Международная Школа Бизнеса (мшб) ibs-plekhanov Тематический модуль Этика бизнеса





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Министерство общего и профессионального

образования Российской Федерации

Российский Экономический Университет

имени Г.В. Плеханова

Международная Школа Бизнеса (МШБ)

IBS-Plekhanov

Тематический модуль

Этика бизнеса

Москва 2011

Составители: Л.Б. Филиппова

М.С. Циликова

И.В. Аввакумова

Л.П. Тимошенко

Е.Е. Сидорова

О.В. Осипова

Т.Ю. Вепрецкая

Тематический модуль «Этика бизнеса» (Business Ethics)/ Сост. Л.Б. Филиппова, М.С. Циликова, И.В. Авакумова, Л.П. Тимошенко, Е.Е. Сидорова, О.В. Осипова, Т.Ю. Вепрецкая.

М.: Рос. Экон. Унив., 2011

Содержит тексты и задания к тематическому модулю «Этика бизнеса» по курсу английского языка

Предназначены для студентов факультета МШБ.

Business Ethics

Lead in

Introduction into the course

THOUGHTS TO PONDER:

  • ‘A business that makes nothing but money is a poor kind of business’ (Henry Ford, US industrialist 1863-1947)

  • ‘The one and only social responsibility of business is to make profits’ (the economics guru Milton Friedman)

The subject of ethics forms a central element in managerial responses to social forces. In many situations, an individual must reach a personal decision in regard to what is the right thing to do. In this process, the individual may look to philosophy or religious beliefs concerning what is right and wrong or may turn to history and laws for guidelines.

Recent years have seen a proliferation of academic articles and media commentary concerning “corporate social responsibility”, with the search for consistent corporate positions on these issues. Many firms have sought to develop guidelines and formal statements that can assist employees when they confront ethical dilemmas. However, it is not easy for an organization to develop clear and useful pronouncements. Values, cultural behaviors, and even ethical standards differ significantly among countries. For some issues, such as those relating to social interaction, there may be a general acceptance of local norms. For certain issues, such as prohibitions against bribery of government officials, some firms attempt to enforce their home-country code of conduct globally while realizing that this could handicap their financial success; other firms adapt to local practices. In each country, managers need to understand such cross-cultural differences and consider what adjustments in corporate practices would be appropriate.

Recent years have also witnessed a proliferation of stakeholder groups who believe that their views should be incorporated into the decision-making process of the firm. Stakeholders may use a variety of mechanisms to influence corporate decisions.

Several subject areas have become particularly important as the focus for corporate social responsibility and stakeholder actions. Concerns about environmental pollution now cover a host of corporate activities. Investments in new technologies to reduce pollution may be expensive, and so investment decisions can also be affected by differences in environmental regulations and labor standards, as firms locate in countries with lower standards and/or lax enforcement. There is a concern that corporations may tend to invest in less developed countries because they have lower environmental standards. At the same time, air and water cross national boundaries, and so corporate pollution has increasingly become an international concern, with new international agreements creating new environmental regulations.

Government programs and policies are affected by societal pressures, and societal pressures may also affect a firm directly. Societal forces differ significantly among countries, and they change significantly over time. Corruption and human rights violations have become international concerns rather than just domestic issues and have led to new international agreements that seek to create common standards. For businesses, trade sanctions in response to human rights violations pose a recurring dilemma. The repressive violation of human rights has led people throughout the world to urge their governments to place embargoes on certain countries, placing a halt to trade and investment with them.

The current ‘antiglobalization debate’ deserves consideration because many express the view that poverty and inequality have been exacerbated by the reduction of trade and investment barriers. Antiglobalization protestors blame corporations for exploiting less developed countries in their trade and investment decisions. This debate extends to the obligations that rich nations should accept in assisting poor nations in the development process, including criteria for foreign aid and debt forgiveness.

Both shareholders and stakeholders look to boards of directors for leadership and corporate decision making in many of these societal issues. Consequently, the role and responsibilities of boards of directors have tended to increase in many countries.

1. In teams

A. Look through the text and make a list of forces that make companies start thinking about business ethics. Compare your list with members of other teams.

B. Make a list of stakeholders of a corporation who may be interested in ethical activity of a company. How can each group influence a company?

Should companies demonstrate greater responsibilities and accountability to stakeholders? Why (why not)? Present your findings in class.

C. In what ways, if any, do you think a company is responsible to the following groups: shareholders, employees, suppliers, customers and the wider community? Can you think of any other groups? Report to the class.

HOME ASSIGNMENT - 1. Write a short summary (50 words) on the basis of your discussion concerning company’s responsibilities to stakeholders.

2. Read the article “How good should your business be?” , write a summary of 100 words, make up word lists (word – translation – English definition – an example of using the word in a sentence)

Unit 1

Discussion points:

  • Do you think multinational companies operating in poor or developing countries have a duty to improve the quality of people’s lives in these countries? Why (not)?

How good should your business be?

Jan 17th 2008
From The Economist print edition

Corporate social responsibility has great momentum. All the more reason to be aware of its limits











HOW wonderful to think that you can make money and save the planet at the same time. “Doing well by doing good” has become a popular business mantra: the phrase conjures up a Panglossian best-of-all-possible-worlds, the idea that firms can be successful by acting in the broader interests of society as a whole even while they satisfy the narrow interests of shareholders. The noble sentiment will no doubt echo around the Swiss Alps next week as chief executives hobnob with political leaders at the World Economic Forum in Davos.

For these are high times for what is clunkingly called corporate social responsibility (CSR). No longer is it enough for annual reports to have a philanthropic paragraph about the charity committee; now companies put out long tracts full of claims about their fair trading and carbon neutralising. One huge push for CSR has come from climate change: “sustainability” is its most dynamic branch. Another has been the internet, which helps activists scrutinise corporate behaviour around the globe. But the biggest force is the presumption that a modern business needs to be, or at least appear to be, “good” to hang on to customers and recruit clever young people.

Thus for most managers the only real question about CSR is how to do it. It is also worth repeating a more fundamental question asked before: is the CSR craze a good thing for business and for society as a whole?

Begin with business, where the picture is mixed. Much good corporate citizenship is a smug form of public relations. Public relations is part of business. A bad name has seldom been more expensive, especially when there is a war for talent and customers can look at your supply chain in Vietnam on YouTube. Public companies, remember, are creations of the state. In return for the privilege of limited liability, society has always demanded vaguely good behaviour from them. The cost of this implicit social franchise, whether shareholders like it or not, has risen. Companies as varied as Nike in clothing, GlaxoSmithKline in pharmaceuticals and Wal-Mart in retailing have had to change their ways quickly to avoid consumer or regulatory backlashes.

And it is not just a question of fending off disaster. CSR has got more focused: there are fewer opera houses, more productive partnerships with NGOs. Greenery, in particular, has paid off for some companies' shareholders. Toyota stole a march on other carmakers by appearing greener. European power companies which helped set up the continent's carbon-trading system did extremely well out of it.

Some people complain that this sort of “good corporate citizenship” is merely another form of self-interest. Correct — and good. They should be happy that this category has grown. The difficulties with CSR come when companies get it out of proportion. For instance, there is a lot of guff about responsibility being at the core of a firm's strategy. But even the business gurus who promote the idea admit that examples are scarce. And being a champion at responsibility does not guarantee great financial results, as recent setbacks at Starbucks and Marks & Spencer have shown.

An inconvenient truth for advocates of CSR is that the connection between good corporate behaviour and good financial performance is fuzzy at best. The latest academic research suggests that a positive link exists, but that it is a weak one. Of course, it's not clear which way the causality runs—whether profitable companies feel rich enough to splash out on CSR, or CSR brings profits. Either way, there is no evidence to suggest that CSR is destroying shareholder value, as Milton Friedman and others feared. But nor is it obviously the most productive way for managers to spend their energies. Caution is especially called for at a time when the CSR bandwagon is on a roll.

If companies need to be vigilant about the limits of CSR, the same applies even more to society as a whole. A dangerous myth is gaining ground: that unadorned capitalism fails to serve the public interest. Profits are not good, goes the logic of much CSR; hence the attraction of turning companies into instruments of social policy. In fact, the opposite is true. The main contribution of companies to society comes precisely from those profits (and the products, services, salaries and ideas that competitive capitalism creates). If the business of business stops being business, we all lose.

Most of the disasters have come from politicians seeking to offload public problems onto business: American health care is one sad example. But companies are increasingly keen on public policy. Take for instance, the vogue for “multi-stakeholder initiatives”—firms getting together with competitors, activists and others to set rules for a particular area of business (diamonds, project finance, extractive industries and so on). In some impoverished places such “soft law” helps to fill a void. But be wary: businesses do not always adhere to voluntary rules; they naturally want ones that help them make money. Above all, it is governments, not firms that should arbitrate between interest groups for the public interest.

So the apparent triumph of CSR should prompt humility, not hubris. There is money to be made in doing good. But firms are not there to solve the world's political problems. It is the job of governments to govern; don't let them wiggle out of it.

§

word or phrase

Russian equivalent




Momentum

движущая сила; импульс, наступательный порыв

1

Conjure up

заставлять появиться как по волшебству; вызывать в воображении




Panglossia

Наивно-оптимистичный (герой Вольтера –Панглосс- глупец-философ)




Sentiment

чувство; дух (произведения искусства и т.п. в противоп. форме); сентиментальность; мнение; отношение; настроение; мысль




Hobnob

наугад; наобум; напропалую; фамильярно; запросто; по-приятельски; по-свойски; чокаться; пить за здоровье друг друга; якшаться; фамильярничать

2

High times

самое время




Clunk

глухой металлический звук




Philanthropic

благотворительный




Tract

трактат; брошюра




Sustainability

устойчивое развитие




Scrutinize

внимательно рассматривать; разглядывать; тщательно проверять




Presumption

предположение; допущение; основание для предположения; вероятность; самонадеянность; наглость; презумпция

3

Craze

мания; пункт помешательства; мода; общее увлечение; трещина в глазури; поветрие

4

Smug

самодовольство , снобизм , чопорность, пафос




Regulatory

нормативный; предписывающий




Backlash

неожиданное сильное движение назад; ответный удар; отрицательная реакция

5

Fend off

парировать; держать на расстоянии, предотвращать




Steal a march on smb

перейти дорогу кому-л; упреждать противника; совершать марш скрытно от противника

6

Guff

пустая болтовня

7

Fuzzy

нечёткий; размытый




Causality

причинная связь или обусловленность




Shareholder value

акционерная стоимость; биржевая стоимость акции

8

To be vigilant about

бдительный; бессонный; неусыпный




Unadorned

неукрашенный; без прикрас




Hence

следовательно; в результате; отсюда

9

To offload

освобождать от излишней загрузки; разгружать




Impoverished

бедный; обедневший; доведённый до нищеты; истощённый; убогий; жалкий; скудный; обнищалый




Adhere to

придерживаться, оставаться верным (принципам)




Void

пустота; вакуум; пустое место; пробел




Wary

осторожный; осмотрительный; насторожённый; подозрительный; недоверчивый; опасливый

10

Apparent

видимый; различимый (легко); явный; очевидный; несомненный; наглядный; кажущийся; бесспорный; наблюдаемый; истинный




Humility

смиренность; скромность; застенчивость; незначительность; смирение




Hubris

высокомерие; гордыня




Wiggle out

выкрутиться

Discuss your word list, definitions and examples with your team members.

I. Answer the following questions:

1. How do you understand the term “Doing well by doing good”?

2. Why is the current situation a high time for CSR?

3. What ways to do “responsible business” could you suggest?

4. Isn’t “good corporate citizenship” merely another form of self-interest?

5. What multi-stakeholder initiatives does the article mention and what is their impact on the development of the countries’ economies?

II. Work on the structure of the article. Single out the main ideas.

III. Discussion and team work

1. In teams discuss the summaries and formulate a thesis statement

2. Discussion topics: Split into three teams. Prepare mini-presentations

Team 1: “Good corporate citizenship” doesn’t guarantee great financial results.

Team 2:   Potential risks for a company of being socially responsible.

Team 3: Unadorned capitalism fails to serve the public interest.

IV. In teams brainstorm the topic “CSR should prompt humility, not hubris.”

HOME ASSIGNMENT : 1. What type of social programmes are some well-known multinational companies involved with? Use the Internet to help you find out. Which programmes do you like most and why? Write about this programme (in not more than 100 words).

2. Read the article “A stitch in time”, write out topical vocabulary, make a list of companies which ran into difficulties due to unethical activities).

Unit 2

Discussion points:

1. In teams discuss the lists of companies and enumerate the reasons for their problems

2. How do you understand the title of the article?

  1. Should CEOs and senior management be held legally responsible for actions taken by other members of staff? What penalties should there be for companies that commit the following violations?

  • Polluting the environment

  • Employing child labour

  • Not providing a safe working environment

  • Lying to shareholders about the financial position of the company

  • Selling unsafe products to consumers

  • Fixing prices

  1. Governments in the US and the EU are considering legislation to stop food companies advertising junk food to children. How far should the food industry be held responsible for people’s health problems?

  2. To what extend do you think other types of industries (tobacco, mobile, pharmaceutical, etc.) should take responsibility for people’s health problems?


A stitch in time

Jan 17th 2008
From The Economist print edition

How companies manage risks to their reputation










BUSINESS leaders embrace corporate responsibility for a number of reasons. Lee Scott, the CEO of Wal-Mart, was converted to it by the aftermath of Hurricane Katrina (which showed his company's full potential to serve “not just our customers but our communities, our countries and even the world”). Others are lured by the glamour of making pledges at the Clinton Global Initiative. For some, though, it is public embarrassment and lawsuits that concentrate the mind.

Take Yahoo!, a technology company that ran into difficulties over the jailing of two Chinese dissidents after the company handed data on them to the Chinese authorities. In November Yahoo!'s chief executive, Jerry Yang, and its top lawyer had to listen to Tom Lantos, a congressman, denounce them as technology giants but moral pygmies. The following week Yahoo! reached an out-of-court settlement with the families of the jailed men.

Trouble seems to come in waves, pounding industry after industry, each time for a different reason. It has hit the oil business because of spills and explosions. Mining companies have come under attack for collusion with corrupt governments. Clothing companies have faced scandals over the use of sweatshop or child labour. The petfood industry was pilloried after cats were killed by tainted imports from China. Mattel and other makers had to recall millions of toys made in China on safety grounds.

Most of the rhetoric on CSR may be about doing the right thing and trumping competitors, but much of the reality is plain risk management. It involves limiting the damage to the brand and the bottom line that can be inflicted by a bad press and consumer boycotts, as well as dealing with the threat of legal action.

In America, the legal instrument of choice (as in the Yahoo! case) is the Alien Tort Claims Act, which allows companies to be taken to court in America for violating human rights abroad. Under international law only states can be held responsible for violating human rights, but allegations of complicity in state abuse can provide a hook for legal claims against companies. Even if it does not get as far as a trial, this can be embarrassing and costly for companies.

Three years ago Unocal, a Californian oil company, settled out of court (reportedly for some $30m) over allegations of complicity in abuses by government soldiers against villagers in Burma during the construction of a pipeline in the 1990s. However, the company denied any responsibility. Another oil company, Talisman Energy, discovered that being Canadian was no protection against a legal claim in the United States. It was facing a lawsuit by the Presbyterian Church of Sudan alleging complicity in genocide in Sudan, where Talisman had invested in the Greater Nile Oil Project—even though Talisman, under pressure from human-rights groups, had sold its stake back in 2002.

For the moment, though, the biggest problem many companies have to deal with is something that has sprung from rapid globalisation. It is the risks associated with managing supply chains that spread around the world, stretching deep into China, India and elsewhere. For some, this is a challenge on a grand scale: Nike's contractor network, for example, involves some 800,000 workers.

Firms can set standards of behaviour for suppliers, but they do not find it easy to enforce them. Unscrupulous suppliers may cheat, keeping two sets of records, one for show, one for real. Others, under intense pressure to keep costs low, may cut corners—allowing unpaid overtime, for example, or subcontracting work to other firms that escape scrutiny.

And on top of the need to guarantee labour standards and product safety across an extended network, a new demand is starting to emerge: companies have to consider the environmental “sustainability” of their suppliers too. So inspection regimes are set to intensify, at a time when audit fatigue has already become a problem for suppliers. Surveys suggest that a typical garment factory may expect to be inspected 25 times a year. Levi Strauss, Timberland and others in the industry are starting to collaborate on inspections to reduce the burden on suppliers.

Involvement in social programmes, especially in poor parts of the world, is an increasingly fashionable way for a company to burnish its brand and, with luck, protect itself from attack. Which self-respecting CEO these days wants to be caught doing nothing for Africa? But sometimes these programmes also have a clear business rationale. Anglo American, for example, says the $10m a year it spends on HIV testing and treatment in Africa is starting to pay for itself through reduced absenteeism and longer lives for skilled workers.




The big drugs companies, for their part, were greatly embarrassed by accusations of ignoring the needs of Africans dying from HIV/AIDS, so GlaxoSmithKline and others decided to make HIV drugs available for no profit. Merck has entered an innovative partnership to fight AIDS with the Bill & Melinda Gates Foundation and the government of Botswana, where the proportion of sufferers being treated is now the highest in Africa. Since 1987 Merck has also donated 1.8 billion tablets to treat river blindness, reaching more than 60m people a year in Africa, Latin America and the Middle East. All this helps to quieten the critics. The involvement in emerging markets may even prove a good investment in future growth.

Novo Nordisk, a Danish company that supplies a big share of the world's insulin, has written the “triple bottom line”—that is, striving to act in a financially, environmentally and socially responsible way—into its articles of association. It reckons that having the creed anchored so firmly is making it more alert to both risks and opportunities.










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