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(Part 2) Terms of global business e



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Terms of global business engagement in ethically 
challenging environments: Applications to Burma 


PART 2

Moral Business Leadership 

The forces of global capitalism place unique demands on business
leadership. The intensity of economic
competition today adds to the risk that the rule of relativism and the
practice of unrestricted engagement
will become default positions for too much international business conduct.
This likelihood is accentuated
when corporate executives, by intention or driven by learned helplessness,
allow and expect
governments or activist groups to make ethical decisions for them. The
Burma case demonstrates limits
to the effectuality of external business regulation through government-led
sanctions and boycotts. and to
the narrow influence of activist lobbies and consumer boycotts. 

Rather than be the followers in ethical decision making, global business
executives should be the leaders.
Faced with a decision regarding Levi's involvement in Burma, Robert Haas
met his leadership
responsibility by declaring values and refusing to do business with a
government that didn't meet
standards. We need to examine how leadership roles shape the internal
regulation of international
business behavior. We need to identify the world's moral business leaders
(Gardner 1986). And, we
need to know why we don't have more of them. 

It isn't only the individual leader who deserves attention. Peer leadership
and peer group support in the
executive community are important too. American corporate executives, for
example, appear quite
willing to join in efforts to lobby the U.S. government for favorable
international trade practices and
policies. Why aren't they more willing to lobby one another about ethical
standards and actively work
together to maintain these standards in international business conduct
(Steidlmeir 1997)? The world
would benefit greatly if global business executives would form together in
vast peer networks committed
to ethical practices. 

(Table Omitted) 

Captioned as: Table 3 

In the absence of moral leadership in the executive communities, business
behavior in controversial
settings will be largely dealt with and debated case by case. Even as
questionable practices are
confronted and perhaps resolved for one firm or in one setting, others will
be engaged elsewhere. In the
absence of an eloquent spokesperson who captures media attention, as has
Burma's Daw Aung San
Suu Kyi, many controversial settings may well languish without substantial
public awareness and outside
scrutiny. Government-led sanctions tend to be country-specific; activist
pressures and lobbies tend to be
firm-specific; moral business leadership can travel the world. This great
promise calls out loudly for
attention. 

Model Building and Evaluative Research 

The four alternative terms of global business engagement described here
need to be further studied
conceptually and carefully described in practice. They should also be
evaluated and compared for their
likely economic and social consequences in culturally diverse settings (Sen
1997). Testable models
should be created to predict conditions under which each term of engagement
can deliver various
short-run and long-run outcomes. The models should be empirically examined
both within and across
settings. 

Specific to Burma, it may be desirable and timely to convene an independent
board of scholars to
evaluate international corporate practices. Contrasts are well in evidence.
Among them, the
Total/Unocal consortium is committed to staying while Texaco has decided to
disengage. PepsiCo and
Carlsberg have left, while Asia Pacific Breweries remains. Apple Computer
disengaged; Acer has not.
What we now need to know in these and other comparative cases is: With what
results? 

International scholars are well positioned to conduct evaluative research
in Burma and elsewhere, and to
do so through both within-industry and across--industry comparisons. So far
the opportunities to do so
seem to have been largely foregone. After China's Tiananmen Square debacle,
for example, Reebok
decided to stay while Timberland decided to leave (Makower 1994). Again,
the research question that
should have been asked and answered is: With what results? This evaluation
question should be
addressed over and over again for the alternative terms of engagement as
they are found anywhere in
the world. 

Realities of the Global Business Context 

Finally, the realities of multiple and varied contextual influences on the
activities of international
businesses must be admitted. There is a need to inquire further into the
commingling of government
policies and business agendas. Because business investment drives economic
development it becomes
an attractive and convenient lever of influence for governments engaged in
diplomatic tugs of war. This
power was demonstrated multilaterally in days of apartheid South Africa
when trade sanctions and
support for the Sullivan Principles hastened the advent of non-racial
democracy. But, unilateral attempts
by nations to use business restrictions as an instrument of foreign policy
show mixed results. One
estimate is that fewer than 20 percent have had even modest success (Crock
1997). More must be
known about how government agendas influence ethical behavior of
international businesses. 

The activities and accomplishments of various corporate social
responsibility forums should be more
widely publicized, analyzed, and encouraged. The United Nations, a logical
inter- governmental rallying
point for a universal code of global business ethics, has been unable to
establish a compelling role. It
struggled in trying to pass a "Code of Conduct on Transnational
Corporations" (United Nations 1990)
and still debates the Universal Declaration of Human Rights. More attention
should be given to
alternative forums, particularly those where business.leaders meet as peers
to discuss global values and
social responsibility practices. In the Caux Round Tables, executives from
Europe, Japan, and the
United States have developed "Principles for Business" that bridge all
three regional vantage points
(Makower 1994; Kaku 1997). Third-party organizations are also active in
some sectors. An example is
the Council on Economic Priorities' effort, Social Accountability 8000.
This program would certify that
employers do not use child or forced labor, do provide a safe working
environment, do respect worker
rights to unionize, do limit the required work week to a maximum of 48
hours, and do pay wages that
meet basic needs (Bernstein 1997). 

We need to know more about how consumer voices and activist lobbies
influence business behavior.
PepsiCo felt this power as the actual/potential cost of lost revenues from
consumer boycotts in protest
of its involvement in Burma (Billenness 1997). An organization called
"Rugmark" is trying to discourage
consumer purchases of carpets that do not carry its label, earned by a
certification process to guarantee
that a rug is not made with child labor (The New York Times 1997). The
activist voices for international
business ethics include labor organizations. The International
Confederation of Free Trade Unions
successfully lobbied the International Football Federation to establish a
"code of practice" ensuring that
suppliers of footballs with its logo do not use child labor (Islam 1996).
The American Federation of
Labor -Congress of Industrial Organizations is also on record as an
advocate of trade sanctions with
countries allowing unfair labor practices (AFL-CIO 1996). Activism also
emerges in the form of
worldwide interfaith collaboration (Schilling and Rosenbaum 1995). Armed
with some $ 45 billion in
collective investments, for example, the Interfaith Center on Corporate
Responsibility pursues activist
shareholder resolutions, lobbies corporate managers and legislators, and
leads consumer boycotts in
attempting to change unjust practices (Van Buren 1994). Some institutional
investors like the Franklin
Research and Development Corporation also pursue active social
responsibility missions (Billenness
1993). 

Research on international business ethics must now take into account the
expanding membership base of
multinational corporations. The competitive environment of international
business is increasingly
complicated by the sheer number and diversity of players. The traditional
notion that multinational
corporations from the industrialized countries are the only ones of real
significance in the global economy
is out of date. Significant global corporations are emerging in the newly
industrialized and industrializing
countries (O'Rourke 1993) and they pursue a broad mix of business
strategies (Williamson 1997). As
MNCs from increasingly disparate national homes and with different
strategies compete for world
markets, the implications for international business ethics must be
considered. At least one activist is
concerned, saying: "It is clear that these new NIC multinationals will be
much more difficult to monitor
and pressure for changes. Subcontracting firms' anonymity and insulation
from the marketplace makes
them much harder to influence. These corporations have also shown almost no
willingness to
acknowledge the legitimacy of environmental and social concerns, as even
the large multinationals
purport to do" (O'Rourke 1993: 21). 

Conclusion 

The ethics of business operations cannot hide in foreign environments any
more than they can hide at
home. Tolerance is increasingly scarce for those who use ethical relativism
to justify questionable
behavior in any cultural milieu. But diversity in our global economy is
also rendering the rule of
absolutism simplistic and unrealistic as a guide to business behavior.
Ultimate responsibility for ethical
conduct in global business affairs rests with corporate leadership. The
case of Burma reminds us that
governments and international bodies have difficulty making rules for
everyone to follow. It reminds us
that the impact of activist lobbies varies from one corporation and
situation to the next. Importantly, it
reminds us that, in the meantime, a lot of business-as-usual is taking place. 

There is much work yet to be done before acceptable terms of global
business engagement in ethically
challenging settings can be agreed upon. While the search progresses,
executives would do well to
reconsider the broad imperatives of moral business leadership. They might
start from the perspective of
a basic rule of public responsibility identified years ago by Peter
Drucker-Primum non nocer, "not
knowingly do harm" (1973: 369, 375). Although modest in concept, the rule
offers the great opportunity
of self-constraint. 

Even as business firms compete worldwide for customers and markets, even as
they face a complicated
and dynamic global environment, and even as they deal with multiple
stakeholders and complex social
values, they must still find common ethical ground. Business behavior
anywhere that fails the test of
primum non nocer must be relegated to the past, to the days of colonialism,
to the days of George
Orwell's fiction. 

My dear doctor, how can you make out that we are in this country for any
purpose except to steal? It's
so simple. The official holds the Burman down while the business man goes
through his pockets. 

-John Flory, in George Orwell's Burmese Days (1934: 40) 

Footnote: 

Note 

Footnote: 

The author would like to thank Lisa Brooten and Ute Rother of Ohio
University for their invaluable
research assistance in the preparation of this article. 

Reference: 

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