Question

Select a common ethical issues that may arise in the international business setting from a news source, such as electronic local newspapers, New York Times, International Business Times, Economic Times, or CNN News. Provide a summary of the article. Explain the root cause of these issues. Discuss how managers of international firms should address these issues. please provide the name of article

Answer 1

Article Name: Corruption in Japan

In the 1970s, Carl Kotchian, an American business executive who served as the president of Lockheed Corporation, paid $12.5 million to Japanese agents and government officials to sell Lockheed’s TriStar jet to All Nippon Airways. After the case was discovered, U.S. officials charged Lockheed with falsification of its records and tax violations.

The revelations created a scandal in Japan as well. The ministers who took the bribe were charged, and one committed suicide. It even led to the jailing of Japan’s prime minister. The Japanese government fell in disgrace, and the Japanese citizens were outraged. Kotchian had, without doubt, engaged in unethical behavior.

Some of the modern philosophers argue that the power of MNCs brings with it the social responsibility to give resources back to the societies. The idea of Social Responsibility arises due to the philosophy that business people should consider the social consequences of their actions.

They should also care that decisions should have both meaningful and ethical economic and social consequences. Social responsibility can be supported because it is the correct and appropriate way for a business to behave. Businesses, particularly the large and very successful ones, need to recognize their social and moral obligations and give resources and donations back to the societies.

Wages and the working environment in overseas locations are often inferior to those in the United States, even when you fulfill all local legal requirements. If you hire workers there, you face the issue of what pay levels and working conditions are acceptable. Applying U.S. standards is usually not realistic and often simply disrupts the established market.

An effective approach is to develop company standards which protect workers while fitting into the local economy. Your standards have to guarantee a living wage, protect the safety of your workers and establish a reasonable number of hours for the work week.

Companies making payments to secure business that they would not otherwise obtain are guilty of illegal actions under the U.S. Foreign Corrupt Practices Act. The payments, even if they seem to be customary, are usually illegal under local laws as well. When your company makes such payments, it is encouraging a local system of corruption through unethical behavior. Smaller gifts, of a size that would not normally influence a major decision, are considered ethical in some societies and may be legal under local and U.S. laws.

If you find that large sums are routinely required to do any business in a country, you may want to reevaluate your decision to enter that market.

Not all foreign countries have environmental legislation that makes it illegal to pollute. Companies may discharge harmful materials into the environment and avoid costly anti-pollution measures. An ethical approach to your expansion into such markets is to limit your environmental footprint beyond what is required by local laws. An ethically operating company ensures its operations don't have harmful effects on the surrounding population.

Since your company has the knowledge and expertise to operate within U.S. environmental regulations, it is ethical to apply similar standards in your new locations.