¡Q: Should Apple be responsible for ensuring that its suppliers are safeguarding  the basic rights and dignity of their employees?  How can Apple be sure that its suppliers do not employ sweatshop labor?    Some will probably agree that Apple should be responsible at least to some degree for ensuring that the factories where it sources its products are safe.  Some may suggest that to knowingly buy products from a company with substandard working conditions is a violation of basic human ethics.  Other however, may argue that Nike cannot force suppliers to adopt specific practices and policies toward labor.  Whoever takes this perspective might suggest that pushing American practices on Chinese companies is ethnocentric, and that for many Chinese the prospect of having a job, even in poor working conditions, is better than having no job at all.  Many may be surprised that Apple did not already have an audit policy in place prior to the accusations by the Chinese reporters, but will probably agree that the company handled the situation appropriately. ¡ Q: The allegations against Hongfujin Precision Industries were made by two Chinese reporters.  Discuss the implications of this for other Chinese companies    Some of you will probably agree that the fact that the allegations against Hongfujin Precision Industries were made by Chinese reporters who work for China Business News, a state run newspaper, could have interesting implications for other companies.  Some will probably suggest that it should serve as a signal to other companies that poor working conditions are unacceptable. In the past, it may have been possible to hide them, it is no longer the case.  Others may suggest that the allegations may force companies to rethink their production and look for new ways to increase productivity.  Some may note that the very fact that the report was published is startling in some regards, and that companies should anticipate further scrutiny. Human Rights

   Question: What is the responsibility of a foreign multinational when operating in a country where basic human rights are not respected?

     Basic human rights taken for granted in the developed world such as freedom of association, freedom of speech, freedom of assembly, freedom of movement, and so on, are by no means universally accepted ¡white rule & apartheid system in S. Africa ¡Myanmar, Nigeria            Environmental Pollution      Question: Should a multinational feel free to     pollute in a developing nation if doing so does not violate laws?           ¡When environmental regulations in host nations are far inferior to those in the home nation, ethical issues arise           ¡The tragedy of the commons  occurs when a resource held in common by all, but owned by no one, is    overused by individuals resulting in its degradation ¡Why did Unocal’s investment become so controversial?  Did Unocal behave in an ethical manner?   ¡A 1996 law suit against Unocal was dismissed on the grounds that the Unocal could not be held liable for the actions of a foreign government against its own people, although the judge noted that the company was aware of what was going on in the country.  Discuss the difference between acting in an ethical manner and acting according to the law. Corruption

    Question: Is it ethical to make payments to government officials to secure business?

   ¡In the United States, the Foreign Corrupt Practices Act outlawed the practice of paying bribes to foreign government officials in order to gain business (the Lockheed case)

   ¡The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions adopted by the Organization for Economic Cooperation and Development (OECD) obliges member states to make the bribery of foreign public officials a criminal offense (but excludes facilitating payment made to expedite routine government action from the convention????)

¡Some economists suggest that the practice of giving bribes might be the price that must be paid to do a greater good

      ¡In countries where preexisting political structures distort or limit the workings of the market mechanism, corruption in the form of black-marketeering, smuggling, and side payments to government bureaucrats to “speed up” approval for business investments may actually enhance welfare  

      ¡However, other economists have argued that corruption reduces the returns on business investment and leads to low economic growth

Moral Obligations

    Question: Do multinationals have a responsibility to give back to the societies that enable them to grow and prosper?

     ¡The concept of social responsibility refers to the idea that business people should take the social consequences of economic actions into account when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and good social consequences     ¡Noblesse oblige Management Focus:

        News Corporation in China ¡Consider the allegations against Robert Murdoch.  Did he behave in an ethical manner if he suppressed media content that was critical of China? ¡ ¡Newspapers and news programs are frequently criticized for giving biased reports of events.  What standards should these organizations hold to?  Did News Corporation hold to these standards? ¡News Corporation