Fluent Essays

Using the material from the textbook, define and discuss a values-based leadership approach to organizational behavior. Explain how satisfying the needs of the internal stakeholders can enhance corporate culture. Review the purpose and establishment of mission, vision, and values in this approach. Discuss the importance of strategic alignment and the classical visionary approach of built-to-last companies. Analyze and explain how corporate mission, vision, and values improve corporate exposure and profit. Finally, compare and contrast two other ideas of a values-based leadership approach with your own. Where do your ideas connect? Where do they differ? Support your ideas with scholarly sources cited in APA style. Business Ethics: A Stakeholder and Issues Management Approach Weiss, Joseph W 8 Stakeholder Management in the Global Environment 547 8.6 MNEs: Stakeholder Values, Guidelines, and Codes for Managing Ethically Guidelines for managing international ethical conduct have received detailed attention and eff ort over the past four de cades in the areas of consumer pro- tection, employment, environmental pollution, human rights, and po liti cal conduct.111 Figure 8.6 illustrates issues and ethical concerns that MNEs must manage. The driving institutional forces behind the development of global ethical values, published guidelines, and universal rights include the UN, the ILO, the OECD, the Ceres Principles, the Conference Board, and the Caux Round Table Principles for Business. The underlying normative sources of the guidelines that these global orga- nizations have developed include beliefs in (1) national sovereignty, (2) social equity, (3) market integrity, and (4) human rights and fundamental freedoms.112 Richard DeGeorge specifi cally off ers the following guidelines that MNEs can use in dealing with LDCs: 1. Do no intentional harm. 2. Produce more good than harm for the host country. 3. Contribute to the host country’s development. 4. Respect the human rights of their employees. 5. Respect the local culture; work with, not against, it. 6. Pay their fair share of taxes. 7. Cooperate with the local government to develop and enforce just background institutions. 8. Majority control of a fi rm includes the ethical responsibility of attending to the actions and failures of the fi rm. 9. Multinationals that build hazardous plants are obliged to ensure that the plants are safe and operated safely. 10. Multinationals are responsible for redesigning the transfer of hazardous technologies so that such technologies can be safely administered in host countries.113 Other developments involving global companies and business ethics in- clude the following: (1) global companies are, as discussed earlier, developing and using core principles relevant to their business practices; (2) codes of eth- ics with minimum social responsibility standards (e.g., gender discrimination and environmental responsibility) are being adopted and employees are being trained on them; and (3) a broad consensus for ethical requirements is being articulated. The Conference Board, a global network of businesses, academic institutions, governments, and NGOs in more than 60 countries, is working to defi ne global business practice standards, core principles for doing business across cultures, and the requirements for the support of and cooperation be- tween business and nonbusiness institutions.114 Some classic guidelines that continue to infl uence policies and practices of global companies are presented next. The following MNE guidelines are sum- marized under the categories of employment practices and policies, consumer Co py ri gh t © 2 01 4. B er re tt -K oe hl er P ub li sh er s. A ll r ig ht s re se rv ed . Ma y no t be r ep ro du ce d in a ny f or m wi th ou t pe rm is si on f ro m th e pu bl is he r, e xc ep t fa ir u se s pe rm it te d un de r U. S. o r ap pl ic ab le c op yr ig ht l aw . EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 8/27/2020 1:03 PM via SOUTHERN NEW HAMPSHIRE UNIV AN: 667095 ; Weiss, Joseph W..; Business Ethics : A Stakeholder and Issues Management Approach Account: shapiro 548 Business Ethics protection, environmental protection, po liti cal payments and involvement, and basic human rights and fundamental freedoms.115 Employment Practices and Policies • MNEs should not contravene the workforce policies of host nations. • MNEs should respect the right of employees to join trade unions and to bargain collectively. • MNEs should develop nondiscriminatory employment policies and promote equal job opportunities. • MNEs should provide equal pay for equal work. • MNEs should give advance notice of changes in operations, especially plant closings, and mitigate the adverse eff ects of these changes. • MNEs should provide favorable work conditions, limited working hours, holidays with pay, and protection against unemployment. • MNEs should promote job stability and job security, avoiding arbitrary dismissals and providing severance pay for those unemployed. • MNEs should respect local host- country job standards and upgrade the local labor force through training. • MNEs should adopt adequate health and safety standards for employees and grant them the right to know about job- related health hazards. • MNEs should, minimally, pay basic living wages to employees. • MNEs’ operations should benefi t the low- income groups of the host nation. • MNEs should balance job opportunities, work conditions, job training, and living conditions among migrant workers and host- country nationals. Consumer Protection The following two items summarize best ethical and socially responsible practices for protecting consumers in a host country: • MNEs should respect host- country laws and policies regarding the protection of consumers. • MNEs should safeguard the health and safety of consumers by various disclosures, safe packaging, proper labeling, and accurate advertising. Environmental Protection The following items summarize best ethical and socially responsible practices for protecting a host country’s environment: • MNEs should respect host- country laws, goals, and priorities concerning protection of the environment. Co py ri gh t © 2 01 4. B er re tt -K oe hl er P ub li sh er s. A ll r ig ht s re se rv ed . Ma y no t be r ep ro du ce d in a ny f or m wi th ou t pe rm is si on f ro m th e pu bl is he r, e xc ep t fa ir u se s pe rm it te d un de r U. S. o r ap pl ic ab le c op yr ig ht l aw . EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 8/27/2020 1:03 PM via SOUTHERN NEW HAMPSHIRE UNIV AN: 667095 ; Weiss, Joseph W..; Business Ethics : A Stakeholder and Issues Management Approach Account: shapiro 8 Stakeholder Management in the Global Environment 549 • MNEs should preserve ecological balance, protect the environment, adopt preventive mea sures to avoid environmental harm, and rehabilitate environments damaged by operations. • MNEs should disclose likely environmental harms and minimize the risks of accidents that could cause environmental damage. • MNEs should promote the development of international environmental standards. • MNEs should control specifi c operations that contribute to the pollution of air, water, and soils. • MNEs should develop and use technology that can monitor, protect, and enhance the environment. Po liti cal Payments and Involvement Two basic, foundational cautions that argue against MNE’s taking, giving, or being involved in any way with bribes and illegal payments and related poli- tics with host country representatives: • MNEs should not pay bribes or make improper payments to public offi cials. • MNEs should avoid improper or illegal involvement or interference in the internal politics of host countries. Basic Human Rights and Fundamental Freedoms The following items broadly summarize the general principles underlying universal human rights and fundamental freedoms of all people that should be observed by MNEs: • MNEs should respect the rights of all persons to life, liberty, security of person, and privacy. • MNEs should respect the rights of all persons to equal protection of the law, to work, to choice of job, to just and favorable work conditions, and to protection against unemployment and discrimination. • MNEs should respect each person’s freedom of thought, conscience, religion, opinion and expression, communication, peaceful assembly and association, and movement and residence within each state. • MNEs should promote a standard of living to support the health and well- being of workers and their families. • MNEs should promote special care and assistance to motherhood and childhood. William Frederick states that these guidelines should be viewed as a “collective phenomenon,” because all do not appear in each of the fi ve inter- national pacts they originated from: the 1948 UN Universal Declaration of Co py ri gh t © 2 01 4. B er re tt -K oe hl er P ub li sh er s. A ll r ig ht s re se rv ed . Ma y no t be r ep ro du ce d in a ny f or m wi th ou t pe rm is si on f ro m th e pu bl is he r, e xc ep t fa ir u se s pe rm it te d un de r U. S. o r ap pl ic ab le c op yr ig ht l aw . EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 8/27/2020 1:03 PM via SOUTHERN NEW HAMPSHIRE UNIV AN: 667095 ; Weiss, Joseph W..; Business Ethics : A Stakeholder and Issues Management Approach Account: shapiro 550 Business Ethics Human Rights, the 1975 Helsinki Final Act, the 1976 OECD Guidelines for Multinational Enterprises, the 1977 ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, and the 1972 UN Code of Conduct on Transnational Corporations.116 The guidelines serve as broad bases that all international corporations use to design specifi c policies and procedures; these corporations can then apply their own policies and pro- cedures to such areas as “child care, minimum wages, hours of work, employee training and education, adequate housing and health care, pollution control eff orts, advertising and marketing activities, severance pay, privacy of employ- ees and consumers, and information concerning on- the- job hazards.”117 8.7 Cross- Cultural Ethical Decision Making and Negotiation Methods “You are a manager of Ben & Jerry’s in Rus sia. One day you discover that the most se nior offi cer of your company’s Rus sian venture has been ‘borrow- ing’ equipment from the company and using it in his other business ventures. When you confront him, the Rus sian partner defends his actions. After all, as a part own er of both companies, isn’t he entitled to share in the equip- ment?”118 These and so many other international business situations confront managers and professionals with dilemmas and gray areas in their decision making. As one author noted, “Global business ethics has now become the ultimate dilemma for many U.S. businesses.”119 “Transnationals operate in what may be called the margins of morality because the historical, cultural, and governmental mores of the world’s nation- states are not uniform. There is a gray area of ethical judgment where standards of the transnational’s home country diff er substantially from those of the host country. . . . There is yet no fi xed, institutionalized policing agency to regularly constrain morally questionable practices of transnational com- merce. Moreover, there is no true global consensus on what is morally ques- tionable.”120 Scholars and business leaders agree that solving ethical dilemmas that involve global, cross- cultural dimensions is not easy. Often there are no “quick fi xes.” Where other laws, business practices, and local norms confl ict, the decision makers must decide, using their own business and value judgments. Ethics codes help, but decision makers must also take local and their own com- pany’s interests into consideration. In short, there is no one best method to solve international business ethical dilemmas. From a larger perspective, exter- nal human rights and corporate monitoring groups are also needed to inform and advise corporations before dilemmas occur about human rights and meth- ods that can prevent abuses of local workers and private citizens. External Corporate Monitoring Groups Corporations and their leaders are ultimately responsible for articulating, modeling, and working with international stakeholders to enforce legal and Co py ri gh t © 2 01 4. B er re tt -K oe hl er P ub li sh er s. A ll r ig ht s re se rv ed . Ma y no t be r ep ro du ce d in a ny f or m wi th ou t pe rm is si on f ro m th e pu bl is he r, e xc ep t fa ir u se s pe rm it te d un de r U. S. o r ap pl ic ab le c op yr ig ht l aw . EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 8/27/2020 1:03 PM via SOUTHERN NEW HAMPSHIRE UNIV AN: 667095 ; Weiss, Joseph W..; Business Ethics : A Stakeholder and Issues Management Approach Account: shapiro 8 Stakeholder Management in the Global Environment 551 ethical standards in their fi rms as they do business around the world. Many do. However, as noted earlier, gray areas and lack of universal laws and norms leave loopholes that companies and local groups might use as competitive, but harmful, cost- saving advantages (e.g., not providing even “living wages” to the poor women and children they employ, polluting the environment, and using undue po liti cal infl uence to beat out competition). Numerous in- ternational groups that work with and monitor MNEs regarding human rights include— but are not limited to— Amnesty International (promotes and advocates human rights), OECD (developed guidelines for MNEs), ILO (publishes and works in the area of human rights), NGOs (combat corruption, assure adequate labor conditions, and establish standards for economic respon- sibility), Transparency International (monitors and publishes the international Corruption Perception Index), Apparel Industry Partnership (which develops codes of conduct regarding child labor practices and working conditions re- lated to “sweat shops” and subcontractors), and the Caux Round Table (an executive group formed in Switzerland that published the noted Caux Prin- ciples and works with other international business professionals on developing and implementing universal ethics codes).121 These groups work with, and some are composed of, MNE executives, governments, legislators, local citi- zenry, and other stakeholders worldwide to inform, monitor, and assist MNEs with ethical global business practices. Sandra Waddock states that Demands for greater corporate transparency and accountability, as well as anti- corruption mea sures are fostering signifi cant new accountability, reporting, and transparency initiatives among co ali tions of business, labor, human rights, investor, and governmental bodies. . . . A database created by the International Labor Or ga ni za tion and available over the Internet lists nearly 450 web sites of industry and business associations, corporate, NGO and activist groups, and consulting organizations that have developed and are promulgating a wide range of relevant policy initiatives. These initiatives include a mix of trans- parency and reporting initiatives, codes of conduct, principles, and fair trade agreements. Responses to these demands are varied. Many companies, particu- larly those under NGO and social activist pressures to reform labor and human rights abuses in their supply chains, have formulated their own codes of con- duct. Notable among these companies are Levi- Strauss, Nike, and Reebok, all signifi cant targets of activism.122 In the following section, several guidelines are discussed to complement principles and “quick tests” presented in Chapter 2. Individual Stakeholder Methods for Ethical Decision Making In an international environment, the temptations can be strong, and the laws looser, or less obvious. Pressure from headquarters to make the bottom line can also weigh heavily. “Sometimes people confuse norms with ethics— exploitation of child labour, bribery and kickbacks may be the norm, but that doesn’t mean Co py ri gh t © 2 01 4. B er re tt -K oe hl er P ub li sh er s. A ll r ig ht s re se rv ed . Ma y no t be r ep ro du ce d in a ny f or m wi th ou t pe rm is si on f ro m th e pu bl is he r, e xc ep t fa ir u se s pe rm it te d un de r U. S. o r ap pl ic ab le c op yr ig ht l aw . EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 8/27/2020 1:03 PM via SOUTHERN NEW HAMPSHIRE UNIV AN: 667095 ; Weiss, Joseph W..; Business Ethics : A Stakeholder and Issues Management Approach Account: shapiro 552 Business Ethics they’re right— and that’s what companies need to deal with,” says Joseph Reitz, who is co- director of the International Center for Ethics in Business at the Uni- versity of Kansas. “There’s lots of evidence that companies insisting on doing business in the right way may suff er in the short term, but in the long run they do well.”123 Or do they? When confronted with cross- cultural ethical dilemmas, confl ict- ing norms, and potentially illegal acts in international situations, individual employee and professional stakeholders need guidelines. Professionals and executives preparing to work abroad should ask for country- specifi c training on regional and local laws, customs, and business practices. As noted earlier, these professionals need to know their own fi rm’s acceptable and unacceptable policies and procedures regarding negotiations and business dealings. This section introduces some— but obviously not all— guidelines that are a begin- ning step to becoming aware of the cultural diff erences and potential ethical consequences of doing business in other regions and countries. DeGeorge off ers the following general tactics that serve as a basic start for preventing, as well as solving, ethical dilemmas internationally:124 1. Do not violate the very norms and values that you want to preserve and that you use to evaluate your adversary’s actions as being unethical. Seek to pursue with integrity economic survival and self- defense tactics. Winning a tactical battle unethically or illegally is not the goal. 2. Use your moral imagination, because there are no specifi c rules for responding to an ethical opponent. Stakeholder analysis can help. Explore dif- ferent options. Use literature, stories, and lives of heroes and saints for creative responses instead of rules. 3. Use restraint and rely on those to whom the use of force is legitimately allocated when your response to immorality involves justifi able force or retali- ation. Use minimal force that is justifi ed as the ultimate solution, realizing that force is a reaction to unethical acts and practices. 4. Apply the principle of proportionality when mea sur ing your response to an unethical opponent. The force you use should be commensurate with the off ense, the harm suff ered, and the good to be gained. 5. Use the technique of ethical displacement when responding to unethical forces. This principle consists of searching for clarifi cation and a solution to a dilemma on diff erent, higher levels than the personal (e.g., as discussed in Chapter 1, look at the problems from these levels: international, industry, or- gan i za tion al, structural, and national or legislative policy). 6. Use publicity to respond to an unethical practice, adversary, or system. Corruption, unethical and illegal practices and actions, operates best in the dark. Using publicity judiciously can mobilize pressures against the perpetrators. 7. Work jointly with others to create new social, legal, or pop u lar struc- tures and institutions to respond to immoral opponents. 8. Act with moral courage and from your values, personally and corporately. Co py ri gh t © 2 01 4. B er re tt -K oe hl er P ub li sh er s. A ll r ig ht s re se rv ed . Ma y no t be r ep ro du ce d in a ny f or m wi th ou t pe rm is si on f ro m th e pu bl is he r, e xc ep t fa ir u se s pe rm it te d un de r U. S. o r ap pl ic ab le c op yr ig ht l aw . EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 8/27/2020 1:03 PM via SOUTHERN NEW HAMPSHIRE UNIV AN: 667095 ; Weiss, Joseph W..; Business Ethics : A Stakeholder and Issues Management Approach Account: shapiro 8 Stakeholder Management in the Global Environment 553 9. Be prepared to pay a price, even a high one. Innocent people sometimes must pay costs that others impose on them by their unethical and illegal activities. 10. Use the principle of accountability when responding to an unethical activity. Those who harm others must be held accountable for their acts. Getting to Yes Solving a moral dilemma in an international context is not easy. Roger Fisher, Bruce Patton, and William Ury’s Getting to Yes: Negotiating Agreement Without Giving In (alluded to earlier in this text) remains a classic primer for negotiat- ing. Their four- step approach includes: 1. Separate the people from the problem. 2. Focus on interests, not on positions. 3. Insist on objective criteria, never yield to pressure. 4. Invent options for mutual gain. The authors note that it is always necessary to determine your best alter- native to a negotiated solution before starting a negotiation.125 Building on Fisher, Patton, and Ury’s method, Nancy Adler states that formal negotiations, especially in an international or cross- cultural context, proceed through four stages after preparing for a negotiation: 1. Build interpersonal relationships (learn about the people)— separate people from the problem. 2. Exchange task- related information— focus on interests, not positions. 3. Persuade—invent options for mutual gain, instead of relying on preconceived positions, high pressure, or “dirty tricks.” 4. Make concessions and agreements— use objective decision criteria.126 Understand the Local Culture First Is local culture important or are people across cultures becoming more alike, especially with globalization and for those working in MNEs? Studies show that although organizations are becoming more alike in their structures and technologies, individuals maintain and even emphasize their cultural behav- iors even more. National culture explains more about employees’ attitudes and behaviors than does age, gender, role, or race.127 When communicating and negotiating in diff erent cultural contexts, gaining an understanding of the local culture in preparing for the negotiation is recommended before using any specifi c negotiation technique. Cultural miscues and disconnects are grounds for creating and exacerbating ethical problems and dilemmas. Con- sider, then, these cultural diff erences before problem solving or negotiating with counterparts: • What are the dominant, underlying values of the culture? (Are groups, families, and collectives and their decisions valued over individuals and individual decisions, or vice versa?) Co py ri gh t © 2 01 4. B er re tt -K oe hl er P ub li sh er s. A ll r ig ht s re se rv ed . Ma y no t be r ep ro du ce d in a ny f or m wi th ou t pe rm is si on f ro m th e pu bl is he r, e xc ep t fa ir u se s pe rm it te d un de r U. S. o r ap pl ic ab le c op yr ig ht l aw . EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 8/27/2020 1:03 PM via SOUTHERN NEW HAMPSHIRE UNIV AN: 667095 ; Weiss, Joseph W..; Business Ethics : A Stakeholder and Issues Management Approach Account: shapiro 554 Business Ethics • How formally or informally are relationships viewed? (Is it necessary to get to know someone before negotiating, or is jumping to the facts fi rst acceptable?) • How do people understand and value rules versus spontaneity and bending rules? (Do friendships come before rules or are rules seen as unbreakable and applicable to all?) • How are authority and power viewed? (Is position and status valued more than experience? Is the boss more often seen as being right regardless of “the facts”?) • Is age respected as indicating wisdom and authority? • To what extent does the culture avoid or embrace uncertainty and risk? (Are people threatened by ambiguity and therefore avoiding unpredictability?) Sources that address these and other comparative cultural diff erences are readily available.128 Figure 8.7 illustrates diff erent negotiating strategies among North Amer- icans, Japa nese, Chinese, and Latin Americans, based on cultural values and characteristics. Can you see how ethical problems and dilemmas could arise from communication miscues among professionals from these countries ne- gotiating a complex transaction? American Negotiators Japa nese Negotiators Chinese (Taiwanese) Negotiators Brazilian Negotiators Preparation and planning skill Dedication to job Per sis tence and determination Preparation and planning skill Thinking under pressure Perceive and exploit power Win respect and confi dence Thinking under pressure Judgment and intelligence Win respect and confi dence Preparation and planning skill Judgment and intelligence Verbal expressiveness Integrity Product knowledge Verbal expressiveness Product knowledge Demonstrate listening skill Interesting Product knowledge Perceive and exploit power Broad perspective Judgment and intelligence Perceive and exploit power Integrity Verbal expressiveness Competitiveness Figure 8.7 Four Typical Styles of International Ethical Decision- Making Negotiating Strategies with American, Japa nese, Chinese, and Brazilian Cultures Source: LeBaron, M. (July 2003). Culture- based negotiation styles. BeyondIntractability.org. http:// www .beyondintractability .org /essay /culture _negotiation /, accessed January 10, 2014. Co py ri gh t © 2 01 4. B er re tt -K oe hl er P ub li sh er s. A ll r ig ht s re se rv ed . Ma y no t be r ep ro du ce d in a ny f or m wi th ou t pe rm is si on f ro m th e pu bl is he r, e xc ep t fa ir u se s pe rm it te d un de r U. S. o r ap pl ic ab le c op yr ig ht l aw . EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 8/27/2020 1:03 PM via SOUTHERN NEW HAMPSHIRE UNIV AN: 667095 ; Weiss, Joseph W..; Business Ethics : A Stakeholder and Issues Management Approach Account: shapiro 8 Stakeholder Management in the Global Environment 555 It is helpful to understand how other cultures perceive, understand, and perhaps even ste reo type American cultural characteristics. (Obviously, not everyone from every culture refl ects all of his/her national culture’s charac- teristics.) For example, characteristics most commonly associated with Amer- icans from the diff erent nationals reveal interesting patterns (e.g., although Americans were largely seen as industrious, inventive, intelligent, decisive, and friendly by an interview sample of French, Japa nese, Western Germans, British, Brazilians, and Mexicans, Americans were also seen as nationalistic, rude, and self- indulgent by Japa nese; sophisticated by western Germans; nationalistic by Brazilians; and greedy by Mexicans).129 Becoming self- aware of one’s cultural characteristics (attitudes, values, behaviors, and others’ perceptions of us) is an important step toward business transactions in order to prevent and negotiate ethical dilemmas. Four Typical Styles of International Ethical Decision Making At a more macro level, George Enderle identifi ed four distinctive international ethical decision- making styles that companies often use when making decisions abroad: (1) Foreign Country style: a company applies the values and norms of its local host—“When in Rome, do as the Romans do”; (2) Empire style: a company applies its own domestic values and rules; this can be an imperialis- tic practice; (3) Interconnection style: a company applies shared norms with other companies and groups; national identities and interests are transcended and blurred, as when states make commercial decisions and rely on North American Free Trade Agreement (NAFTA) or the EU members to off er agreed- on pro cesses and solutions; and (4) Global style: a company abstracts all local and regional diff erences and norms, coming up with a more cosmo- politan set of standards and solutions for its actions in the host country.130 The Foreign Country and Empire styles have obvious drawbacks in reach- ing ethical decisions. The Foreign Country style may result in gross injustices and inequities that are inherent in the norms adopted. Some local country norms and business practices, for example, do not prohibit child labor. The Empire style is a form of imperialism that disregards local norms and prac- tices. The Global style, seemingly the “right answer,” also presents problems. This style imposes its own interpretation of a “global morality and truth” on a host culture and norms. The Global style can also suff er from shortcomings shared by the Foreign Country and Empire styles. The Interconnection style “acknowledges both universal moral limits and the ability of communities to set moral standards of their own. It balances better than the other types a need to retain local identity with the ac know ledg ment of values that tran- scend individual communities. The drawbacks of this style are practical rather than moral.” Companies and individual employees usually do not have quick or direct access to a commonly shared local, national, and international source to advise on a par tic u lar issue. Of the four …