College of Business Administration

Seminar in Business Ethics and Social Institutions

Case Discussion Questions for August 05, 2003:

Discussion will center on different ethical perspectives/frameworks regarding the exploitation of developing nations by U.S. companies for low cost labor. We will focus on Wal-Mart and specifically their labor practices in China.

1) What constitutes exploitation?

a. What value system are you using to define exploitation?
b. Does exploitation exist mainly because there is not a voluntary agreement (i.e. one party has enormous economic power and the other has none)?
c. Who or what (i.e. globalization and/or capitalism) is responsible for exploitation?
d. Who (or what groups) would be most effective in changing the status quo?
e. What are the differences when applying exploitation to laborers in developed versus developing countries?

2) Does a MNC (Multinational Corporation) have any moral and/or ethical responsibilities to ensure a safe, fair, and legal working environment in developing nations as well? At the cost of American prosperity and access to low cost goods?

a. Who has the ultimate moral responsibility when analyzing these ethical issues – the U.S. corporations, the host country, government?
b. Who has the ultimate legal responsibility – the U.S. corporations, the host country, government?
c. Can an MNC become too paternalistic or too politically involved in host country politics?

3) In the example of Wal-Mart manufacturing in China, China has labor laws and Wal-Mart has vendor standards in place. Nonetheless, labor violations still abound. Wal-Mart uses independent auditors like PricewaterhouseCoopers LLP and Cal Safety Compliance Corp. for independent vendor audits. What do you think of this strategy?

a. Are Vendor Standards or Codes of Conducts merely a “hypocritical window dressing” (M. Friedman)?

4) What would happen if Wal-Mart changed their overseas labor practices and stopped using underpaid labor?

a. What are your thoughts of applying an ethical policy for Wal-Mart China under Richard DeGeorge’s Stakeholder Guidelines for International Ethical Decision-Making? (Weiss, 289)

5) How should managers reconcile differences between the home country's social contract and the host country's social contract?

a. Does culture difference matters in ethical decision?

6) “Can the U.S. & its institutions effectively cooperate with and integrate their values and practices (economic, political and foreign policy, business, social, technological and legal) into the religiously, ideologically and economically diverse regions of the world?” (Weiss, p. 280)

a. As the world’s superpower is this our duty?

7) Should MNC’s who are use factories with abusive labor conditions be fined? What other punishments would be effective?

8) Do you think sweatshops are evil?

a. If you believe in free trade, do you therefore believe the situation of exploitation is a necessary (evil) consequence?

9) Do sweatshops, in general, promote economic stability?

10) As an educated consumer, what actions would you take (if any) or what are the responsibilities consumers should take after knowing certain corporations engage in questionable ethical labor practices in foreign countries?

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