed by law or union contract." This concept guides corporations to not only treat themselves fairly, but to cover the community, employees, and customers.

Terms

Cultural Relativism is an idea that no culture's ethics are any better than any other's.

Universalism is an idea of a rigid global yardstick by which to measure all moral issues.