Weekly Reflection

APPLE’S CHALLENGES IN ENFORCING ITS SUPPLIER CODE OF CONDUCT

Concepts & Connections 9.1

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The School of Ethical Universalism

According to the school of ethical universalism…

Some concepts of what is right and what is wrong are universal and transcend most all cultures, societies, and religions.

All societies, companies, and individuals are accountable to a set of universal ethical standards.

Where basic moral standards really do not vary significantly according to local cultural beliefs, traditions, or religious convictions, a multinational company can develop a code of ethics that it applies more or less evenly across its worldwide operations..

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According to the school of ethical universalism, the same standards of what’s ethical and what’s unethical resonate with peoples of most societies regardless of local traditions and cultural norms; hence, common ethical standards can be used to judge employee conduct in a variety of country markets and cultural circumstances.

CORE CONCEPT

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Examples of Universal Ethical Principles or Norms

Honesty

Trustworthiness

Respecting the rights of others

Practicing the Golden Rule

Avoiding unnecessary harm to:

Workers

Users of a company’s product or service

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The School of Ethical Relativism

This school of ethical thought holds that…

What is to be deemed ethical or unethical behavior must be judged by local social and moral standards.

It is appropriate for local moral standards to take precedence over ethical standards in a company’s home market.

The risks of ethical relativism

The assumption that local morality is an adequate guide for ethical behavior.

Loss of the moral basis for enforcing companywide ethical standards across the differing markets of a multinational firm.

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According to the school of ethical relativism, different societal cultures and customs create divergent standards of right and wrong—thus, what is ethical or unethical must be judged in the light of local customs and social mores and can vary from one culture or nation to another.

CORE CONCEPT

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Integrative Social Contracts Theory

The ethical standards a firm should uphold are governed by:

A limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations.

The circumstances of local cultures, traditions, and values that further prescribe what constitutes ethically permissible behavior and what does not.

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According to integrative social contracts theory, universal ethical principles based on collective views of multiple cultures combine to form a “social contract” that all employees in all country markets have a duty to observe. Within the boundaries of this social contract, there is room for host country cultures to exert some influence in setting their own moral and ethical standards. However, “first-order” universal ethical norms always take precedence over “second-order” local ethical norms in circumstances where local ethical norms are more permissive.

CORE CONCEPT

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Ethics: It Is Not As Easy As It Seems

Integrative social contracts theory provides:

That “first order” universal ethical norms always take precedence over “second order” local ethical norms when local norms are more permissive.

Ethical “gray areas”

There are many instances where cross-country differences in ethical norms create situations where it is tough to draw a line in the sand between right and wrong decisions, actions, and business practices.

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Strategy, Corporate Social Responsibility and Environmental Sustainability

Engaging in corporate social responsibility involves the firm’s assumption of a series of responsibilities:

Economic responsibility to shareholders

Legal responsibility to comply with the laws of the countries where it operates

Ethical responsibility to abide by society’s norms

Discretionary philanthropic responsibility to meet the unmet needs of society

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Corporate social responsibility (CSR) refers to a company’s duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.

CORE CONCEPT

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Common Corporate Social Responsibility (CSR) Initiatives

Efforts to employ an ethical strategy and observe ethical principles in operating the business

Making charitable contributions, supporting community service endeavors, engaging in broader philanthropic initiatives, and reaching out to make a difference in the lives of the disadvantaged.

Actions to protect the environment and, in particular, to minimize or eliminate any adverse impact on the environment stemming from the firm’s own business activities.

Actions to create a work environment that enhances the quality of life for employees.

Actions to build a workforce that is diverse with respect to gender, race, national origin, and other aspects that different people bring to the workplace.

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A company’s corporate social responsibility strategy is defined by the specific combination of socially beneficial activities it opts to support with its contributions of time, money, and other resources.

CORE CONCEPT

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