Chapter 5 Culture, Management Style, and Business Systems 159 dilemma of responding to sundry situations where local law does not exist, where local prac-tices appear to condone a certain behavior, or where a company willing to “do what is neces-sary” is favored over a company that refuses to engage in certain practices. In short, being socially responsible and ethically correct are not simple tasks for the international marketer.79 Ethical Decisions. In normal business operations, difficulties arise in making decisions, establishing policies, and engaging in business operations in five broad areas: (1) employment practices and policies, (2) consumer protection, (3) environmental pro-tection, (4) political payments and involvement in political affairs of the country, and (5) basic human rights and fundamental freedoms. In many countries, laws may help define the borders of minimum ethical or social responsibility, but the law is only the floor above which one’s social and personal morality is tested. The statement that “there is no control-ling legal authority” may mean that the behavior is not illegal, but it does not mean that the behavior is morally correct or ethical. Ethical business conduct should normally exist at a level well above the minimum required by law or the “controlling legal authority.” In fact, laws are the markers of past behavior that society has deemed unethical or socially irresponsible. Perhaps the best guides to good business ethics are the examples set by ethical business leaders. However, three ethical principles also provide a framework to help the marketer distinguish between right and wrong, determine what ought to be done, and properly justify his or her actions. Simply stated, they are as follows: • Utilitarian ethics. Does the action optimize the “common good” or benefits of all constituencies? And who are the pertinent constituencies? • Rights of the parties. Does the action respect the rights of the individuals involved? • Justice or fairness. Does the action respect the canons of justice or fairness to all parties involved? Answers to these questions can help the marketer ascertain the degree to which decisions are beneficial or harmful and right or wrong and whether the consequences of actions are ethical or socially responsible. Perhaps the best framework to work within is defined by asking: Is it legal? Is it right? Can it withstand disclosure to stockholders, to company officials, to the public? Although the United States has clearly led the campaign against international bribery, European firms and institutions are apparently putting more effort and money into the pro-motion of what they are calling “corporate social responsibility.” For example, the watch-dog group CSR (Corporate Social Responsibility) Europe, in cooperation with INSEAD (the European Institute of Administrative Affairs) business school outside Paris, is study-ing the relationship between investment attractiveness and positive corporate behaviors on several dimensions. Their studies find a strong link between firms’ social responsibility and European institutional investors’ choices for equity investments.80 All this is not to say that European firms do not still have their own corporate misbehaviors. However, we expect more efforts in the future to focus on measuring and monitoring corporate social responsibility around the world. Initiatives. Social responsibility is climbing ever higher on many corporate agendas these days. But whereas in the past, companies may have given cash donations to nongovernmental organizations (NGOs), a new trend is now emerging. Known generally as strategic philanthropy, it usually involves companies applying their expertise or products to sponsorship projects, tar-geted at local communities or specific segments of the population. The return on this participation is not measured in terms of profit but by other indicators like an increase in brand equity81 and 79Shurti Gupta, Julie Pirsch, and Tulay Girard, “An Empirical Examination of a Multinational Ethical Dilemma: The Issue of Child Labor,” Journal of Global Marketing 23, no. 4 (2010), pp. 288–305. 80See http://www.csreurope.org. 81Karen L. Becker-Olsen, Charles R. Taylor, Ronald Paul Hill, and Goksel Yalcinkaya, “A Cross-Cultural Examination of Corporate Social Responsibility Marketing Communications in Mexico and the United States: Strategies for Global Brands,” Journal of International Marketing 19, no. 2 (2011), pp. 30 – 44.
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