Matthew Morris Brian Ebrecht

Elisabeth Gilbert Casey Capron Christen Luciano

GLOBAL OR LOCAL?

HOW TO CONDUCT INTERNATIONAL BUSINESS

WE ARE FACED WITH INCREASED GLOBALIZATION

Factors to Consider

• Less developed nations vs. developed nations

• Ethical relativism vs. strict ethical standards

• Utilitarianism - The most good for the most people

• Cultural and religious influences

• Legal implications

PURPOSE FOR A CODE OF ETHICS

• Financial Incentives or Penalties

Milton Friedman

• Moral Obligations

Richard Degeorge’s global code of conduct

• Social Responsibility

Sullivan principles and GM in 1977 fighting apartheid

IMPLEMENTATION OF GLOBAL ETHICS

Advocates of Global Ethics

• OECD Guidelines for Multinational Enterprises

• International Chamber of Commerce

• Center for Transnational Corporations

• International Labor Organization

• UN Global Compact

Enforcing Global Ethics

• Financial benefits may out-weigh penalties

• No governing body able to enforce the rules

• Only real penalty is being removed from global ethics groups

• Its up to the company

LOCAL CODE OF ETHICS

• Customs, laws and social norms vary by host country

• Ethical relativism

• Recognizes that global ethics are not “one size fits all”

ADVANTAGES OF A LOCAL CODE OF ETHICS

• Potential for lower costs and increased profits

• Less restrictive local policies

• No need for global ethics enforcement system

• Avoid losing out to competition

• Does not impose home country ethics on others

• Allows for reactivity to local situations to avoid doing harm

• Avoids ambiguity and difficulty of enforcement

NIKE

• Harassment

• Excessive working hours

• Inaccurate or non-payment of wages

• Health and safety issues

• Lack of freedom of association and collective bargaining

NIKE’S BAD REP

• Implemented a Code of Conduct that sets out minimum standards for factories to meet

• Addressed Nike’s unrealistic business objectives

• Researched opportunities of sharing burdens with other companies:

• Complete factory audits

• Remedy labor problems

• Standardize codes

RETURNING THE SMILE TO FACES AGAIN

GLOBAL CODE OF CONDUCT

“A general standard of business practice that can be applied equally to all countries over and above their local

customs and social norms.”

TOP MNC ETHICAL ISSUES

1. Employee conflict of interest

2. Inappropriate gifts to corporate personnel

3. Sexual harassment

4. Unauthorized payments

5. Affirmative action

6. Employee privacy

7. Environmental issues

“Great global organizations can be built only from a solid ethical foundation” 1

WHY A GLOBAL CODE OF CONDUCT?

BEHAVING ETHICALLY AND UPHOLDING HIGH INTEGRITY IN GLOBAL BUSINESS

• Brand trust

• Customer loyalty

• Creating long-term shareholder value

• Attracting new investors

• Lower risk of financial penalty

• Increased integrity in internal relationships

• The Spirit and The LetterCode of Conduct – Everywhere, Every Day, Every GE Employee

• “Company to Country” – Global Issues and Strategy

• Country specific “Fact Sheets” • Citizenship Priorities• Philanthropy and Volunteering • Company History in Country • Best Practices• Strategic Business • Leadership Perspective

GENERAL ELECTRIC GLOBAL CITIZENSHIP

• India: Commit to high ethical standards

• Brazil: Health and safety of employees; governance and compliance

• Kenya: Infrastructure development, support disadvantaged communities

• China: Clean energy, anti-corruption efforts

• Middle East: Islamic Finance

GE GLOBAL CITIZENSHIP PRIORITIES

“Our framework for responsible corporate citizenship remains simple: make money, make it ethically and make a difference.”

Global Ethics Policy with Local Focus (Glocalization)

• Global: Consistency in Decision Making

• Integrity and Accountability

• Human Rights

• Labor

• Environment

• Anticorruption

• Local: Respect for Individual Cultures

• Sensitive to traditions, customs, laws

• Focus on areas of improvement in region

CONCLUSION

?QUESTIONS

• http://business-ethics.com/2010/01/24/2154-nike-corporate-responsibility-at-a-tipping-point/

• http://invest.nike.com/phoenix.zhtml?c=100529&p=irol-govConduct

• http://ethisphere.com/how-nike-is-changing-the-world-one-factory-at-a-time/

• http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf

• http://www.gecitizenship.com/our-business/country-fact-sheets/

• http://www.ge.com/company/culture/working_environment.html

• http://www.businessweek.com/managing/content/feb2008/ca20080212_394828.htm

• http://www.gecitizenship.com/faith-in-finance/

CITATIONS