Lecture Notes for Week 08: Global Business Ethics
Introduction
As businesses expand globally, they encounter diverse ethical standards and challenges in
maintaining consistency across different cultures and regions. This lecture explores cross-
cultural ethical issues, the influence of international laws, and how businesses can navigate
ethical dilemmas abroad while respecting cultural differences.
Objectives
1. Understand cross-cultural ethical issues and their impact on global businesses.
2. Learn about international laws and regulations related to business ethics.
3. Explore strategies for maintaining ethical practices in global operations.
4. Analyze case studies of multinational corporations managing ethical challenges abroad.
1. Cross-Cultural Ethical Issues
Definition
Cross-cultural ethical issues arise when different countries or cultures have varying standards of
what is considered ethical or unethical behavior.
Explanation
Differences in Ethical Standards: What is acceptable in one culture may be seen as unethical in
another (e.g., gift-giving practices in business).
Challenges: Businesses must balance respecting local customs with upholding universal
ethical principles.
Example: A company operating in a country where child labor is legal must decide
whether to comply with local practices or adhere to international labor standards.
2. International Laws and Regulations
Definition
International laws and regulations are rules established by international bodies to govern
business practices across borders, ensuring fairness and ethical behavior.
Explanation
Corruption: Many countries have laws like the Foreign Corrupt Practices Act (FCPA) to
prevent bribery in international business.
Labor Rights: Global standards, such as those from the International Labour
Organization (ILO), promote fair treatment of workers.
Environmental Standards: Agreements like the Paris Accord guide businesses in
reducing their environmental impact.
3. Ethical Business Practices Abroad
Definition
Ethical business practices abroad refer to maintaining high ethical standards while operating in
foreign markets, even when faced with conflicting cultural norms.
Explanation
Case Studies: Companies like Unilever have implemented sustainable sourcing practices
globally.
Cultural Sensitivity: While respecting cultural norms (e.g., gift-giving), businesses must
avoid unethical practices like bribery.
Balancing Acts: Companies must align their operations with both local customs and
global ethical standards.
Summary
Global business ethics requires understanding cross-cultural differences, complying with
international laws, and maintaining ethical practices abroad. By balancing cultural sensitivity
with universal ethical principles, businesses can build trust and ensure long-term success.
Multiple-Choice Questions (MSQs)
1. Which of the following is a key challenge for maintaining ethical practices in global
business operations?
A. Compliance with local tax regulations
B. Balancing cultural sensitivity with ethical standards
C. Hiring employees from different cultures
D. Expanding into international markets
Correct Answer: B. Balancing cultural sensitivity with ethical standards
Explanation: While expanding globally, businesses face the challenge of respecting local
cultural practices without compromising their ethical principles.
2. Which organization promotes international labor rights and fair treatment of workers
globally?
A. World Trade Organization (WTO)
B. International Labour Organization (ILO)
C. United Nations Development Program (UNDP)
D. International Monetary Fund (IMF)
Correct Answer: B. International Labour Organization (ILO)
Explanation: The ILO sets standards to ensure workers' rights, fair wages, and safe working
conditions across the globe.
3. What is the focus of the Triple Bottom Line framework in global business ethics?
A. Economic growth and shareholder value
B. People, Planet, and Profit
C. Product quality and service delivery
D. Expansion into emerging markets
Correct Answer: B. People, Planet, and Profit
Explanation: The Triple Bottom Line emphasizes social responsibility (People), environmental
sustainability (Planet), and financial performance (Profit).
Scenario-Based Questions
1. Scenario: A multinational corporation operates in a country where child labor is legal and
common in the supply chain. What should the company do?
A. Follow local practices to reduce costs.
B. Ignore the issue to avoid legal problems.
C. Uphold international labor standards and work with suppliers to eliminate child labor.
D. Shift operations to another country.
Correct Answer: C. Uphold international labor standards and work with suppliers to eliminate
child labor.
Explanation: Businesses must adhere to ethical labor practices, even if local laws permit
unethical behavior, to maintain their reputation and corporate responsibility.
2. Scenario: A company learns that a local partner in another country offers bribes to secure
government contracts. What is the best course of action?
A. Terminate the partnership immediately.
B. Report the issue to local authorities.
C. Train the partner on ethical practices and establish anti-corruption policies.
D. Ignore it, as it is the norm in that country.
Correct Answer: C. Train the partner on ethical practices and establish anti-corruption policies.
Explanation: Providing education and clear policies ensures long-term ethical compliance while
maintaining the partnership.
3. Scenario: A company decides to expand to a country with less stringent environmental laws.
What approach should the company take?
A. Follow the country's minimal environmental regulations.
B. Adopt its own higher environmental standards.
C. Ignore environmental concerns to save costs.
D. Use outdated equipment to match local practices.
Correct Answer: B. Adopt its own higher environmental standards.
Explanation: Upholding global environmental standards demonstrates corporate responsibility
and reduces reputational risks.
True/False Question
Statement: A business must always comply with local cultural norms, even if they contradict
international ethical standards.
A. True
B. False
Correct Answer: B. False
Explanation: While cultural sensitivity is important, businesses must maintain ethical integrity
and adhere to universal principles, such as human rights and environmental sustainability.
