Business Ethics & Corporate

Introduction to International Marketing

Governance

MODULE 2 (Part 1)
Introduction to International Marketing
• Managerial
ManagerialEthics
Ethics
 Managerial Ethics
MNC Pros and Cons
• Managerial ethics is a basic part of business ethics. It is the set of moral
principles or beliefs that affect the behavior of employees. While most
people automatically assume that ethics directly correlates to laws, this
isn't always the case. Doing the right thing for employees and customers
and demonstrating the willingness to go the extra mile also falls under
managerial ethics.
• When developing managerial ethics policies, everything is considered.
Compensation and benefit packages, community involvement and
corporate giving are all components of managerial ethics. The policies set
the minimum standards that business leaders expect from the company
down to its people and community.
Managerial ethics is a set of principles and rules
dictated by upper management that define what is right
and what is wrong in an organization. It is the guideline
that helps direct a lower manager's decisions in the
scope of his or her job when a conflict of values is
presented.
 Types of Managerial Ethics
MNC Pros and Cons
• Managerial ethics are broken down into two primary types: those that
pertain to legal issues and those that pertain to moral issues. Company
leaders have a choice, they can do the bare minimum when it comes to
ethics, or they can set a higher standard in their industry and community.

• Legal ethics consider the many rules and regulations for any company.
There are human resource issues such as making sure that people are
hired in a fair process, given a safe work environment and fair pay.
Managers and employees are expected to not break laws by harming,
harassing or otherwise infringing on another person's rights. Minimum
safety standards must be met, as well as the work standards set forth by
the Occupations and Safety Health Administration (OSHA).
 Types of Managerial Ethics
MNC Pros and Cons
•Moral standards of ethics don't necessarily need to align with a company's
legal standards. A company might not be required to offer paternity leave,
but the company might believe that it is important to give fathers their own
time with a newborn.

•Moral ethics could also be how the company deals with customer complaints
to ensure that people feel good about their experience with the company
from the top down.
 Importance of Managerial Ethics
MNC Pros and Cons
• Managerial ethics is important for every company, because people will
follow what leaders do. Even if a company has ethics policies in place,
when top leaders ignore these standards, it resonates throughout the
company. It might mean that some employees might not act ethically, if
they are following the actions of leaders. It could also reduce employee
pride and morale.

• When employees don't think that their leaders care about doing the right
thing, they might feel that their efforts to do right are not valued.
Due to lack of Managerial ethics:

•Morale drops,
•employee turnover increases,
•human resources costs go up,
•and customer loyalty and positive experiences suffer.

• Companies that follow the highest standards of leadership

ethics generally have high morale and very high levels of
productivity and low turnover.
 Managerial Ethics - Example
MNC Pros and Cons
• A company that gives entry-level workers a level of compensation and
benefits that are well above the local minimum wage has morally ethical
policies. Giving employees a generous profit-sharing plan based on the
company's performance, demonstrates that leaders care not only about
their personal profit but also about the growth and success of their
people.
 Managerial Ethics and Individual
MNC Pros and Cons
Decisions
•Wouldn't it be great if everyone just did the right thing all of the time? Of
course it would! But who is to say what is the right thing? What happens
when people don't agree? Who gets to decide? Well, when we're talking
about managerial ethics, setting the standard for ethical behavior in an
organization is best done from the top down.

•Managerial ethics is a set of principles and rules dictated by upper

management that define what is right and what is wrong in an organization. It
is the guideline that helps direct a lower manager's decisions in the scope of
his or her job when a conflict of values is presented.
 Managerial Ethics and Individual
MNC Pros -and
Decisions Cons
Example
• Dan is the production manager for a printing company. Taco Junction, one
of their best customers, placed an order for 5,000 menus, to be delivered
on the first of the month. Dan just found out that the order will be delayed
by one week because someone on his team ordered the wrong paper.
• Dan has a conflict. Should he call Taco Junction and explain what really
happened, or should he lie and shift the blame to the paper supplier,
claiming they sent the wrong paper? Dan surely doesn't want to lose Taco
Junction as a customer, and they're not going to be happy about the delay.
 Managerial Ethics and Individual
MNC Pros and Cons
Decisions
• Luckily for Dan, his company has a clearly defined set of managerial ethics
that covers situations like this. Their policy is simple: don't lie - period!
Even if they lose the customer, it is preferable to losing their values. Dan
knows his company will back him if he calls and tells the truth, even if it
results in a loss of business. Dan picks up the phone and makes the call,
hoping for the best, and knowing he is doing the right thing.
 Define:Ethical
International Marketing
Decision Making

• Ethical decision making frame work requires sensitivity to ethical issues

and an attitude of being fair, just, and caring for those whom the decision
will affect.
 Define:Ethical
International Marketing
Decision Making

• Ethical decision making problems arise for managers and leaders when
decisions involve a moral conflict—that is, a moral situation in which a
person must choose between at least two equally bad choices, or when
there are multiple ethical considerations, some of which conflict with each
other.
• If the decision itself cannot be reframed as a situation in which all parties
can benefit—that is, a win-win situation—then the manager needs a
decision making framework to help.
 Define:Ethical
International Marketing
Decision Making

• Ethical decision making should be done by examining the five principles

of ethics which are: the utilitarian principles, the principles of rights and
duties, the principle of justice, the ethics of virtue and care, and the
principle of common good.
 International
Managerial & Ethical Dimensions
Dilemmas at Work

• An ethical dilemma is a moral situation in which Dilemma a choice has to

be made between two equally undesirable alternatives.
• Dilemma may arise out of various sources of behaviour or attitude, as for
instance,
it may arise out of failure of -- personal character,
---conflict of personal values and
organizational goals,
--- organisational goals versus social values,
etc.
 MNC& Ethical
Managerial Pros and Consat Work
Dilemmas

• A managerial dilemma exists when an organizational decision maker faces a

choice between two or more options that that will have impact on (a) the
organization's profitability and competitiveness, and (b) its stake holders.
• One must act out of prudence to take a better decision as many of the choices
involve conflicts of values.
 How Corporations Observe Ethics to
MNC ProsDilemmas
Reduce and Cons
• Code of personal ethics for employees
– Respect confidential information to which you have access.
– Maintain high standard of professional responsibility.
– Avoid being placed in situations involving conflict of interest.
– Act with integrity.
– Do not discriminate against any body.
– Maintain professional relations based on mutual respect for
individuals and organisations.
– Be committted to the goals of the organisation.
– Do not give up your individual professional ethics.
 How Corporations Observe Ethics to
MNC ProsDilemmas
Reduce and Cons
• Creation of an ethical working environment
– Make the decisions to commit to ethics.
– Recognize that you are a role model by definition, by your action, and
by your values.
– Assume the responsibility for instilling ethical behaviour.
– Articulate your values.
– Train your staff.
– Encourage open communication.
– Be consistent.
– Abide by the laws of the land.
 How to Resolve an ethical problem?
MNC Pros and Cons
• Is it a policy, decision or an action?
• Is it ethical or unethical?
• Following questions need to be answered affirmatively.
– Utility: Does it benefits exceed cost(shareholder)?

– Rights: Does it respect human rights(society)?

– Justice: Does it distribute benefits and burdens evenly(employees)?

 Approaches to Resolve Ethical Dilemma
MNC Pros and Cons
•Deontological
•It is action oriented approach, an ethical standard is consistent with the
fact that it is performed by a rational and free man.
•It raises the questions: Which actions are inherently good?, ‘Doesit respect
the basic right of everyone involved?’, ‘Does it avoid deception, coercion,
and manipulation?’
•Teleological
• It is result oriented approach. It takes a pragmatic, common sense,
layman’s approach. It is concerned actually with to what extent actions
help or hurt people. Actions that produce more benefits than harm are
right actions otherwise wrong.
 Three Step Strategy to Resolve
MNC ProsDilemma
Ethical and Cons
• It converges Deontological Approach and Teleological Approach.

•Step 1: Analyze the Consequences

•Step 2: Analyze the Actions

•Step 3:Make a Decision

Thank You