Business Ethics
II
Managing values and believes
Business Ethics
II
Tomasz Ochinowski Ph.D
Managing
values and believes
ochinto@o2.pl
&
Tomasz
Jerzy Ochinowski
Jagodziński,Ph.D
editor- in
ochinto@o2.pl
chief
- The University of
Warsaw, Faculty
Management
&
Press
Jerzy Jagodziński
jjagodzinski@mail.wz.uw.edu.
pl
Course Grading:
Final test
(„opened questions” and „opened
books”)
Ethics in global world
JERZY JAGODZIŃSKI
Global ethics
• Governments
• International Organisations
• Global banks and corporations
• Local firms
• Individuals
Global ethics - governments
NORTH – SOUTH
REACH VERSUS POOR
Global ethics - governments
• G7 official development assistance
(ODA) levels fell by 1% in 2007,
excluding debt relief.
• SOURCE: OECD’s Development Assistance
Committee 2008
Global ethics - governments
Climate change
Global warming
„Greenhouse EFFECTS”
KYOTO PROTOCOL
The pact requires industrialized
countries to cut their greenhouse gas
emissions from 1990 levels by an
average of 5.2% between 2008 and 2012
Global ethics - governments
• The protocol sets separate gas-reduction
targets for individual industrialized
countries. In Japan’s case, it must reduce
emissions by 6%. Despite its firm
commitment to the Kyoto Protocol,
however, Japan’s emissions actually rose
by 8.1% in fiscal 2005.
SOURCE „JAPAN TODAY” 16.02.2007
Goverment and ethics
• Scientists say the evidence is strong that
humans are responsible for much of the
warming since early in the 20th century.
• The storms that strike the Americas are
global warming-influenced.
Global ethics - governments
•
USA war spending - Irak, Afganistan
2 trillions dollars
as a result
The leadership of America is at stake
US Federal debt- forcast
GDP, USA, 2006-2010
China
EURO ZONE
CONFLICTS XXI
• GLOBAL ECONOMIC WAR
USA- CHINA CONFLICT?
• Pessimistic scenario?
Protectionist tendencies have evidently
reemerged in contemporary world
• A tendency to take over possession of
non-renewable production factors by
corporations involved in international-scale
activities, with extensive support of their
respective governments.
International ethics - organizations
World Bank
Global ethics- organizations
The World Bank is like a cooperative,
where its 195 member countries are
shareholders. The shareholders are
represented by a Board of Governors, who
are the ultimate policy makers at the World
Bank.
Headquarters -Washington
International ethics - organizations
• It is the vision of the World Bank Group to
contribute to an inclusive and sustainable
globalization to:
• overcome poverty,
• enhance growth with care for the
environment,
• create individual opportunity and hope
Robert B. Zoellick, President
Global ethics - organizations
„An estimated 1.5 billion people survive on
incomes of 2 US$ or less a day. Rising food
prices threaten to cause more hunger and
malnutrition, while climate change is already
having an impact on agriculture, the source of
livelihood of the majority of people in poor
countries. Infectious diseases, particularly
HIV/AIDS and malaria, are widespread. Many of
the poorest countries in Africa are landlocked
and lack reliable electricity - preventing the
development of business”.
WB webside
CORRUPTION MECHANISM
SOURCE : WORLD BANK
Bank lends money to the government
of a developing country for a specific project
The recipient country will often co-mingle that money
with revenue from other sources, such as
taxes, private financing, and bilateral donors
The government then distributes the funds
to the appropriate ministry for the project
The ministry sets up operation for the project
bidding out contracts for the needed supplies and work
Bidding companies pay some commission to get the contract
But their estimates are more much higher than needed
Bribery is also being paid by companies
who don’t do the work or grossly under perform
CORRUPTION EFFECTS
• Shoddy (miserable) workmanship
• Shortcuts taken to finance the bribes
• Completely sham projects
„The corruption shortchanges the people
in developing countries whom the
projects were intended to help. It can
lead to real social decay” - World Bank
statement.
WORLD BANK
ANTI - CORRUPTION HOTLINE
Report allegations of fraud & corruption
in World Bank projects, and staff misconduct
HOW TO FIGHT
CORRUPTION?
• PRESSURE FROM PUBLIC
OPINION
• FREE PRESS NOTICE
• GOVERMENT INVOLVEMENT
• FAIR PROSECUTION
CORRUPTION
AND
LOBBING ETHICS
What is lobbying?
LEAGAL DEFINITION:
The deliberate attempt to influence
political decisions through various
forms of advocacy, directed at
policymakers on behalf of another
person, organization or group.
WHAT DOES LOBBING HAVE TO DO
WITH ETHICS
• Is the difference between a consultant
and a lobbyist?
• The legislation influence is protected
under the law, for instance - First
Amendment to the U.S Const..
WHAT ARE ETHICAL DILEMMAS IN
LOBBING
• Fairness
• Transparency
• Common Good
GLOBAL ETHICS - ORGANIZATIONS
WORLD TRADE ORGANIZATION
Director - General: Pascal Lamy
„Trade opening and reducing trade barriers
has been, is and will remain,
essential to promote growth and development,
to improve standards of living
and to tackle poverty reduction”
WTO - DOHA DECLARATION
• We recognize the particular vulnerability of
the least-developed countries and the
special structural difficulties they face in
the global economy. We are committed to
addressing the marginalization of leastdeveloped countries in international trade
and to improving their effective
participation in the multilateral trading
system.
WTO - DOHA DECLARATION
• Director-General Pascal Lamy, on 17 April
2008, said at an informal meeting of the
Trade Negotiations Committee that “time
is coming soon to take our work to a
higher level and to begin drawing together
the threads both within and across the two
issues (agriculture and industrial tariffs) as
mandated in Hong Kong”.
Contradictory expectations
May 2009 poll by the Pew Research
Center found that 63% believe the trade
deficit is a big problem for the nation’s
economy today.
Overwhelming majority (81%) said that
reducing USA trade deficit with foreign
countries was an important foreign policy
goal.
May 2009 poll by the Pew
Research Center
• 65 %: Americans show substantial
concern that the products that the US
imports may be manufactured in
conditions that violate minimal standards
of health, safety, or general decency.
• 72%: US should not promote capitalism
and free markets around the world if that
risked "exploitation of underdeveloped
peoples by Western businessmen.
Lesotho case
• One-third of Lesotho’s children are not in
school. Meanwhile, Lesotho’s debt
repayments equal its entire education
budget. Instead of investing in its people,
health and development, Lesotho - a
nation of 2 million people with external
debt of $647 million — sends debt
payments to the developed world.
10.05.2008
STIGLITZ STATEMENT
„THE PROBLEM IS THAT THE GLOBAL
TRADE IS TREATED AS A KIND OF
PURE AUCTION WHERE POOR AND
WEAK COUNTRIES ARE IN A LOST
POSITION”
NOBEL PRIZE WINNER IN A BOOK:
„Fair Trade for all. How trade can promote
development”
Polish edition - 2007
GLOBALIZATION - MIGRATIONPOVERTY
•
SIGNIFICANT EXPANSION OF GLOBAL MOBILITY
•
75 million in 1960 to almost 175 million in 2000
2,2% OF WORLD PUPULATION - 2.9%
Increasing numbers of skilled non-permanent
immigrants
Increase of Child Migration
New migratory flows are no longer male-dominated"if we want to change the world, change the women".
2003 Revision of the Total Migrant Stock
UN
Largest recipient of international
migrants – YEAR 2000
• USA - 35 MILLIONS,
• RUSSIAN FEDERATION - 13 MILLIONS,
• GERMANY – 7 MILLIONS,
NEXT:
UKRAINE, FRANCE, INDIA
SOURCE: Trends in Total Migrant Stock:
The 2003 Revision, UN
The governmant’s opinions
•
It better to reduce the scope of the
international migrants.
Impact on receiving countries
• New customs, practices and behaviour,
• Resentment which can trigger social
conflicts, and desintegration – France,
Germany, England
• Growing foreign population
Impact on countries of origin
• Rather positive in standarts of lives of
both the migrants and the families left
behind
• Status in the community elevated
• Possible effects of return migration
Impact on countries of origin
• Negative for the social lives – family
desitegration – „dollar mommies”
• Import of strange and unacceptable
culture
• Increase in consumerism – political
problem?
Global problem…
• How can the clash of values and
cultures be minimized ?
Globalalization impact?
Has changed the way
people think and act?
OBESITY AND FEMINE
• 1,3 BILLION PEOPLE ARE OVERFEED OBESED
• HUNDREDS MILLIONS ARE STARVING
SOURCE- „SCIENTIFIC AMERICAN”
COCA – COLONIZATION
RESPONSIBLE FOR GLOBAL FOOD
INFRASTRUCTURE AND SALE OF
„RUBBISH EATS”
SOURCE - „SCIENTIFIC AMERICAN”
Mc Donald’s case
• 30% OF POLES SPEND 200 ZŁ A
MONTH, FOR EATING, OUT OF HOME,
• 10% DESIGN 300 ZŁ,
• THERE IS GROWING PUBLIC
ACCEPTANCE FOR THE MEAL IN
PLASTIC TRAY, PLUS COCA COLA.
Source – „RZECZPOSPOLITA”- Daily Newspaper
Global Gluttony
• USA - each year, the increase of the
percentage of the fat children amount to
3-4%.
• Poland – quota of fat children grows the
14 % a year
• Source: The Polish Center of Children
Health
MARK TWAIN’S DIET
„WELL BEING IN OUR LIFE LARGELY IS
RELATED TO FACT THAT YOU SHOULD
EAT WHAT YOU LIKE AND NEXT TO
LET EVERYTHING TO BE LEFT AWAY”.
Corporate fraud
• ENRON - corporate accounting
deception
• The role of auditors - Arthur Andersen
Corporate fraud
U.S. losses from fraud rose to an
estimated $638 billion in 2005 — up from
$600 billion in 2002 and $400 billion in
1996
Source: Association of Certified Fraud
Examiners. 2006
Corporate fraud
• The report found that, since 2003, the
number of companies reporting cases of
corruption and bribery rose 71 percent;
those reporting cases of money laundering
were up 133 percent and reports of
financial misrepresentation were up 140
percent.
source: 2005 Global Economic Crime Study.
Some facts
• 90% of Amaricans do not believe that
leaders in firms are concerned with the
interests of employees
• Only 18% think that companies are doing
in favour of their share-holders
• 43% are convinced that their bosses are
taking care of the own interests.
Gallup 2010
Reflection
• Bad face of capitalism - social costs
• Real face of capitalism – prosperity and
diversity
Grass roots, small firms - ethics
• Small and medium sized businesses
(SMEs), defined as those employing less
than 50 people:
- account for 99% of all UK businesses
- 45% of all employees work for them.
Source: Dr Laura J Spence Institute of
Business Ethics in London
Grass roots, small firms
• Under control of:
local regulations
local authorities - better monitoring
„ethic zone” for business
market and social rules
morality
importance of good and trustful relations
SMEs ethic zone
• More ecological - non-profit goals seem to be on an
equal level with profitability
• More transparent and verified,
• Less egoistic, self secured,
• Small businesses also play a social role as well as
an economic one
• Less conflictable – common values, strong sens of
partnership
• Relations with competitors are more in the tradition
of mutual support and 'sticking together' rather than
in arm's length competition
Source : „Business and morality” – J. Jackson
Examples of ethical challenges
How do I ensure that my employees
do their work properly and do the
right thing?
How do I deal with my employees’ desire
to balance their work obligations with
their personal ones?
Problem to consider
Do an ethics rules threaten small
and medium firms?
Business ethics
Doing business ethically you
make for better business?
Individuals - more pessimistic
stance
• Relativism - new rules in global
competition
• Utilitarianism – more profits, more
confidence, better position
Individuals
• Act in frame of law as well as our system
of values
• Religion and culture.
• Mostly we choose positive acting
• More opened to compromise, because we
see result of acting
• Stereotype plays limited role
Evaluating your decision
• C onsequence—What are the consequences if I
do this? Who will
benefit? Who will suffer?
L egal—Is it legal? Are there considerations
based on laws?
I mage—Would I like to see this on the front
page of the newspaper? Will this decision affect
our public image?
C ulture—Does this decision support or damage
our organization’s culture and values?
INDIVIDUALIST AND COLLECTIVIST
CULTURES
DIFFERENT TYPES OF
NEGOTIATIONS
DISTRIBUTIVE OR VALUE CLAIMING
NEGOTATION – WIN/LOOSE
INTEGRATIVE NEGOTIATION OR
CREATING VALUES, COOPERATION
WIN/WIN
Individuals
• The ethics in medicine
• Why should I be deprived to hand a
cognac for my doctor?
Moral as social
circumstances…?
Some reflections
• The USA is responsible for lowering the standards in
business?
- greed,
- not sufficient corporate supervision,
- lack of empathy and nonchalance when public opinion is
concerned.
Any conclusion
•
Bad America!
•
Good Europe?
One conlusion
•
Never simplify, rather:
HAVE AN EMPATHY TO YOUR
PARTNER, AS WELL AS ABILITY
TO PENETRATE HIS MIND AND
FEELINGS
Ethical values should include
•
•
•
•
•
•
Integrity
Honesty
Openness
Respect
Fairness
Responsibility
Ethics in global world
THANK YOU