Philosophy 223International Business Ethics:

Relativism, Universalism and Rights

Sweatshops or Developing Capitalism?

In an increasingly global economic system, it is inevitable that engineering managers are going to be confronted by moral dilemmas produced by differing political, cultural and economic contexts.

Two Types of Dilemmas

One problem typically faced by managers in an international context arises from differences in regulatory, cultural or economic standards.

Another common problem arises through technology transfers to Lesser Industrialized Countries (LICs).

Different Standards?

The first type of dilemma is exemplified by the sweatshop.

The sort of labor practices common in many developing countries (long hours, young workers, unsafe conditions, low pay) have been common to all developed economies at some point in their history.

What is the responsibility of managers from developed economies when confronted with these conditions in their host countries?

Risky Technologies?

The second type of dilemma is most infamously exemplified by the catastrophic release of 27 tons of methyl isocyanate gas from the Union Carbide plant in Bhopal, India.

The plant never operated at full capacity and was staffed and maintained by workers with little understanding of the chemicals they were handling and no appreciation for the importance of the limited safety measures that were in place.

What is the responsibility of managers from countries with higher levels of technological development when transferring these technologies to countries with lower levels?

False Solutions

Two responses to these dilemmas that fall short:One is to always

assume the superiority of your own context.

The other is to always conform to the ethos of the host country “When in Rome”

Bowie, “Relativism and the Moral Obligations of Multinational Corporations”

Bowie distinguishes between descriptive and normative ethical relativism and criticizes both sets of views.

He goes on to defend a basic morality necessary for market transactions.

Cultural Relativism

Cultural relativism is the descriptive claim that ethical practices differ among cultures.

ProblemsDifferent practices do not necessarily imply

different underlying moral principles.There are universal principles accepted by

all cultures, such as prohibitions against torture and genocide.

There are international treaties and conventions that codify basic moral norms.

Ethical Relativism

Ethical relativism is the normative claim that what is really right or wrong is what a culture says is right or wrong.

ProblemsThe mere fact that a culture believes a

practice is correct does not make it correct.It is inconsistent with the concept of a moral

reformer, someone who argues against the views of the majority based on ethical principles.

The strongest argument against ethical relativism would be to defend universal moral norms (see next essay by Arnold).

Some Other Considerations

There is no clearly agreed upon understanding of “cultural.”

There seem to be basic moral norms that every society must adapt, such as don’t kill or steal.

There is an implicit morality of the marketplace that is often ignored.There are Kantian foundations for moral

prohibitions against lying and cheating. Multinationals are obligated to follow these

minimum ethical norms.

Arnold, “The Human Rights Obligations of Multinational Corporations”

Arnold defends a Kantian view of human rights obligations of corporations and defends that view against criticism. He also criticizes one recent effort by the United Nations to identify the human rights obligations of corporations.

Human rights are different from legal rights in that they do not depend upon state sanction for their legitimacy.

The United Nations and Human Rights

The Universal Declaration of Human Rights (1948) is aimed at states, not corporations.

Draft Norms on the Responsibilities of Corporations and Other Business Enterprises with Respect to Human Rights (2003) is aimed at corporations.

Problems: They are too wide and imprecise; They fail to distinguish between basic obligations and

those actions that are good to perform but not mandatory.

Basic Obligations = Basic Rights

Basic rights: “moral rights that apply to all persons in all nations, regardless of whether the nation in which a person resides acknowledges and protects those rights” (585c1-2).Are inalienable.Are attributable to persons (not only biological

humans).

A Kantian basis for rights: Always treat others as an end, and never as a means only.

Entails negative duties such as avoiding physical force or coercion.

Entails positive obligations like ensuring positive well-being.

Which Rights are Basic?

Freedom: Individuals should be free to as much freedom as is compatible with a like freedom for all.

The right to physical security and freedom of movement.

The right to non-discrimination on the basis of arbitrary characteristics such as race, sex, religion, ethnicity, and sexual orientation.

The right to freedom of association and collective bargaining.

The right to fair treatment.

The right to subsistence

The right to develop basic human capabilities.

Western Imperialism?

Human rights are not merely a Western concept.There are diverse Asian societies, like

India, which embrace human rights language and arguments.

Even if all Asian nations denied the validity of human rights arguments, this would not entail that they were correct.

Werhane, “Exporting Mental Models: Global Capitalism in the 21st Century”

Werhane argues for caution in extending Western style capitalism abroad. She provides several examples whereby the unreflective extension of Western style capitalism led to bad outcomes.

Mental models are mental representations, cognitive frames, or mental pictures that frame and organize human experience.

Framing Private Property

The mental model of private property, minimal regulations, and free trade is being exported by the U.S. as if it will always be of benefit. But this is not so.

Example of Luzon rice farmers.Example of Mexican farmersExample of W.R. Grace’s development of

NeemixExample of Solar Electric Light Fund in

China and South Africa

The Lesson?

The lesson here is that American mental models of property and free enterprise cannot be uniformly and unreflectively exported without producing negative consequences.

Everyone can agree that abolishing poverty is a good thing, but we need to be cautious regarding our assumptions about how to do so.

We need to keep in mind that what matters most to many people are social relationships, family, religious and community traditions, and local values regarding social goods.

Economic development schemes that fail to recognize this will often fail.

It is in the best interest of corporations to tread lightly, as developing countries represent 80% of the world’s population.

A Good Example

Unilever is an example of a company that has adapted its mental models to meet the diverse needs of communities throughout the developing world.

“Triple Bottom Line:” expands the definition of success to include measurement of “economic, ecological, and community assets, liabilities, profits and losses” (595c2).