International Business Chap 3
Chapter 3- Emphasizing Cultures, Ethics and Norms
Learning Objectives
1. Where informal institutions come from?
2. Define culture- 4 main categories (language, religion, social structure, education)
3. Cultures systematically differ from each other
4. Importance of ethics and combating corruption
5. Norms with strategic responses when forms deal with ethical challenges
6. Debates- culture, ethics and norms
7. Implications for action
Opening Case- Cartoons that Exploded
Sep 2005- ‘Jyllands Posten’ (Jutland Post) Danish Newspaper published cartoons of the Muslim prophet Muhammad
Cartoons violated Muslim norm against:
Picturing prophets
Portrayed Muhammad in a highly negative, insulting light
For Denmark- became the biggest political crisis since the Nazi occupation during WW2
Beyond Denmark- 22 countries reprinted the cartoons to make a point about their right of ‘freedom of speech’
Muslims outraged- protests, flags burned, embassies attacked
Danish PM could not apologize on behalf of the newspapers because in principle of freedom of speech enshrined on Denmark- also, no laws existed for empowering to do so
Consequences on businesses:
Arla Foods- Danish, largest dairy firms
Selling to Middle East for past 40 years
Sold $465million/year to region
Reduced to $0 in days after the protests began!
Lost $1.8 million/day- forced to lay-off 170 staff
Carrefour- French supermarket pulled all Danish products from shelves in Middle East branches
Carlsberg (brewer)
Lego (toy maker)
Novo Nordisk (insulin maker)
Solutions to return:
Arla published advertisements in Saudi newspapers saying ‘Denmark respected all religions’
Some switched ‘Made in Denmark’ ‘Made In the EU’
Other Denmark forms used foreign subsidiaries to camouflage their origin
Danish shipping companies (eg: Maersk) took down Danish flag before docking in ports of Muslim countries
Institution Based View
i. Managers and firms rationally pursue their interests within a given
Learning Objectives
1. Where informal institutions come from?
2. Define culture- 4 main categories (language, religion, social structure, education)
3. Cultures systematically differ from each other
4. Importance of ethics and combating corruption
5. Norms with strategic responses when forms deal with ethical challenges
6. Debates- culture, ethics and norms
7. Implications for action
Opening Case- Cartoons that Exploded
Sep 2005- ‘Jyllands Posten’ (Jutland Post) Danish Newspaper published cartoons of the Muslim prophet Muhammad
Cartoons violated Muslim norm against:
Picturing prophets
Portrayed Muhammad in a highly negative, insulting light
For Denmark- became the biggest political crisis since the Nazi occupation during WW2
Beyond Denmark- 22 countries reprinted the cartoons to make a point about their right of ‘freedom of speech’
Muslims outraged- protests, flags burned, embassies attacked
Danish PM could not apologize on behalf of the newspapers because in principle of freedom of speech enshrined on Denmark- also, no laws existed for empowering to do so
Consequences on businesses:
Arla Foods- Danish, largest dairy firms
Selling to Middle East for past 40 years
Sold $465million/year to region
Reduced to $0 in days after the protests began!
Lost $1.8 million/day- forced to lay-off 170 staff
Carrefour- French supermarket pulled all Danish products from shelves in Middle East branches
Carlsberg (brewer)
Lego (toy maker)
Novo Nordisk (insulin maker)
Solutions to return:
Arla published advertisements in Saudi newspapers saying ‘Denmark respected all religions’
Some switched ‘Made in Denmark’ ‘Made In the EU’
Other Denmark forms used foreign subsidiaries to camouflage their origin
Danish shipping companies (eg: Maersk) took down Danish flag before docking in ports of Muslim countries
Institution Based View
i. Managers and firms rationally pursue their interests within a given