International Business and EthicsEssay

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Business Ethics -- Movie Commentaries

"INEQUALITY FOR ALL" AND "THE CORPORATION"

"Inequality for All"

The Plot

Documentary by Robert Reich, a political commentator who served in three presidential administrations: Gerald Ford's; James Carter's; and William Clinton's as the U.S. Secretary of Labor. Reich and director Jacob Kornbluth's 2013 documentary discusses the dangerous accumulation of U.S. wealth in the richest sector of the country and its devastating effect on America. According to the documentary, the 400 wealthiest individuals own as much wealth as the poorest 150 million individuals, encouraging risky speculation that: erodes the vital middle class; weakens the country's infrastructure of roads, bridges, schools, etc.; leads to crashes such as the 2008 mortgage-driven collapse; produces far less tax revenue for running the government because the wealthiest are taxed at a lower "capital gains" rate; subjects the government to strong pressure from the special interests of the wealthiest people; weakens labor unions; weakens the world economy through rising global capitalism; and sends considerable wealth and employment offshore (Kornbluth, 2013). The documentary warns that America's economic future is bleak unless steps are taken to reverse this trend.

b. Ethical Issues

"Inequality for All" highlights multiple ethical issues for America's economic situation and future. There is the question of whether whatever is deemed unethical in one situation becomes ethical and even readily acceptable in other situations. In addition, the wealthy should consider: basic human rights that are being violated by seizing as much wealth as possible; avoiding abuse of economic power; "welfare" considerations of the people affected by their practices; principles of justice in the division of benefits, fair competition and avoiding taking unfair advantage; and ideally adopting a universal code of ethics safeguarding the rights of all individuals in America.

2. "The Corporation"

a. The Plot

"The Corporation" is a 2003 documentary examining the phenomenon of the corporation since the late 18th century through modern times and possibly beyond. The corporation is regarded as a legal person and has become the prevailing worldwide economic, political and social power. Examined psychologically, the modern corporation acts like a dangerous psychopath, accumulating power with no conscience and with only profitability in mind. The documentary offers no easy solutions but succeeds in giving some ideas on stopping the corporation from essentially destroying the world (Achbar & Abbott, 2003).

b. Ethical Issues

"The Corporation" highlights multiple ethical issues for international corporations and is well-suited to our readings and lectures. There is the question of whether whatever is deemed unethical in one country becomes ethical and even readily acceptable in other countries. In addition, international corporations should consider: basic human rights that are being violated; avoiding abuse of economic power; "welfare" considerations of the countries affected by their practices; principles of justice in the division of benefits, fair competition and avoiding taking unfair advantage; and ideally adopting a universal global code of ethics safeguarding the rights of all entities and individuals worldwide.

Their dominance of the worldwide market means international corporations must address multiple practical problems. The possible use of bribery, the possibility of human rights abuses and ensuring that their own business does not encourage or enable human rights abuses, their own actions to reduce or eliminate human rights abuses and their own moral/ethical/legal culpability for their business practices must all be considered by international corporations.

3. Both Films' Connections of Ethical Issues to our Readings and Lectures

a. Sweat Shops, Bribery and Local Ethics

International business adds difficulties to ethical decision-making. "Sweat shops" could actually improve the economic conditions of people in other countries (McClean, n.d., p. 2). The international market shows a serious shortcoming of Kantian ethics because discerning the correct duty using only western concepts of moral right and wrong can actually harm others (McClean, n.d., p. 2). In fact, according to the local standards in other countries, practices that may be deemed unethical in America are perfectly ethical and sensible in other countries (Boatright, 2012, p. 333). In the global business world, corporations must struggle with the decision of following absolutism, requiring the same standards no matter where they do business, vs. relativism, which bends according to local customs in other countries, vs. a hybrid of both approaches (Boatright, 2012, p. 333). The corporation must consider: morally relevant differences between developed and less developed countries; the assortment of ethical outlooks across the globe that may conflict with or otherwise alter our own ethical outlook; the rights of people in other countries to decide how they will be treated in their own best interests; and the nuts-and-bolts conditions of doing business in other countries according to their own rules and customs (Boatright, 2012, pp. 333-336).

International corporations must intelligently address the problem of foreign bribery. Both the act of offering a bribe to induce a public official to avoid doing his duty and the public official's acceptance of that bribe to violate his/her duty are deemed morally/ethically wrong per se (Boatright, 2012, pp. 346-7). Our Foreign Corrupt Practices Act prohibiting U.S. corporations from bribing officials from other countries in order to do business may actually prevent business and harm people in other countries who would greatly benefit from the business (McClean, n.d., p. 2). In the 1970s, 400 U.S. companies admitted to making more than $300 million in payment to the officials, politicians and political parties of other countries (McClean, n.d., p. 3). Congress passed the Foreign Corrupt Practices Act (FCPA) to stop bribery and repair the public's confidence in the honesty of U.S. businesses (McClean, n.d., p. 3). That created a disadvantage for American businesses in the international market, so the U.S. pushed for an agreement in the Organization of Economic Cooperation and Development (OECD) to prohibit bribery by businesses of other countries. In 1997, the U. S and 33 other member countries signed the agreement (McClean, n.d., p. 3). In order to get around the business impairment caused by refusing to give bribes, for example to local officials in China, some corporations hire agents in other countries and what the agents do, possibly including bribery, is their business. There is, of course, the ethical dilemma of whether that is, in fact, bribery on the part of the corporations (McClean, n.d., pp. 3-4).

b. Fundamental Universal Rights

In the struggle to effectively, morally conduct business internationally, experts such as Thomas Donaldson have suggested certain broad guidelines. Corporations should recognize certain fundamental universal rights, such as the rights to physical freedom, property ownership, avoidance of torture, fair trials, nondiscrimination, physical security, free speech and association, basic education, participation in politics and subsistence (Boatright, 2012, pp. 336-7). Corporations must also avoid the abuse of their economic power and consider giving economic aid to the countries in which they do business (Boatright, 2012, p. 337).

c. Welfare

A step up from the basic rights consideration is the "welfare" consideration proposed by Richard DeGeorge, which includes rights but also focuses on avoiding injury and furnishing benefits by doing business in a country. Those principles include: doing no intentionally direct harm; producing more good than harm; contributing to the host company's development; respecting their employees' human rights; respect the local culture to the extent that does not violate ethics; pay adequate taxes; and cooperate with local government to develop and enforce justice (Boatright, 2012, p. 338).

d. Justice

Even beyond Donaldson's basic human rights and DeGeorge's welfare, corporations must consider justice in the division of benefits from doing business in foreign nations, fair competition and avoiding taking unfair advantage (Boatright, 2012, p. 339).

e. An international code of ethics

Thinking beyond basic human rights, welfare and justice, some experts such as Hans Kung are pushing for an international code of ethics governing all entities and individuals as members of the global community (Boatright, 2012, p. 340). That international code of ethics must include guidelines regarding: wages and working conditions; setting wage standards according to the market, minimum wage laws, fair labor standards, health and safety regulations and human rights principles, not setting standards so high as to seriously hamper business in less developed countries, controlling the practices of foreign contractors, and adopting a code of conduct using all those factors (Boatright, 2012, pp. 340-5).

International corporations must avoid possible human rights abuses, ensuring that their own business requirements and practices do not encourage or enable human rights abuses by oppressive governments of the countries in which they operate (Boatright, 2012, pp. 351-2). Some corporations maintain that they are not directly engaged in the human rights violations. However, corporations should practice "constructive engagement" in which they use their power to positively affect human rights and reduce/eliminate human rights abuses, or "nonengagement" in which they refuse to do business in a country chronically abusing human rights (Boatright, 2012, pp. 352-3).

f. Liability

Finally, when international corporations are complicit in violations, they should be held liable in American courts, according to the Alien Tort Claims Act (ATCA) OF 1789; however, there are considerable difficulties in interpreting ATCA, determining standing to sue, whether corporations or just individuals may be sued, and other… [END OF PREVIEW]

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