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Ethics and Ethical Dilemmas Across the Globe

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• Binod Sundararajan 4 ,
• Oksana Shkurska 4 &
• Shannon Lin 4  

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Multinational companies (MNCs) are often under fire for following unethical principles in business. It affects their relationships with stakeholders, including investors and consumers, and significantly damages their reputation.

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Sundararajan, B., Shkurska, O., Lin, S. (2023). Ethics and Ethical Dilemmas Across the Globe. In: Cross-Cultural Practices in Business and Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-06440-1_4

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IKEA Case: One Company’s Fight to End Child Labor

A business ethics case study.

In this business ethics case study, Swedish multinational company IKEA faced accusations relating to child labor abuses in the rug industry in Pakistan which posed a serious challenge for the company and its supply chain management goals.

Empty garage with a highlighted walking path in front of an IKEA.

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Yuvraj Rao '23 , a 2022-23 Hackworth Fellow at the Markkula Center for Applied Ethics graduated with a marketing major and entrepreneurship minor from Santa Clara University.

Introduction

IKEA is a Swedish multinational company that was founded in 1943 by Ingvar Kamprad. [1] The company mainly provides simple, affordable home furniture and furnishings, and it pioneered DIY, or do it yourself, furniture. Kamprad originally sold binders, fountain pens, and cigarette lighters, but eventually expanded to furniture in 1948. According to the Journal of International Management, in 1953, Kamprad offered products that came as “a self assembled furniture” for the lowest price, which ultimately became a key part of IKEA’s value proposition going forward. In 1961, IKEA started to contact furniture factories in Poland to order chairs from a factory in Radomsko. [2] Outsourcing to Poland was mainly due to other Swedish furniture stores pressuring Swedish manufacturers to stop selling to IKEA. In the mid 1960’s, IKEA continued its supplier expansion into Norway, largely because IKEA didn’t want to “own their own line of production,” [3] and Germany due to its ideal location (downtown, suburban area) to place an IKEA store. Given IKEA’s suppliers were now not just in Sweden, it led to an increased importance on developing strong relationships with its suppliers.

In the following decades, IKEA continued its expansion and solidified its identity as a major retail outlet with parts being manufactured around the world. By the mid 90’s, IKEA was the “world’s largest specialized furniture retailer with their GDP reaching $4.5 billion in August of 1994.” [4] It also worked with 2,300 suppliers in 70 different countries, who supplied 11,200 products and had 24 “trading offices in nineteen countries that monitored production, tested product ideas, negotiated products, and checked quality.” [5] IKEA’s dependence on its suppliers ultimately led to problems in the mid 1990’s. At this time, IKEA was the largest furniture retailer in the world, and had nearly “100 stores in 17 countries.” [6] Also during this time, a Swedish documentary was released that highlighted the use of child labor in the rug industry in Pakistan, which impacted IKEA given it had production there. The rug industry in particular is extremely labor intensive and is one of the largest “export earners for India, Pakistan, Nepal and Morocco.” Here, children are forced to work long hours for very little pay (if there is any pay at all). In some cases, their wages are only enough to pay for food and lodging. In cases where children are not paid, the wages are used by the loom owner to pay the parents and agents who brought the children to the factories. Additionally, the work the children must do comes with a lot of risk. More specifically, children face risks of diminishing eyesight and damaged lungs from “the dust and fluff from the wool used in the carpets.” [7] As a result of these working conditions, many of these children are very sick when they grow up. Despite these terrible conditions, it isn’t that simple for families not to send children to work at these factories. A lot of the parents can’t afford food, water, education, or healthcare, so they are often left with no choice but to send their children to work for an additional source of income. [8]

 IKEA and Child Labor Accusations

The accusations of child labor in the rug industry in Pakistan posed a serious challenge for IKEA and its supply chain management goals. It would need to address the serious issues of alleged injustice for the sake of its reputation and brand image. Additionally, as IKEA also had suppliers in India, it would need to be in compliance with India’s “landmark legislation act against child labor, the Child Labor (Prohibition and Regulation) Act of 1986.” [9]

As a result of these accusations, IKEA ultimately ended its contracts with Pakistani rug manufacturers, but the problem of child labor in its supply chain still persisted in other countries that were supplying IKEA. Marianne Barner, the business area manager for rugs for IKEA at the time, stated that the film was a “real eye-opener…I myself had spent a couple of months in India for some supply chain training, but child labor was never mentioned.” [10] She also added that a key issue was that IKEA’s “buyers met suppliers at offices in the cities and rarely visited the actual production sites.” [11] The lack of visits to the actual production sites made it difficult for IKEA to identify the issue of child labor in these countries.

To make matters worse, in 1995, a German film “showed pictures of children working at an Indian rug supplier... ‘There was no doubt that they were rugs for IKEA,’ says business area manager for textiles at the time, Göran Ydstrand.” [12] In response to these accusations, Barner and her team went to talk to suppliers in Nepal, Bangladesh, and India. They also conducted surprise raids on rug factories and confirmed that there was child labor in these factories. The issue of child labor, along with the accusations of having formaldehyde (a harmful chemical) in IKEA’s best selling BILLY bookcases and the discovery of unsafe working conditions for adults (such as dipping hands in petrol without gloves), led to increased costs and a significantly damaged reputation for the company.

It was later discovered that the German film released in 1995 was fake, and the renowned German journalist who was responsible for this film was involved in “several fake reports about different subjects and companies.” [13] IKEA was now left with three options. First, some members of IKEA management wanted to permanently shut down production of their rugs in South Asia. Another option was to do nothing and proceed with its existing practices now that it was announced that the film was fake. The third option was that the company could attempt to tackle the issue of child labor that was clearly evident in its supply chain, regardless of whether the film was fake or not. IKEA ultimately decided to opt for the third option, and its recent discoveries would eventually help guide the policies the company implemented to address these issues, particularly child labor in India.

Steps Taken to Address Child Labor in the Supply Chain

IKEA took multiple steps to deal with its damaged reputation and issues of child labor in its supply chain. One way in which it did this was through institutional partnerships. One such partnership was with Save the Children, which began in 1994. According to Save the Children’s website, one of the main goals of their partnership is to realize children's “rights to a healthy and secure childhood, which includes a quality education. By listening to and learning from children, we develop long-term projects that empower communities to create a better everyday life for children.” [14] Furthermore, the partnership is intended to “drive sustainable business operations across the entire value chain.” [15] Together, IKEA and Save the Children are focused on addressing the main causes of child labor in India’s cotton-growing areas. [16] Save the Children also advised IKEA to bring in an independent consultant to ensure that suppliers were in compliance with their agreements, which further improved IKEA’s practices in its supply chain. IKEA also partnered with UNICEF to combat child labor in its supply chain. According to the IKEA Foundation, in 2014, IKEA provided UNICEF with six new grants totaling €24.9 million with a focus “on reaching the most marginalized and disadvantaged children living in poor communities and in strengthening UNICEF’s response in emergency and conflict situations.” Additionally, five of the six grants were given to help programs in “Afghanistan, China, India, Pakistan, and Rwanda,” with a “focus on early childhood development, child protection, education, and helping adolescents to improve their lives and strengthen their communities.” [17]

Next, IKEA and Save the Children worked together to develop IWAY, which was launched in 2000. [18] IWAY is the IKEA code of conduct for suppliers. According to the IKEA website, “IWAY is the IKEA way of responsibly sourcing products, services, materials and components. It sets clear expectations and ways of working for environmental, social and working conditions, as well as animal welfare, and is mandatory for all suppliers and service providers that work with IKEA.” [19] In addition, IWAY is meant to have an impact in the following four areas: “promoting positive impacts on the environment,” “securing decent and meaningful work for workers,” “respecting children’s rights”, and “improving the welfare of animals in the IKEA value chain.” [20] IWAY is used as a foundation to collaborate with IKEA’s suppliers and sub-contractors to ensure supply chain transparency.

As mentioned previously, one of the main goals of IKEA’s partnership with Save the Children was to address child labor in India’s cotton-growing areas. To do this, IKEA and Save the Children developed a program that would ultimately help more than 1,800 villages between 2009 and 2014. More specifically, the program moved nearly 150,000 children out of child labor and into classrooms. Also, as a result of this program, more than 10,000 migrant children “moved back into their home communities.” [21] Last but not least, the program trained almost 2,000 teachers and 1,866 Anganwadi workers (whose duties include teaching students and educating villagers on healthcare [22] ) in order to provide each village with a community leader. This was to ensure that the community had a skilled leader to assist in educating the villagers. In 2012, the IKEA Foundation and Save the Children announced that they would expand with new programs in Punjab, Haryana, and Rajasthan. This joint program illustrates IKEA’s commitment to improving communities in addition to helping children go to school.

Conclusion & Looking Ahead

IKEA has taken numerous steps to ensure that suppliers abide by the IWAY Code of Conduct. Companies around the world can learn from the policies IKEA has put in place to ensure that each company has control and complete oversight over their supply chains, which can lead to a more transparent and ethical supply chain. According to The IKEA WAY on Purchasing Products, Materials and Services, one way in which IKEA does this is by requiring all suppliers to share the content of the code to all co-workers and sub-suppliers, thus leading to more accountability among the company's suppliers. IKEA also believes in the importance of long term relationships with its suppliers. Therefore, if for some reason, a supplier is not meeting the standards set forth by the code, IKEA will continue to work with the supplier if the supplier shows a willingness to improve its practices with actionable steps to complete before a specified period of time. [23]

Additionally, during the IWAY implementation process, IKEA monitors its suppliers and service providers. To do this, IKEA has a team of auditors who conduct audits (both announced and unannounced) at supplier facilities. The auditors are also in charge of following up on action plans if suppliers are failing to meet the agreed upon standards specified by IWAY. Along with this, “IKEA…has the Compliance and Monitoring Group, an internal independent group that is responsible for independent verification of implementation and compliance activities related to IWAY and Sustainability.” [24] IKEA also has independent third party teams who conduct inspections on behalf of IKEA. [25] By conducting audits and putting together teams to ensure cooperation from suppliers throughout the supply chain, companies can be better equipped to prevent unethical practices in the production of goods and services. In Ximeng Han’s Analysis and Reflection of IKEA’s Supply Chain Management, Han highlights IWAY’s importance in maintaining links with IKEA’s suppliers. [26] Therefore, IWAY plays a crucial role in ensuring supply chain transparency and in building a more ethical and sustainable supply chain.

In addition to all of the policies IKEA has put in place to address issues in its supply chain, the company has also donated a lot of money to combat child labor in India. More specifically, according to an IKEA Foundation article written in 2013, “Since 2000, the IKEA Foundation has committed €60 million to help fight child labour in India and Pakistan, aiming to prevent children from working in the cotton, metalware and carpet industries.” [27] Furthermore, in 2009, the company announced that it would donate $48 million to UNICEF to “help poor children in India.” [28]

IKEA’s goal to completely eliminate child labor from its supply chain is an ongoing battle, and it is still committed to ensuring that this is ultimately the case. More specifically, it is extremely difficult to completely eliminate child labor from a company’s supply chain because of the various aspects involved. According to a report published in 2018 by the International Labour Organization, these aspects include a legal commitment, building and “extending” social protection systems (including helping people find jobs), “expanding access to free, quality public education,” addressing supply chain issues, and providing more protection for children in general. [29] Furthermore, Han points out the potential downsides that could arise as a result of having a global supply chain like IKEA does. Given IKEA is an international retailer, the company “has to spend a lot of time, money and manpower to enter new markets due to the different cultures, laws and competitive markets in different regions, and there is also a significant risk of zero return.” [30] Han also argues that the COVID-19 pandemic showed IKEA’s and many other companies’ inability to respond to “fluctuations in supply and demand,” primarily due to inflexible supply chains. [31] This information points out the various aspects that need to align in order to completely end the issue of child labor throughout the world, as well as the difficulties of having a global supply chain, which is why child labor is so difficult to completely eliminate.

Specific to IKEA’s actions, in 2021, IKEA announced three key focus areas for its action pledge: “Further integrating children’s rights into the existing IKEA due diligence system (by reviewing IWAY from a child rights’ perspective in order to strengthen the code),” “accelerating the work to promote decent work for young workers,” and partnering “up to increase and scale efforts.” [32] IKEA’s fight to end child labor in India highlights the importance of supply chain transparency and putting policies in place that ensures cooperation from suppliers and all parties involved. Additionally, in a Forbes article written in 2021, “According to the data from the OpenText survey…When asked whether purchasing ethically sourced and/or produced products matters, 81 percent of respondents said yes.” [33] Steve Banker, who covers logistics and supply chain management, also adds, “What is interesting is that nearly 20 percent of these survey respondents said that it has only mattered to them within the last year, which indicates that the Covid pandemic, and some of the product shortages we have faced, has made consumers re-evaluate their stance on ethical sourcing.” [34] These results confirm that customers are now considering how a product was sourced in their purchasing decisions, which makes it even more important for IKEA to be transparent about its efforts to eliminate child labor from its supply chain. Furthermore, the company’s open commitment to eliminating child labor and helping communities in India is beneficial in maintaining a positive relationship with its stakeholders.

The increase in globalization has made it even more essential for companies to monitor their supply chains and have complete oversight over business practices. IKEA is one of the companies leading the way in building a more ethical and sustainable supply chain, but more companies need to follow suit and implement policies similar to IWAY that holds all parties in the supply chain accountable for their actions. Through supply chain transparency and accountability, companies will likely be better equipped to handle issues that arise throughout their respective supply chains. Furthermore, by implementing new policies, conducting audits, and maintaining close communication with suppliers, companies can work to eliminate child labor in their supply chains and put children where they belong: in school.

Reflection Questions:

• What does this case teach you about supply chain ethics?
• What are some of the ways in which management/leaders can ensure compliance of the standards set forth by a company in terms of supplier behavior and ethical sourcing?
• Who is primarily responsible for ensuring ethical behavior throughout the supply chain? Is it the company? The suppliers? Both?
• How can companies utilize the various platforms and technologies that exist today to better understand and oversee their supply chains? 
• IKEA has taken numerous steps to address child labor in its supply chain. Do you think every business working in a context that may involve child labor has a duty to act in a similar way? Why or why not?

Works Cited 

“ About Ikea – Our Heritage .” IKEA.

“Anganwadi Workers.” Journals Of India , 16 June 2020. 

Banker, Steve. “ Do Consumers Care about Ethical Sourcing? ” Forbes , 9 Nov. 2022.

Bharadwaj , Prashant, et al. Perverse Consequences of Well-Intentioned Regulation ... - World Bank Group .

“ Child Labor in the Carpet Industry Rugmark: Carpets: Rugs: Pakistan .” Child Labor in the Carpet Industry RugMark |Carpets | Rugs | Pakistan .

“ Creating a Sustainable IKEA Value Chain with Iway. ” Sustainability Is Key in Our Supplier Code of Conduct .

“ Ending Child Labour by 2025 - International Labour Organization .” International Labour Organization .

“ Film on Child Labour Is Eye-Opener for IKEA .” IKEA Museum , 31 Mar. 2022.

Foundation , ECLT. “ Why Does Child Labour Happen? Here Are Some of the Root Causes. ” ECLT Foundation , 17 May 2023.

Han, Ximeng. “ Analysis and Reflection of IKEA’s Supply Chain Management. ” Analysis and Reflection of IKEA’s Supply Chain Management | Atlantis Press , 27 Dec. 2022.

“ Human Rights and Global Sourcing: IKEA in India. ” Journal of International Management , 13 May 2011.

“ IKEA and IKEA Foundation .” Save the Children International .

“ IKEA Foundation Contributes €24.9 Million to UNICEF to Help Advance Children’s Rights. ” IKEA Foundation , 26 May 2020.

“ IKEA Foundation Helps Fight the Roots Causes of Child Labour in Pakistan .” IKEA Foundation , 18 Feb. 2013.

“ Ikea Gives $48 Million to Fight India Child Labor .” NBC News , 23 Feb. 2009.

“ IKEA Supports 2021 as the UN International Year for the Elimination of Child Labour. ” About IKEA.

The Ikea Way on Purchasing Products , Materials and Services .

Jasińska, Joanna, et al. “ Flat-Pack Success: IKEA Turns to Poland for Its Furniture. ” – The First News .

Thomas , Susan. “ IKEA Foundation Tackles Child Labor in India’s Cotton Communities .” Boston College Center for Corporate Citizenship , 15 July 2014.

[1] “About Ikea – Our Heritage.” IKEA .

[2] Jasińska, Joanna, et al. “Flat-Pack Success: IKEA Turns to Poland for Its Furniture.” – The First News .

[3] “Human Rights and Global Sourcing: IKEA in India.” Journal of International Management , 13 May 2011.

[4] “Human Rights and Global Sourcing: IKEA in India.” Journal of International Management , 13 May 2011.

[5] “Human Rights and Global Sourcing: IKEA in India.” Journal of International Management , 13 May 2011.

[6] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[7] “Child Labor in the Carpet Industry Rugmark: Carpets: Rugs: Pakistan.” Child Labor in the Carpet Industry RugMark |Carpets | Rugs | Pakistan .

[8] Foundation , ECLT. “Why Does Child Labour Happen? Here Are Some of the Root Causes.” ECLT Foundation , 17 May 2023.

[9] Bharadwaj , Prashant, et al. Perverse Consequences of Well-Intentioned Regulation ... - World Bank Group .

[10] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[11] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[12] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[13] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[14] “IKEA and IKEA Foundation.” Save the Children International .

[15] “IKEA and IKEA Foundation.” Save the Children International .

[16] “IKEA and IKEA Foundation.” Save the Children International .

[17] “IKEA Foundation Contributes €24.9 Million to UNICEF to Help Advance Children’s Rights.” IKEA Foundation , 26 May 2020.

[18] “IKEA and IKEA Foundation.” Save the Children International .

[19] “Creating a Sustainable IKEA Value Chain with Iway.” Sustainability Is Key in Our Supplier Code of Conduct .

[20] “Creating a Sustainable IKEA Value Chain with Iway.” Sustainability Is Key in Our Supplier Code of Conduct .

[21] Thomas, Susan. “IKEA Foundation Tackles Child Labor in India’s Cotton Communities.” Boston College Center for Corporate Citizenship , 15 July 2014.

[22] “Anganwadi Workers.” Journals Of India , 16 June 2020.

[23] The Ikea Way on Purchasing Products, Materials and Services .

[24] The Ikea Way on Purchasing Products, Materials and Services .

[25] The Ikea Way on Purchasing Products, Materials and Services .

[26] Han, Ximeng. “Analysis and Reflection of IKEA’s Supply Chain Management.” Analysis and Reflection of IKEA’s Supply Chain Management | Atlantis Press , 27 Dec. 2022.

[27] “IKEA Foundation Helps Fight the Roots Causes of Child Labour in Pakistan.” IKEA Foundation , 18 Feb. 2013.

[28] “Ikea Gives $48 Million to Fight India Child Labor.” NBC News , 23 Feb. 2009.

[29] “Ending Child Labour by 2025 - International Labour Organization.” International Labour Organization .

[30] Han, Ximeng. “Analysis and Reflection of IKEA’s Supply Chain Management.” Analysis and Reflection of IKEA’s Supply Chain Management | Atlantis Press , 27 Dec. 2022.

[31] Han, Ximeng. “Analysis and Reflection of IKEA’s Supply Chain Management.” Analysis and Reflection of IKEA’s Supply Chain Management | Atlantis Press , 27 Dec. 2022.

[32] “IKEA Supports 2021 as the UN International Year for the Elimination of Child Labour.” About IKEA .

[33] Banker, Steve. “Do Consumers Care about Ethical Sourcing?” Forbes , 9 Nov. 2022.

[34] Banker, Steve. “Do Consumers Care about Ethical Sourcing?” Forbes , 9 Nov. 2022.

• Corpus ID: 261436196

Ethical Issues In International Business: A Comparative Study Of Different Companies

• Sodha Bhargav
• Published 2023
• Business, Philosophy

8 References

Ethical challenges in international business operations, the importance of ethics and social responsibility in international business, environmental stewardship, the importance of an international hospitality business code of ethics, social responsibility and ethical issues in managing global business, related papers.

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Candidates might fixate on red, blue, or swing states, but the neighborhoods where voters spend their teen years play a key role in shaping their political outlook, says research by Vincent Pons. What do the findings mean for the upcoming US elections?

• 21 Nov 2023

The Beauty Industry: Products for a Healthy Glow or a Compact for Harm?

Many cosmetics and skincare companies present an image of social consciousness and transformative potential, while profiting from insecurity and excluding broad swaths of people. Geoffrey Jones examines the unsightly reality of the beauty industry.

• 09 Nov 2023

What Will It Take to Confront the Invisible Mental Health Crisis in Business?

The pressure to do more, to be more, is fueling its own silent epidemic. Lauren Cohen discusses the common misperceptions that get in the way of supporting employees' well-being, drawing on case studies about people who have been deeply affected by mental illness.

• 07 Nov 2023

How Should Meta Be Governed for the Good of Society?

Julie Owono is executive director of Internet Sans Frontières and a member of the Oversight Board, an outside entity with the authority to make binding decisions on tricky moderation questions for Meta’s companies, including Facebook and Instagram. Harvard Business School visiting professor Jesse Shapiro and Owono break down how the Board governs Meta’s social and political power to ensure that it’s used responsibly, and discuss the Board’s impact, as an alternative to government regulation, in the case, “Independent Governance of Meta’s Social Spaces: The Oversight Board.”

• 24 Oct 2023

From P.T. Barnum to Mary Kay: Lessons From 5 Leaders Who Changed the World

What do Steve Jobs and Sarah Breedlove have in common? Through a series of case studies, Robert Simons explores the unique qualities of visionary leaders and what today's managers can learn from their journeys.

• 03 Oct 2023
• Research Event

Build the Life You Want: Arthur Brooks and Oprah Winfrey Share Happiness Tips

"Happiness is not a destination. It's a direction." In this video, Arthur C. Brooks and Oprah Winfrey reflect on mistakes, emotions, and contentment, sharing lessons from their new book.

• 12 Sep 2023

Successful, But Still Feel Empty? A Happiness Scholar and Oprah Have Advice for You

So many executives spend decades reaching the pinnacles of their careers only to find themselves unfulfilled at the top. In the book Build the Life You Want, Arthur Brooks and Oprah Winfrey offer high achievers a guide to becoming better leaders—of their lives.

• 10 Jul 2023
• In Practice

The Harvard Business School Faculty Summer Reader 2023

Need a book recommendation for your summer vacation? HBS faculty members share their reading lists, which include titles that explore spirituality, design, suspense, and more.

• 01 Jun 2023

A Nike Executive Hid His Criminal Past to Turn His Life Around. What If He Didn't Have To?

Larry Miller committed murder as a teenager, but earned a college degree while serving time and set out to start a new life. Still, he had to conceal his record to get a job that would ultimately take him to the heights of sports marketing. A case study by Francesca Gino, Hise Gibson, and Frances Frei shows the barriers that formerly incarcerated Black men are up against and the potential talent they could bring to business.

• 04 Apr 2023

Two Centuries of Business Leaders Who Took a Stand on Social Issues

Executives going back to George Cadbury and J. N. Tata have been trying to improve life for their workers and communities, according to the book Deeply Responsible Business: A Global History of Values-Driven Leadership by Geoffrey Jones. He highlights three practices that deeply responsible companies share.

• 14 Mar 2023

Can AI and Machine Learning Help Park Rangers Prevent Poaching?

Globally there are too few park rangers to prevent the illegal trade of wildlife across borders, or poaching. In response, Spatial Monitoring and Reporting Tool (SMART) was created by a coalition of conservation organizations to take historical data and create geospatial mapping tools that enable more efficient deployment of rangers. SMART had demonstrated significant improvements in patrol coverage, with some observed reductions in poaching. Then a new predictive analytic tool, the Protection Assistant for Wildlife Security (PAWS), was created to use artificial intelligence (AI) and machine learning (ML) to try to predict where poachers would be likely to strike. Jonathan Palmer, Executive Director of Conservation Technology for the Wildlife Conservation Society, already had a good data analytics tool to help park rangers manage their patrols. Would adding an AI- and ML-based tool improve outcomes or introduce new problems? Harvard Business School senior lecturer Brian Trelstad discusses the importance of focusing on the use case when determining the value of adding a complex technology solution in his case, “SMART: AI and Machine Learning for Wildlife Conservation.”

• 14 Feb 2023

Does It Pay to Be a Whistleblower?

In 2013, soon after the US Securities and Exchange Commission (SEC) had started a massive whistleblowing program with the potential for large monetary rewards, two employees of a US bank’s asset management business debated whether to blow the whistle on their employer after completing an internal review that revealed undisclosed conflicts of interest. The bank’s asset management business disproportionately invested clients’ money in its own mutual funds over funds managed by other banks, letting it collect additional fees—and the bank had not disclosed this conflict of interest to clients. Both employees agreed that failing to disclose the conflict was a problem, but beyond that, they saw the situation very differently. One employee, Neel, perceived the internal review as a good-faith effort by senior management to identify and address the problem. The other, Akash, thought that the entire business model was problematic, even with a disclosure, and believed that the bank may have even broken the law. Should they escalate the issue internally or report their findings to the US Securities and Exchange Commission? Harvard Business School associate professor Jonas Heese discusses the potential risks and rewards of whistleblowing in his case, “Conflicts of Interest at Uptown Bank.”

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Ethics for International Business

DOI link for Ethics for International Business

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Business takes place in an increasingly global environment, crossing political and cultural boundaries that challenge corporate values. The central focus of this successful and innovative text lies in how to make and explain 'best choice' judgments when confronting ethical dilemmas in international business situations. The newly-updated version of this groundbreaking textbook continues to provide a topical and relevant analysis of the ethical dimensions of conducting business in a global political economy. From a starting point of applied ethics, the book introduces a common set of normative terms and analytical tools for examining and discussing real case scenarios. Extensive real-world examples, presented in the form of exhibits, cover issues including:

• foreign production, including sweatshops
• export of hazardous products
• testing and pricing of HIV-AIDS drugs
• advertising tobacco, alcoholic beverages and infant formula
• deceptive marketing techniques and bribery
• religious and social discrimination
• cultural impacts from 'music, movies and malls'
• environmental issues, including oil spills, rain forest preservation, global warming and genetically modified foods
• fair trade certification and consumer boycotts
• oil investments in the Sudan, Burma and Nigeria.

To keep pace with the changing landscape of global business, this new edition features:

• updated exhibits that introduce new issues, including internet censorship and privacy, marketing and obesity, dumping electronic waste in Ghana, the costs of bottled water, and Wal-Mart’s supplier code in China
• increased coverage of issues arising in emerging markets
• updated descriptions and assessments of relevant international agreements
• seventeen new photographs that were chosen to accompany cases designed for classroom discussion
• "framing questions" to guide discussion of issues in topical chapters
• three additional figures that help depict the ethical analysis process.

The continued globalization of business increases the relevance of this textbook and its unique focus on specifically international ethical challenges faced by business, where governments and civil society groups play an active role. While most business ethics texts continue to focus heavily on ethical theory, this textbook condenses ethical theory into applied decision-making concepts, emphasizing practical applications to real world dilemmas. Anyone with an interest in the ethical implications of international business, or the business implications of corporate responsibility in the global market, will find this book a thought-provoking yet balanced analysis. Clearly written, this has become the textbook of choice in this increasingly important field.

TABLE OF CONTENTS

Chapter 1 | 6  pages, the value foundation for a global society, chapter 2 | 20  pages, ethics and international business, chapter 3 | 20  pages, human rights concepts and principles, chapter 4 | 38  pages, political involvements by business, chapter 5 | 26  pages, labor and production standards, chapter 6 | 34  pages, product and export controls, chapter 7 | 32  pages, marketing motives and methods, chapter 8 | 30  pages, culture and the human environment, chapter 9 | 32  pages, nature and the physical environment, chapter 10 | 18  pages, business guidance and control mechanisms, chapter 11 | 8  pages, deciding ethical dilemmas.

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Videos Concepts Unwrapped View All 36 short illustrated videos explain behavioral ethics concepts and basic ethics principles. Concepts Unwrapped: Sports Edition View All 10 short videos introduce athletes to behavioral ethics concepts. Ethics Defined (Glossary) View All 58 animated videos - 1 to 2 minutes each - define key ethics terms and concepts. Ethics in Focus View All One-of-a-kind videos highlight the ethical aspects of current and historical subjects. Giving Voice To Values View All Eight short videos present the 7 principles of values-driven leadership from Gentile's Giving Voice to Values. In It To Win View All A documentary and six short videos reveal the behavioral ethics biases in super-lobbyist Jack Abramoff's story. Scandals Illustrated View All 30 videos - one minute each - introduce newsworthy scandals with ethical insights and case studies. Video Series

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Case Studies

More than 70 cases pair ethics concepts with real world situations. From journalism, performing arts, and scientific research to sports, law, and business, these case studies explore current and historic ethical dilemmas, their motivating biases, and their consequences. Each case includes discussion questions, related videos, and a bibliography.

A Million Little Pieces

James Frey’s popular memoir stirred controversy and media attention after it was revealed to contain numerous exaggerations and fabrications.

Abramoff: Lobbying Congress

Super-lobbyist Abramoff was caught in a scheme to lobby against his own clients. Was a corrupt individual or a corrupt system – or both – to blame?

Apple Suppliers & Labor Practices

Is tech company Apple, Inc. ethically obligated to oversee the questionable working conditions of other companies further down their supply chain?

Approaching the Presidency: Roosevelt & Taft

Some presidents view their responsibilities in strictly legal terms, others according to duty. Roosevelt and Taft took two extreme approaches.

Appropriating “Hope”

Fairey’s portrait of Barack Obama raised debate over the extent to which an artist can use and modify another’s artistic work, yet still call it one’s own.

Arctic Offshore Drilling

Competing groups frame the debate over oil drilling off Alaska’s coast in varying ways depending on their environmental and economic interests.

Banning Burkas: Freedom or Discrimination?

The French law banning women from wearing burkas in public sparked debate about discrimination and freedom of religion.

Birthing Vaccine Skepticism

Wakefield published an article riddled with inaccuracies and conflicts of interest that created significant vaccine hesitancy regarding the MMR vaccine.

Blurred Lines of Copyright

Marvin Gaye’s Estate won a lawsuit against Robin Thicke and Pharrell Williams for the hit song “Blurred Lines,” which had a similar feel to one of his songs.

Bullfighting: Art or Not?

Bullfighting has been a prominent cultural and artistic event for centuries, but in recent decades it has faced increasing criticism for animal rights’ abuse.

Buying Green: Consumer Behavior

Do purchasing green products, such as organic foods and electric cars, give consumers the moral license to indulge in unethical behavior?

Cadavers in Car Safety Research

Engineers at Heidelberg University insist that the use of human cadavers in car safety research is ethical because their research can save lives.

Cardinals’ Computer Hacking

St. Louis Cardinals scouting director Chris Correa hacked into the Houston Astros’ webmail system, leading to legal repercussions and a lifetime ban from MLB.

Cheating: Atlanta’s School Scandal

Teachers and administrators at Parks Middle School adjust struggling students’ test scores in an effort to save their school from closure.

Cheating: Sign-Stealing in MLB

The Houston Astros’ sign-stealing scheme rocked the baseball world, leading to a game-changing MLB investigation and fallout.

Cheating: UNC’s Academic Fraud

UNC’s academic fraud scandal uncovered an 18-year scheme of unchecked coursework and fraudulent classes that enabled student-athletes to play sports.

Cheney v. U.S. District Court

A controversial case focuses on Justice Scalia’s personal friendship with Vice President Cheney and the possible conflict of interest it poses to the case.

Christina Fallin: “Appropriate Culturation?”

After Fallin posted a picture of herself wearing a Plain’s headdress on social media, uproar emerged over cultural appropriation and Fallin’s intentions.

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While climate change poses many abstract problems, the actions (or inactions) of today’s populations will have tangible effects on future generations.

Cover-Up on Campus

While the Baylor University football team was winning on the field, university officials failed to take action when allegations of sexual assault by student athletes emerged.

Covering Female Athletes

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Covering Yourself? Journalists and the Bowl Championship

Can news outlets covering the Bowl Championship Series fairly report sports news if their own polls were used to create the news?

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Defending Freedom of Tweets?

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Dennis Kozlowski: Living Large

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Digital Downloads

File-sharing program Napster sparked debate over the legal and ethical dimensions of downloading unauthorized copies of copyrighted music.

Dr. V’s Magical Putter

Journalist Caleb Hannan outed Dr. V as a trans woman, sparking debate over the ethics of Hannan’s reporting, as well its role in Dr. V’s suicide.

East Germany’s Doping Machine

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Ebola & American Intervention

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Edward Snowden: Traitor or Hero?

Was Edward Snowden’s release of confidential government documents ethically justifiable?

Ethical Pitfalls in Action

Why do good people do bad things? Behavioral ethics is the science of moral decision-making, which explores why and how people make the ethical (and unethical) decisions that they do.

Ethical Use of Home DNA Testing

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Flying the Confederate Flag

A heated debate ensues over whether or not the Confederate flag should be removed from the South Carolina State House grounds.

Freedom of Speech on Campus

In the wake of racially motivated offenses, student protests sparked debate over the roles of free speech, deliberation, and tolerance on campus.

Freedom vs. Duty in Clinical Social Work

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Full Disclosure: Manipulating Donors

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Gaming the System: The VA Scandal

The Veterans Administration’s incentives were meant to spur more efficient and productive healthcare, but not all administrators complied as intended.

German Police Battalion 101

During the Holocaust, ordinary Germans became willing killers even though they could have opted out from murdering their Jewish neighbors.

Head Injuries & American Football

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Head Injuries & the NFL

American football is a rough and dangerous game and its impact on the players’ brain health has sparked a hotly contested debate.

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High Stakes Testing

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Egil Krogh was a young lawyer working for the Nixon Administration whose ethics faded from view when asked to play a part in the Watergate break-in.

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U.S. Olympic swimmer Ryan Lochte’s “over-exaggeration” of an incident at the 2016 Rio Olympics led to very real consequences.

Meet Me at Starbucks

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Myanmar Amber

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Negotiating Bankruptcy

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Pao & Gender Bias

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Pardoning Nixon

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Patient Autonomy & Informed Consent

Nursing staff and family members struggle with informed consent when taking care of a patient who has been deemed legally incompetent.

Prenatal Diagnosis & Parental Choice

Debate has emerged over the ethics of prenatal diagnosis and reproductive freedom in instances where testing has revealed genetic abnormalities.

Reporting on Robin Williams

After Robin Williams took his own life, news media covered the story in great detail, leading many to argue that such reporting violated the family’s privacy.

Responding to Child Migration

An influx of children migrants posed logistical and ethical dilemmas for U.S. authorities while intensifying ongoing debate about immigration.

Retracting Research: The Case of Chandok v. Klessig

A researcher makes the difficult decision to retract a published, peer-reviewed article after the original research results cannot be reproduced.

Sacking Social Media in College Sports

In the wake of questionable social media use by college athletes, the head coach at University of South Carolina bans his players from using Twitter.

Selling Enron

Following the deregulation of electricity markets in California, private energy company Enron profited greatly, but at a dire cost.

Snyder v. Phelps

Freedom of speech was put on trial in a case involving the Westboro Baptist Church and their protesting at the funeral of U.S. Marine Matthew Snyder.

Something Fishy at the Paralympics

Rampant cheating has plagued the Paralympics over the years, compromising the credibility and sportsmanship of Paralympian athletes.

Sports Blogs: The Wild West of Sports Journalism?

Deadspin pays an anonymous source for information related to NFL star Brett Favre, sparking debate over the ethics of “checkbook journalism.”

Stangl & the Holocaust

Franz Stangl was the most effective Nazi administrator in Poland, killing nearly one million Jews at Treblinka, but he claimed he was simply following orders.

Teaching Blackface: A Lesson on Stereotypes

A teacher was put on leave for showing a blackface video during a lesson on racial segregation, sparking discussion over how to teach about stereotypes.

The Astros’ Sign-Stealing Scandal

The Houston Astros rode a wave of success, culminating in a World Series win, but it all came crashing down when their sign-stealing scheme was revealed.

The Central Park Five

Despite the indisputable and overwhelming evidence of the innocence of the Central Park Five, some involved in the case refuse to believe it.

The CIA Leak

Legal and political fallout follows from the leak of classified information that led to the identification of CIA agent Valerie Plame.

The Collapse of Barings Bank

When faced with growing losses, investment banker Nick Leeson took big risks in an attempt to get out from under the losses. He lost.

The Costco Model

How can companies promote positive treatment of employees and benefit from leading with the best practices? Costco offers a model.

The FBI & Apple Security vs. Privacy

How can tech companies and government organizations strike a balance between maintaining national security and protecting user privacy?

The Miss Saigon Controversy

When a white actor was cast for the half-French, half-Vietnamese character in the Broadway production of Miss Saigon , debate ensued.

The Sandusky Scandal

Following the conviction of assistant coach Jerry Sandusky for sexual abuse, debate continues on how much university officials and head coach Joe Paterno knew of the crimes.

The Varsity Blues Scandal

A college admissions prep advisor told wealthy parents that while there were front doors into universities and back doors, he had created a side door that was worth exploring.

Providing radiation therapy to cancer patients, Therac-25 had malfunctions that resulted in 6 deaths. Who is accountable when technology causes harm?

Welfare Reform

The Welfare Reform Act changed how welfare operated, intensifying debate over the government’s role in supporting the poor through direct aid.

Wells Fargo and Moral Emotions

In a settlement with regulators, Wells Fargo Bank admitted that it had created as many as two million accounts for customers without their permission.

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How to Navigate the Ethical Risks of Doing Business in China

• Seth D. Kaplan

Five principles to consider.

Xi Jinping’s China is different than the country companies dealt with in the 1990s and 2000s. China’s size, state capacity, and specific policies create unique ethical risks; companies can inadvertently become involved in human rights violations or military projects. Firms have dealt with this situation through four common strategies: withdraw, continue and contain, operate with opposition, and support China’s standards. To find the right strategy, executives should follow these five principles: 1) increase your due diligence on any initiative involving China, 2) proactively consider the alternatives to doing business in China, 3) avoid transferring technology that might have military or surveillance applications, or investing in ways that will make sensitive tech more available, 4) be as transparent as possible about your operations and investments, and your ethical safeguards, 5) give employees with conscientious objections to doing business with China a way to voice these concerns and opt-out of specific projects.

For decades, companies have poured into China to take advantage of the country’s manufacturing prowess and to serve its enormous market. While firms were largely aware of potential business risks, like intellectual property theft and the need to navigate corruption, executives have been less concerned about risks to their firms’ ethics and reputation. But in recent years the situation has changed dramatically, and companies such as Google, Disney, and the NBA have to steer through a much more perilous, and in some cases impassable, ethical landscape.

• SK Seth D. Kaplan , a Professorial Lecturer in the Paul H. Nitze School of Advanced International Studies (SAIS) at Johns Hopkins University, is the author of Human Rights in Thick and Thin Societies . He previously lived in China for seven years, where he started several companies.

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