Ethics in International
Business
 “Ethics” are principles of conduct governing an
individual or group
Ethics are difficult…
 What principles you should follow and what
they mean in a particular case is often unclear
 Ethics is even more difficult for business people
than for others
 Accountants and medical doctors have
organizations that try to establish agreement in the
profession as a whole on codes of conduct
 And still there are major disagreements
 No one tries to establish agreement among
general managers, marketers
 The situations a general manager faces are so
diverse, no central organization could create
ageement
 Efforts like Alan Boeckmann’s in the construction
industry are cover just a few parts of business
 But they do show some success
Is ethical behavior the best
policy…
 … the one that produces the most long-run profits?
 There is considerable evidence that it is
 Ethical behavior creates goodwill and reputation
 People avoid doing business with people they consider
unethical
 They know doing business with the unethical is a risk
 Much of the human brain is devoted to caring;
people often find it uncomfortable to work with others
whose actions offend them
 And people with bad ethics really do face the risk of
getting caught
 In the U.S., prosecutors zealously pursue businesspeople
Moral development
 Everyone does have a sense of morality
 unless you’re psychologically deranged
 We think about morality in class because thinking can
develop more credible moral ideas
 And if they’re more credible, people may follow them
Stages in moral development
 Psychologists find there is a predictable process
through which morals develop
 “Preconventional stages”
 Children learn to respond to rules
 to avoid punishment
 to get what they want for themselves and those they care about
 Conventional stages – meeting the expectations of family,
peer group, or nation is valuable in its own right
 “Postconventional” or “principled” stages - people try to
see situations from a point of view that
takes everyone’s interests into account.
 A more mature personal morality
 The psychologist Lawrence Kohlberg reported moral development
as a matter of developing more mature principles
 Carol Gilligan found people can also develop morally toward more
adequate ways of relating to others
 Gilligan saw this as a female way
 But others noted men and women can use either a principled or a
relationship-oriented approach
How we all lose
if we’re not ethical
 The prisoner’s dilemma game …
 We all lose in a world where we’re not ethical
 How can we gain the benefits or working together
through ethics?