Chapter 4

• Coca Cola generates more than half of its $42 billion in sales from international markets
• Coca Cola 's management makes efforts to reduce energy consumption
• in Uruguay, Coca Cola uses hybrid electric trucks to deliver products in congested areas to reduce pollution
• in North America, Coca Cola operates hundreds of hybrid delivery trucks
• Coca Cola switched to 100% renewable energy in numerous operating facilities
• Coca Cola avoids advertising aimed at children
• one Coca Cola plant in Belgium uses 100% geothermal energy
• Coca Cola developed a water sustainability program to deal with water sustainability challenges in India
• ethical behavior: doing the right things for the company, employees, community, government, and natural environment; requires companies to act in ways that stakeholders consider honest and fair
• ethical behavior four key components: ethics, corporate social responsibility, sustainability, corporate governance
• ethics: moral principles and values that govern the behavior of people, firms, and governments regarding right and wrong
• corporate social responsibility: operating a business in a manner that exceeds the ethical, legal, and commercial expectations of customers, employees, shareholders, and the communities where the firm does business
• sustainability: meeting humanity's needs without harming the ability of future generations to meet their needs
• corporate governance: system of procedures and processes by which corporations are managed, directed, and controlled; provides the means through which the organization's directors and managers undertake ethical behavior, corporate social responsibility, and sustainability (how to align mission and vision with day to day activities)
• corporate governance --- ethics, CSR, sustainability are mutually interdependent
• ethical behavior is good business
• employees overlook unethical behavior because of peer pressure
• coffee producers sometimes ignore the poor working conditions of supplier farmers in Africa, Latin America, and other areas
• ethical standards aren't uniform around the world
• ethical standards often vary by levels of economic development
• ethical standards change over time
• in China, MNEs operate factories that poollute local water supplies
• ethical dilemma: problem that involves two or more solutions, none of which resolves the situation in a morally satisfactory manner
• pyramid of ethical behavior: corporate social responsibility is at the top, and ethical responsibilities are above legal ones
• pyramid of ethical behavior bottom to top: economic responsibilities, legal responsibilities, ethical responsibilities, philanthropic responsibilities
• relativism: belief that ethical truths are not absolute, but differ from group to group
• normativism: the belief that ethical behavioral standards are universal and should be upheld consistently around the world
• the United Nations encourage companies to follow a normative approach in their international dealings
• in reality, most firms apply a combination of relativism and normativism abroad
• corruption: practice of obtaining power, personal gain, or influence through illegitimate means and at others' expense
• corruption is an extreme form of ethical behavior
• corruption includes bribery, embezzlement, fraud, extortion and blackmail, and money laundering
• in firms, corruption occurs across the range of value chain activities
• more than 30% of MNEs believe corruption is a major concern in their activities worldwide
• the cost of corruption amounts to over 5% of global GDP and increases global business costs by up to 10%
• bribery: person offers or gives another person a gift, cash, or favor to act dishonestly in exchange for personal gain
• embezzlement: theft or misuse of funds typically placed in one's care or belonging to one's employer
• fraud: wrongfully deceiving a person or other party to give up assets or cash
• extortion and blackmail: threats of harm against another party unless payment or demand is received; threats include physical harm, false imprisonment, exposure of secrets or past
• money laundering: concealment of origins of funds obtained through illegal means typically by transferring funds illicitly through banks or other legitimate businesses