ETHICS IMPORTANT TO INTERNATIONAL BUSINESS
Utilitarianism
This theory says companies should maximize benefits and minimize
harms for all stakeholders. Managers following utilitarianism take a
pragmatic approach - they focus on crafting solutions that produce the
greatest good. For example, Unilever strengthened its reputation and
competitiveness by prioritizing sustainability initiatives that serve
interests of shareholders, customers, employees and communities. The
company frontloaded costs to cut emissions across its entire value chain
by 2039, a monumental task requiring early buy-in from investors. But
Unilever's leadership understood that taking care of societal needs is
fundamental to long-term business success.
Rights Theory
Core to rights theory is the belief that as human beings, we all possess
inherent and equal entitlements regardless of personal attributes. These
freedoms include things like fair work conditions, property ownership and
payment. Respecting rights should underpin any company's global
policies. Forcibly employing vulnerable groups like children or ethnic
minorities violates basic human dignity. Companies must also ensure
exports and supply chains aren't complicit in abuse. The UN Declaration of
Human Rights provides a moral framework anchoring this vision of just
treatment.
Theory of Justice
This perspective envisions a cooperative society where opportunities and
resources are distributed in a fair, unbiased manner. Rawls argued an
equitable social contract benefits all, including disadvantaged
communities, through things like guaranteed minimum wages. Applying
justice as fairness, managers find solutions respecting equity for
stakeholders. For example, VF Corporation promotes diversity globally
through education initiatives empowering underrepresented groups and
women.
Cultural Relativism
Some argue adopting local norms wherever a company operates shows
open-mindedness. However, others counter this can justify unethical acts
by claiming all views are equally valid. Absolute moral truths do exist
regarding issues like child labor. While respecting cultural differences,
businesses must also guard universal principles of dignity.
WHAT IS INTERNATIONAL BUSINESS?
When we talk about international business, we mean any commercial
transaction crossing between two or more countries. Without even
realizing it, we engage in international business daily. When we wake up to
an iPhone made in China, listen to a British podcast at breakfast, get
dressed in clothes from India and Vietnam, drive a Korean car built in
Alabama, and grab coffee from Colombian and Ethiopian beans - we've
unknowingly taken a virtual trip around the world before our day has
barely started! The "Made in" tags on our things show how pervasive
international business is, making foreign products part of our everyday
lives through cross-border design, manufacturing and sales.
No matter where you are, you're surrounded by imported goods and
services. And your country's exports reach counterparts globally. Around
$19 trillion worth of merchandise and $6 trillion worth of services are
exported annually worldwide. International transactions make the
products we use available.
This book covers the many factors influencing international business, from
policies to corporate activities to social issues and people. Individuals are
key in the ebb and flow of international business across periods of
cooperation and tension between nations, which then impacts companies,
managers, workers and consumers. Today brings new international
business challenges and opportunities.
Tensions Between Major Powers
Tensions between the U.S. and China highlight cultural, political and
economic differences. Technology theft concerns reinforce tighter global
supply chain control. The pandemic exposed vulnerabilities when demand
shot up, causing shortages. Companies now diversify sources to shelter
key supplies. Meanwhile, entrepreneurship blossomed to meet urgent
COVID-19 needs.
Work and Jobs
Work contributes to identity and lifestyle. White-collar employees adopted
remote work while blue-collar workers continued on-site. Digitalization
transforms required skills as work grows more complex across
occupations, so employees hone technical and social skills through
lifelong learning.
International Leadership
Leadership also varies by culture - what motivates teams and
accomplishes goals. Expat managers abroad can succeed by grasping
local perspectives. As we'll explore, international business covers a
shifting range of topics centered on people.
Key Players in International Business
While large multinationals from developed nations dominate, companies
of all sizes in all industries engage internationally – aided by technology,
small firms are increasingly active.
A multinational corporation (MNC) has direct investments in marketing or
manufacturing subsidiaries in multiple countries. Investing directly abroad
through foreign direct investment means acquiring physical assets or
significant ownership elsewhere to gain control. Alongside importing and
exporting, this is a main way firms engage internationally.
Multinationals bring jobs, investment and taxes but can also cut jobs when
scaling back. Their mergers are worth billions and increasingly involve
emerging market firms. Some rival small nations in employee count and
revenue. Expanding beyond home markets, they seek new international
customers.
Information technology spawned born global firms with an international
perspective from the start. They achieve competitive advantage quickly,
unlike traditional multinationals that start domestically. Born globals
leverage innovative, hard-to-imitate capabilities and IT infrastructure to
expand rapidly through well-designed apps and programs.
