International business notes Domestic transaction: the selling of items produced in the same country International transaction: the selling of items produced in other countries Foreign trade: involves exchange of one type or another transaction Global economy: participating in an international transaction Global product: a standardized item that is offered in the same form in all the countries Benefits for business: ● Access to markets ● Cheaper labor ● increased quality of goods ● increased quantity ● Access to resources The five Ps of business: ● Product ● Price ● Proximity ● Promotion ● Preference Costs of international trade: social costs ● Offshore outsourcing ● Environmental degradation ● Human rights and labor abuses, Straw Men Arguments of Ethics: Friedman Doctrine: only social responsibility of business t=is to make a profit (within the law) Cultural relativism: "When in Rome, do as the Romans do." Righteous moralist: developed nation ethics are appropriate abroad Naïve immoralist: violate ethical norms because other firms do so More Useful Ethical Approaches:
Utilitarian (Mill) (greatest good for greatest number; maximize good, minimize harm; but how to measure costs, benefits, risks) Kantian (treat people as ends, with dignity, not means to ends of others) Rights theories (UN) Justice theories (Rawls's veil of ignorance, difference principle: inequalities justified if Least-advantaged people benefit). Roots of Unethical Behavior Violation of personal ethics of right and wrong- "Prince of Jews" bilked Jewish Charity defrauding the charity for decades the Prince is in jail now neglecting to ask if a business decision has ethical implications for various stakeholders is off shoring to Botswana good for business? Is it good for costs? It will be good for the company economically, but what will happen to the labor force in Boston? Organizational values and norms promote unethical behavior.