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Ethical Issues in International Business

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  • 0:01 International Business
  • 0:50 Corruption
  • 2:00 Employment
  • 2:38 Pollution
  • 3:22 Improving Global Ethics
  • 4:06 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Lombardo
Corporations that tackle the global market face many difficulties. In this lesson, we will examine the ethical issues in international business, such as corruption, pollution, and environmental challenges.

International Business

Neon Garb is an international manufacturer of retro 80s clothing. The company is growing at an incredible rate globally. Business managers are under an enormous amount of stress dealing with different cultures and satisfying their stakeholders. In the global environment, there is even a greater challenge of battling corruption, monitoring workplace conditions, and environmental issues.

Neon Garb will show us how they are dealing with ethical issues in the international marketplace, with specific attention paid to corruption, working conditions, environmental issues, and a global code of ethics. Let's examine Neon Garb's international business, or business transactions that take place between two or more countries outside their political boundaries.

Corruption

One of Neon Garb's biggest struggles in developing their international business has been concern with corruption, or the abuse of power for financial gain in foreign countries.

The countries that Neon Garb has found to be highly ethical, such as Denmark, Canada, and New Zealand, all have a strict ethical code of conduct. On the contrary, continents and countries such as Asia, South America, and Russia, which do not have ethical business codes, have made Neon Garb deal with corruption issues, such as:

  • Sweatshop conditions in their factories in South America
  • Expected bribes to conduct business in Russia
  • Deceptive advertising by some of their overseas subsidiaries
  • Activities that harm the environment with their factories in Asia

What is the answer? Neon Garb has taken ethical steps to eliminate issues and take control of their global operations by creating a global sustainability strategy, integrated ethical approach overseas, and strong relationships with all of their global stakeholders.

Employment

Another ethical issue facing Neon Garb is employment factors, such as wages and working conditions. Neon Garb's factory conditions fluctuate depending upon the country. For example, Neon Garb was having difficulty with child labor issues in their factories in Asia. The solution was to create their own company standards that will protect workers yet be accepted by the local marketplace. Neon Garb's employment standards are to provide a good wage, protection of workers, and a fair number of employment hours.

Pollution

Neon Garb is also challenged with maintaining an environmentally sound operation overseas and eliminating pollution. Many foreign countries do not have protective environmental regulations, which results in companies polluting resources. One way Neon Garb maintains ethical production globally is to use conservative environmental policies to limit the company's environmental footprint in other countries. For example, Neon Garb uses alternative energy sources, such as wind and solar. The company follows the same energy conservation overseas as they do with the strict U.S. environmental regulations.

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