BUS613: Advanced International Business

7a. Analyze how businesses can operate internationally with a focus on social responsibility and ethics 

• What does corporate social responsibility mean, and how can it be implemented?
• What challenges might a company face in terms of social responsibility and ethics when they start operating in a new country and culture?
  

Consumers increasingly place a greater value on social responsibility and make purchases from companies that develop a good reputation. Corporate social responsibility, which is essentially self-regulation by internal policy that aims to place the company's image and good reputation based upon philanthropy and responsible environmental activities. Environmental sustainability has become an increasingly important virtue for large corporations, as they have adjusted outdated procedures to support environmentally responsible policies. Corporations face many challenges in maintaining these principles as they enter new international markets, which may not regulate certain behavior or perhaps place less emphasis on these areas.
 
To review, see Corporate Social Responsibility.
 

7b. Examine the risks involved with a global company in terms of preserving ethical behavior 

• What risks do a company encounter when trying to preserve ethical behavior and maintain certain compliance measures when they enter new international markets?
• How can a company mitigate and overcome these risks?
  

Global companies experience many risks when entering a new international market, from operational and financial risks to other things outside their control. However, they all face risks associated with preserving ethical behavior domestically and abroad. For example, companies may encounter bribery expectations in certain countries in order to attain licenses or access to new business opportunities. Fair trade is a mechanism designed to assist producers in developing countries with standards of labor payment and environmental sustainability practices that certify these for purchasers in other nations, commonly in developed countries.
 
To review, see Business Ethics over Time and Corruption, Bribery and the Foreign Corrupt Practices Act (FCPA).
 

7c. Explain global sustainability and understand how to pursue these opportunities in the international market 

• Is it possible to have economic sustainability while having environmental sustainability? What challenges are present in balancing these two areas?
• What areas of environmentally friendly business ventures can turn a profit and create growth-oriented corporations?
  

Environmental issues regarding corporate responsibility have increasingly been a major topic for consumers in the global market. As consumers have placed a higher value on this in regard to their purchase decisions, companies have been forced to prioritize this among other areas in the business that may have previously been better funded and received greater focus. New industries have developed to fulfill this sustainability need, such as solar, wind, and hydroelectric power projects.
 
To review, see Business and Environment, Economic Sustainability, and Environmental Sustainability.
 

7d. Compare and contrast return on investment (ROI) models for corporate social responsibility, such as those including community involvement and public perception 

• How can a company that has invested money into maintaining a good image and reputation for corporate social responsibility turn that into a return on investment (ROI)?
• Are there companies with a bad reputation for social responsibility still performing well?
  

Companies today are investing large sums of money in creating and maintaining a good image for social responsibility. Publicly-traded companies need to justify this investment and tie it to certain financial goals. Companies have established new career opportunities to analyze and manage this business area. Some companies invest large sums of money in this area and turn it into a profit. We have seen this occur in certain industries, such as an oil and gas company that invests a large sum into renewable energy projects and creates an image of an environmentally friendly corporation.
 
To review, see Corporate Social Responsibility.
 

7e. Explain how the rule of law applies to maintaining social responsibility and codes of ethics, as well as business challenges related to the rule of law 

• Are all ethical issues also legal issues?
• When can the law be involved when an ethical expectation has been violated?
• Do companies still operate unethically and never experience legal consequences?
  

Companies often encounter the same moral questions as individuals: if something is unethical but not illegal, then how important is it to me? Consumers over recent decades have answered this question and may voice their support or displeasure with a company based on their behavior through their purchase decisions. For example, in the past, a company may have outsourced its manufacturing to a country with limited or no labor protection laws to attain the lowest cost. However, today, they should analyze how their consumer base would perceive this practice. This has forced some companies to implement and monitor the labor conditions of all their subcontractor facilities in overseas locations.
 
The Foreign Corrupt Practices Act (FCPA) is a law in the United States that can be applied and enforced against all American companies and individuals regarding actions outside of the U.S. regarding bribery, corruption, and other similar areas of conduct. American multinational corporations must emphasize compliance in this area to avoid large penalties and fines.
 
To review, see Business Ethics over Time and Corruption, Bribery and the Foreign Corrupt Practices Act (FCPA).
 

Unit 7 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• corporate social responsibility
• environmental sustainability
• fair trade
• Foreign Corrupt Practices Act (FCPA)