Introduction: A Life-Long Concern for International Affairs

Since his high school years Richard De George has been interested in “international affairs,” engaged in understanding the world beyond the U.S. borders, and committed to searching and finding ethical standards for living together on the planet Earth. As far as I can see, this thread has run through De George’s entire life. After graduating from high school, he seriously considered entering the diplomatic career. He learned the Russian language, specialized in Marxism and Soviet studies, and visited the Soviet Union at a time when most scholars in the West ignored or shied away from studying the dominant philosophy in Eastern Europe and Russia. De George invited numerous scholars from abroad to his university in Lawrence and was an acclaimed speaker around the world. His textbook Business Ethics, first published in 1982 and now in its seventh edition (2010), is a master work not only for students but also for teachers of business ethics, and has been translated into Japanese, Russian, Chinese, and Serbian and recorded for the blind. His work on international business ethics is particularly documented in Competing with Integrity in International Business (1993a), Motorola’s Uncompromising Integrity (1998) and numerous articles, and can be tracked in its evolution through the seven editions of his textbook.

In multiple ways Richard De George supported the development of business ethics in Europe in the 1980s, as President of the Society for Business Ethics, with his pioneering textbook of business ethics, and through thought-leadership and advice for the fledging European Business Ethics Network. As Vice-President of the International Federation of Philosophical Societies (known by its French initials as FISP), he invited Henk van Luijk and me to present papers on business ethics at the World Congress of Philosophy 1988 in Brighton (UK). This led to the foundation of ISBEE, the International Society of Business, Economics, and Ethics, during the EBEN-Conference 1989 in Barcelona, a few weeks before the Fall of the Berlin Wall. As Secretary General (1990–1996) and then President (1996–2000), De George built up ISBEE to a society of truly global character, following the model of FISP and thus rejecting the common tendency of American and Western European associations to “internationalize” their memberships simply by expanding their spheres of influence beyond continental borders. Throughout his life-long involvement in “international affairs,” De George has showed great interest in and high respect for people and cultures around the world, practicing the opposite of what might be called “American Imperialism.”

Given De George’s strong interest and involvement in “international affairs” and my own international orientation, I would like to explore and unfold what “international” can mean and how it may influence the understanding of business ethics and human rights. In the age of globalization, such an exercise of clarification might seem unnecessary or even pointless. Thirty years ago the expansion of business beyond national borders attracted much attention, and “international” signaled a new frontier for business and business studies.Footnote 1 Over time, however, international connections and activities have become daily business and almost invisible, thus seemingly no longer in need of being articulated explicitly. However, despite the loose and widespread talk of “globalization,” there is an enormous variety of international relations that cannot simply be subsumed under the category of “globalization.” Hence a more sophisticated understanding of international relations is required. Although the decline of the nation-state has been rung in (e.g., by Ohmae 1995) and a new, globally oriented post-Westphalian world order seems to be emerging (see, e.g., Habermas 2001), the nation-state has proved to be quite resilient and has remained or become again a central and, in many respects, the decisive, actor in international relations.

Global challenges such as climate change, international terrorism, and cyber security undoubtedly require collective action at the global level. But many challenges are less global than they seem to be at the first glance; we may think of health epidemics like SARS or the instability threat to the financial system. Although the old times of colonial powers are gone, we can observe new forms of empires in political, economic, technological, business, and other terms. Those in the driver’s seat who determine the rules of the game may ignore, disregard, or take for granted the power imbalances, while those affected by them usually feel the impacts but have no say in changing them. Moreover, despite globalization, there are still pockets of countries, areas, and spheres of life which are secluded from and “foreign” to outsiders. Ethnological studies have often emphasized the otherness of native cultures, to be recognized in their own rights. Little or no interaction appears to occur between them and the rest of the world.

These few examples may illustrate the fact that there is indeed a wide variety of international relations. They have to be taken seriously in a differentiated way if business ethics wants to be relevant in international affairs. Therefore, I would like to suggest a typology of international relations and combine it with the three-level conception of business ethics that is nowadays widely accepted in business ethics circles. With this framework explained, I attempt to show how De George has addressed and dealt with different types of international relations, demonstrating great sensitivity, and sophisticated understanding.

The Extended Three-Level Conception of Business Ethics with Four Types of International Relations

As long as business ethics had been discussed only within a country (say the United States or Germany in the 1980s), many of its conceptual implications often were taken for granted. But as soon as business ethics in different countries were compared with each other, it became necessary to question those implications and eventually to enlarge and specify them. A case in point concerns the unit of analysis: is business ethics about (individual) business people, business organizations and/or economic systems? In order to conduct international comparisons increasingly under the influence of globalization, a framework was needed that was, as far as possible, comprehensive in its coverage, objective in its assessment, and readily applicable. So the three-level conception of business ethics has emerged, comprehending the levels of individuals (persons), organizations, and systems (that is, the so-called micro-, meso- and macro-levels). Early testimonies of this comprehensive understanding are found in articles by Goodpaster (1992) and Enderle (1996). Over time, this framework has been widely adopted, by, among others, Ulrich (2008), and most recently in the Global Survey of Business Ethics edited by Rossouw and Stückelberger (2011).Footnote 2

Still, this three-level conception of business ethics (which might include even further levels) does not explicitly account for the international dimension with its different types. It, therefore, has to be “extended” (e.g., like a nuclear to an extended family; see Enderle 2003). This could be done by adding one or more levels to the three-level conception. However, such an addition would fail to express the fact that international relations can affect each of the three levels. Personal (and inner-group) relations can stretch across national borders: think of managers, employees and families with cross-national ties. Relations within organizations can cross national borders, as it is the case in multinational corporations, international trade unions and consumer organizations. And relations within systems can transcend national borders, for instance, in bilateral agreements, regional treaties or global institutions like the World Trade Organization. Hence, it is more accurate to conceptualize international relations as intersecting with all three levels (see Fig. 1).

Fig. 1
figure 1

Extended three-level conception of business ethics

Full size image

Given this wide variety of international relations, the question then arises how to classify them in appropriate types. For this purpose, it is suggested to focus on the “border” between the national and the international realm and to specify the types of international relations in accordance with different types of permeability of the borders.

To illustrate the varying significance of borders, one may recall examples such as the dramatic changes of relations between East and West Germany before and after the fall of the Berlin Wall, the far-reaching permeability of borders between the countries of the European Union, the reinforcement of the US-Mexico border, and the erection of border barriers in conflict zones such as the occupied Palestinian territories. Border situations vary a great deal across the globe. They are visualized by photographers like Valerio Vincenzo (in Kuper 2013) and Wiedenhöfer (2013) and discussed by journalists like Kuper (2013), Knight (2013) and Shehadeh (2013). In addition to borders in geographic, historic, economic, and political terms, they can be defined in technological, sociocultural, environmental, and other terms. Needless to say, this diversity of perspectives renders the understanding of borders far more complex and much richer. However, given the scope of this essay, the following systematic considerations are limited to some key characteristics of border permeability in general.

Borders can be permeable in various degrees. At one extreme is hermetic seclusion, which characterized the Ming Dynasty in China in the late sixteenth century or the former communist Albania vis-à-vis its neighbors. At the other extreme of the spectrum is the complete abolition of all borders and total openness, as proposed by some proponents of globalization. Intermediate states give a differentiated picture of international relations and encompass all cross-national variants, including both imminent conflicts and opportunities for collaboration between various actors. These variants can be classified in four types of international relations: the foreign country type; empire type; interconnection type; and globalization type. Although these types can be found at all three levels, the explanations below refer mainly to the macro-level.

  1. (A)

    The foreign country type is exemplified by the relationship of a small economy or small company with a foreign country, for example Switzerland or Schläpfer Embroideries with Nigeria. The international relations differ significantly from domestic relations and have no relevant repercussions on them. The international relations are added to the national framework and can be relatively easily detached from it. Each country is different. Foreigners have to adapt themselves to the host countries, and national borders are relatively impermeable in both directions.

  2. (B)

    Examples of the empire type are seen in the relationship between Great Britain and India during British colonialism, and the United Fruit Company in Central America. This type characterizes international relations as a pure cross-national expansion of domestic relations without significant modification. From the host country’s perspective, the asymmetric power relationship often involves misunderstanding, exploitation and repression. Repercussions on the home country are negligible, since national borders are much more permeable from the home to the host country than in the opposite direction.

  3. (C)

    The interconnection type can be illustrated by the relationship between Italy and the European Union. International relations differ significantly from domestic relations, but are intrinsically interconnected with the latter. What is beyond national borders impacts on domestic relations and domestic relations impact on international relations. Interdependence blurs the notion of a national interest that disregards the interests of other nations and supranational entities. Although they are still important, national borders are pervious to a significant extent in both directions.

  4. (D)

    In the globalization type, exemplified by global warming, international relations are so important that national borders become almost irrelevant. Citizens turn out to be cosmopolitan; multinational firms change into global entities; and nation-states fade away. In principle, this type can comprehend the whole Earth, although until now it is not fully realized.

Some Ethical Implications of the Four Types of International Relations

This typology can be used in either a descriptive-analytical or in a normative-ethical sense. That means it can help describe international relations as they are and analyze them in their working; or it can classify different types of ethical theories prescribing how one should behave under different international conditions. Both approaches are important for business ethics in the international arena. The first provides indispensable knowledge about the international conditions under which governments, firms, and other organizations have to make decisions and take action. The second offers ethical guidance for decisions and actions, which may vary according to different international conditions. In the following four different types of ethics are briefly presented.

The “foreign country” type (A) implies “ethical relativism”: the relevant ethical standards are given by the foreign country. This adaption or adjustment may reflect respect for foreign traditions while disregarding one’s roots in the home country.

The “empire” type (B) implies “ethical imperialism”: the relevant ethical standards are given by the home country. Reaching out to the whole world, the home values and norms are asserted and imposed while adaption or adjustment to the host countries’ values and norms are excluded.

The “interconnection” type (C) implies an “ethics of reciprocity”: the relevant ethical standards arise from both sides, the home and the host country, and are driven by mutual advantage while disregarding or harming the interests of third parties.

The “globalization” type (D) implies a “universal ethics”: the relevant ethical standards apply to all actors on the planet Earth regardless of their different local traditions and cultures.

As this brief outline shows, each type of ethics is somewhat connected to a particular empirical type of international relations and displays some strengths and some weaknesses. It is not claimed that these connections are strictly unequivocal. But it is suggested that the multiple types of ethics observed in debates on ethics in international affairs often correspond to the experiences and conceptualizations of different types of international relations. Take the example of the North American Free Trade Agreement (NAFTA) between Canada, Mexico and the United States. If an empire type of relationship of the United States with the two other countries is assumed, it is difficult to adopt an ethics of reciprocity. Or take the example of overseas immigration to the European Union. An ethics of reciprocity among EU countries is unlikely to acknowledge the human rights of immigrants from outside the EU; rather, a universal ethics appears to be needed for such an acknowledgment.

Richard De George’s Understanding of International Business Ethics

As mentioned in the introduction, dealing with international challenges has been a life-long concern for Richard De George. In the following I attempt to show how De George has developed a sophisticated understanding of international business ethics, the profile of which can be articulated and reinforced with the framework of an extended three-level conception of business ethics. In doing so, I hope to prove that his approach is conceptually robust and differentiated and can open interesting perspectives for further developments.

In the first two chapters of Competing with Integrity in International Business (1993a, CI) De George sets the stage for discussing the ethics of multinational corporations.Footnote 3 He uses the expression “acting with integrity” synonymously with “acting ethically or morally” (CI, 5–8), thereby, as he writes, avoiding the negative connotations “ethics” and “morality” may have for many people and hence substituting “integrity,” which is a key term in American business ethics parlance.Footnote 4

In his foundational considerations on ethics, he first identifies three views that are unacceptable for a serious approach to international business ethics. The “When in Rome” view (CI, 9–15) incorporates the foreign country type of ethics or ethical relativism. “You, citizen of Athens, when you are in Rome, do as the Romans do!” For example, a multinational has to follow the standards of the foreign country by either paying bribes or being clean, according to the standards required abroad. The binding standards are relative to the country and exclude any universal ethics. The “Righteous American” view (CI, 15–17) exemplifies the empire type of ethics or ethical imperialism, expanding its own domestic standards to any situation on the globe. No adjustment or accommodation with foreign standards is possible. The “Naïve Immoralist” view (CI, 17–19) negates any ethical dimension in international business, embracing “the myth of amoral business” criticized by De George as a major theme in all editions of his Business Ethics textbook. In this view, the typology of international relations can include neither a descriptive-ethical nor a normative-ethical dimension, which is an assumption far remote from reality, but nevertheless adopted and defended by famous schools of political science (such as “neorealism” and “offensive neorealism”; see Mearsheimer 2011).

De George elaborates also on the other two types of ethics, here in an affirmative and differentiated sense. The ethics of reciprocity, implied in the interconnection type of international relations, underlies the discussion about negotiating justice in international trade and investment (CI, 33–39) and about the interconnection of American and international business (CI, 57–58). Universal ethics, implied in the globalization type, does not pertain to all levels of ethics ranging from minimal standards to ethical ideals, but is limited to “basic moral norms” (CI, 19–22). They are necessary either for a society to function or for business transactions to take place not only in the national but also in the international realm. The focus on basic moral norms is crucial in facing global pluralism (CI, 24–26) and refuting the myth of amoral business. Basic moral norms provide a common ethical ground which can be conceptualized as “an overlapping consensus” (applying John Rawls’s concept (Rawls 1993) to the international realm), as “hypernorms” (in the sense of Donaldson and Dunfee 1999), or as the Manifesto Global Economic Ethic (promulgated by Küng et al. 2010). These basic norms are to be distinguished against further levels of ethical obligations and ideals. De George offers such a distinction in chapter 10 where he explicates “positive obligations beyond the minimum” and “ethical ideals” (CI, 185–188).

It goes without saying that the precise identification of basic moral norms in substantive terms is a challenging task. However, it should not be avoided, if living together on the planet Earth in a “sustainable” way is imperative, meaning to meet the needs of the present generation without compromising the ability of future generations to meet their own needs (according to the definition of sustainability by the World Commission on Environment and Development 1987).

Basic Moral Norms as Human Rights

One possibility of substantiating basic moral norms is human rights. They have been recognized worldwide as universally, although not undisputedly, valid moral norms, and no other potential norms can rival them in the international arena. Since the Universal Declaration of Human Rights in 1948, the subjects of human rights have included all human beings, and the main bearers of obligations have been the Member States of the United Nations (although, already at that time, “every individual and every organ of society” was also called upon to respect and secure human rights). In recent years, with their growing power and number, transnational corporations and other business enterprises have attracted much attention for human rights violations, becoming another important group of social actors held responsible for respecting human rights. Already in the late 1980s Donaldson (1989) conceived multinationals’ duties in terms of respecting “fundamental international rights.” After launching the United Nations Global Compact by Kofi Anan in 1999, the Guiding Principles on Business and Human Rights were developed by John Ruggie and promulgated by the UN Human Rights Council in 2011 (see Ruggie 2013).

For De George moral rights have been an important topic since his first edition of Business Ethics (1982).Footnote 5 Here he discusses rights in the context of John Rawls’s A Theory of Justice (1971) (at the macro-level) and workers’ rights in the context of corporate responsibility (at the meso-level). In the second edition of Business Ethics (1986) he adds a second chapter on workers’ rights, likely being influenced by Patricia Werhane’s publication on Persons, Rights, and Corporations in 1985. In Competing with Integrity (1993a) he states in guideline #4 that multinationals (Americans and others) should respect the human rights of their employees while conceding that the precise content of “human rights” requires further clarification. Understandably, this limitation to employees is criticized by George Brenkert in his book review (1999), questioning why only employees and not everyone MNCs encounter is included in this guideline. (Later, De George extends the guideline to cover consumers and all others in the host country.)

De George further pursues the question of corporate responsibility for human rights in his lecture “Human Rights and the Multinational Enterprise” (1997) on his visit to The Netherlands in 1996 when he received an honorary doctorate from Nijenrode University, and in his article “Human Rights and the Multinational Enterprise, Revisited” (1999) in honor of Henk van Luijk. He discusses three obligations which are taken up and integrated into later editions of Business Ethics.

The first obligation arises when human rights “apply directly to corporations”: for example, the right to freedom from slavery, the right to form and to join trade unions, the right to a just wage, etc. This obligation is fairly clear, although the role of the state and the situation of local businesses need to be taken into account for a more differentiated understanding of this obligation. The second obligation of multinationals consists in not using suppliers who violate the human rights of their workers. When, for instance, suppliers employ child or forced labor, multinationals violate the human rights of those workers indirectly. This obligation, too, can hardly be questioned, which, however, does not diminish the human rights obligations of other social actors such as local governments, businesses, and non-governmental organizations. The third obligation refers to multinationals operating in a country in which (political) human rights abuses by the government itself (not the suppliers) are either systematic or rampant. This is a highly controversial issue that raises a host of questions which cannot be pursued here further. De George discusses the cases of apartheid South Africa, post-1991 Russia and China, paying close attention to the highly different conditions of these countries. While some forms of collective action of multinationals can be recommended—sometimes in collaboration with the home and/or host governments, still the situation of each country should be evaluated individually. If multinationals operate in those countries, they should do what they can to help prevent abuses of human rights. “At the very least, whether or not they are able to bring about changes in government policy, while operating in those countries they must take all measures possible to ensure that they do not violate human rights either directly or indirectly.” (BE 2010, p. 176).

With this position, De George comes close to the UN Framework for Business and Human Rights that requires the states to “protect” and the corporations to “respect” human rights and both to “remedy” human rights violations. Differences lie in the scope of human rights for which the Framework enumerates all 30 human rights without explicitly distinguishing political from economic and other rights; and in the way that the Framework addresses the states and the corporations on an equal basis (not primarily the states and secondarily the corporations), using different terms of obligations (“the duty to protect” and “the responsibility to respect”), and basing corporate responsibility on the direct and indirect “impact” on any of the 30 human rights (not just on how human rights “apply” to corporations). Moreover, the Framework offers highly elaborated tools and an interpretative guide for corporations in order to properly implement human rights policies.

The Relevance of Background Institutions

De George defines background institutions in a fairly comprehensive sense. In the United States they constitute the limits of a free-enterprise, democratic, and liberal society (CI, 26–27) or the “environment that limits, restricts and controls [business] in many ways,” made up of “the plethora of laws, governmental regulations, customs, unions, consumer and environmental groups, and popular pressures, demands, and expectations.” They include formal and informal institutions in the economic, political-legal, and sociocultural system which form a society. They determine to a large extent the space of freedom (or the range of options) available to actors in general and business organizations in particular. From an ethical perspective background, institutions are of utmost importance because of the principle that “ought implies can.” In other words, having a moral obligation (or responsibility) in a concrete situation presupposes having the capability (or freedom) to act. This correspondence between the space of freedom and moral responsibility can be visualized with Fig. 2.

Fig. 2
figure 2

Space of freedom and responsibility

Full size image

Background institutions determine the spaces of freedom at all three levels, that is at the micro-, meso- and macro-level, and cannot be easily changed in the short run. Hence the importance of institutional ethics. De George speaks of “adequate” background institutions when, at least, the basic moral norms can be met, the social obligations beyond the minimum can be fulfilled, and means of dispute resolution are provided. As far as the intranational relations are concerned, this is true of the United States and the other developed democratic countries of the world, even though their institutions may differ and still need improvement. Also nondemocratic societies and less industrially developed countries may have sufficient background institutions for their internal needs.

The situation is very different beyond the national level. International background institutions are very weak, inadequate or absent at all. That’s why the challenges for international business ethics are so complex and difficult to meet.

De George shows great sensitivity for the huge variety of international challenges in less developed countries, Central and Eastern Europe, the Former USSR, China, Japan, and in the European Union (see particularly the chapter 3–9 in Competing with Integrity). And he offers sharp and balanced insights and valuable guidance to address those issues.

A case in point is his view of the developments in Russia and Eastern Europe after the fall of the Berlin Wall. Based on his intimate knowledge of the former Soviet Union, he understands that the transition from a socialist, centrally planned system to a free market economy is far more complex than the majority of American advisers in the 1990s believed it to be. In his article “International Business Ethics: Russia and Eastern Europe” (1993b) De George describes the ethical and social background of those countries, in which government control was ubiquitous and the overthrow of the Communist regime was a protest against the party and its control. As a result, the old morality had been undermined and the new morality was ineffective. Moreover, the development of small entrepreneurs has been officially both encouraged and hampered, and different forms of privatization of industry caused different problems in those countries.

When the old background institutions are collapsing and new and adequate ones are not yet in place, it is often difficult to discern what is ethically right and wrong. A foreign-country approach for multinational corporations would suggest ethical relativism, just following the rules of the country. However, the problem is precisely that the rules often are not clear and established. If one advocates that multinationals should cling to their home country standards, adopting a kind of ethical imperialism, this would lead to a disrespect of the host country’s culture, and most likely these multinationals would not be able to stay there in business for long. And to negate—as the naïve immoralists do—the existence of ethical issues at all is not a satisfactory solution either.

De George proposes a nuanced and well-founded approach. On the one hand, he asserts that basic moral norms are indispensable for doing business in any country. Today, they are substantiated as human rights and supported by a broad and worldwide consensus. With this assertion he refutes all three views indicated above: not only ethical relativism and the myth of amoral business but also ethical imperialism because human rights arguably constitute universal moral norms and cannot be considered simply as norms imposed by Western culture.

On the other hand, beyond this common ethical ground, De George opens up a wide space for multiple types and levels of analysis and guidance. First of all, the notion of background institutions is crucial for a number of reasons. As the examples of Russia and Eastern Europe above show, background institutions and the lack thereof must be thoroughly taken into account in order to clearly understand the constraints under which individuals, organizations, and other actors have to operate in a particular country: the changing role of government, the uncertainty of public morality, the pressures by criminal organizations small entrepreneurs are exposed to, and the different forms and varying status of privatization, etc.

Moreover, these conditions are relevant for properly determining the ethical demands in those concrete situations. Business ethics as a kind of applied ethics cannot simply apply general ethical principles to any situation, regardless of the situational conditions and structures. Rather, in order to ascertain the ethical content specifically, sound business ethics has to draw on both ethical principles and thorough knowledge of the context of application, or, figuratively speaking, it has “to walk on two legs” (see Enderle 1999, 2003, pp. 538–540). Such an approach is required in the national and international settings alike; but it is particularly demanding in the international context because one tends to be less familiar with international background institutions and the lack thereof.

Furthermore, De George discusses the question whether a local entrepreneur, say, in Russia should follow the same ethical standards (for instance, of not paying bribes) as American multinationals in that country should, given the same background institutions or the lack thereof. Asserting that the latter indeed should observe higher ethical standards, he seems to defend an ethics of double standards. However, he argues that the situations of the local entrepreneur and of the American multinational are very different (or “their spaces of freedom” differ greatly, using the terminology introduced above):

The local entrepreneur has no choice but to operate within a corrupt system or not to operate at all. The American multinational, on the other hand, has a very real option of not operating at all, while continuing to operate elsewhere that it already does. Second, the multinational does not need to engage in bribery. It has available hard currency, which is in such great demand that, if anything, it needs to give some attention to the fact that it can skew the allocation of resources to the serious disadvantage of local firms. If bribes are demanded, an American company can and should point to the American Foreign Corrupt Practices Act as an added reason precluding its paying bribes to public officials. If bribes are actually necessary to conduct business, the American company can protest through official governmental and intergovernmental channels; it can use the media to expose the demands; and it can band together with other American companies similarly situated to jointly refuse to pay such demands. In short, an American company has a wide variety of options available that are not available to the local entrepreneur. Therefore, the multinationals have no justification for engaging in such practices. (1993a, pp. 17–18)

And he concludes:

The multinational in the given context, because of the strength of its position, has a positive obligation to set an example of ethics in business and to encourage the development of background institutions conducive to stability and to business practices that benefit society as a whole. (1993a, p. 18)

This example of dealing with a seemingly double ethical standard illustrates De George’s nuanced approach that emphasizes the importance of background institutions while accounting for the different spaces of freedom business persons and organizations may have in concrete situations. It also indicates De George’s keen understanding of different types of economic systems. Already in the 1960s and 1970s he studied Soviet and East European Marxism (De George 1966, 1967, 1968, 1969, 1976). These insights led him to scrutinize the issues of justice and economic systems in general and the morality of American capitalism in particular. Thus not surprisingly, already in the first edition of Business Ethics (1982) and in all subsequent editions, two full chapters are dedicated to these macro-issues, which are only touched upon or even ignored in the majority of American business ethics textbooks.Footnote 6 In turn, fully aware of the relevance of systemic issues for business ethics in his own country, he can make a strong case for taking them seriously in other countries and international relations as well.

Implications of the Three-Level Conception of Business Ethics

An important legacy of De George’s work in business ethics is, in my view, his clear and consistent emphasis that the field of business ethics should comprehend more than one level of analysis, at least the systemic (macro), organizational (meso) and individual (micro) levels. This means that, on the one hand, each level is indispensable and should be identified as such; and, on the other hand, no level can be treated adequately if it is cut from its relations to other levels. The following examples highlight this comprehensive and differentiated view and show its relevance for the current discussions of business ethics.

The poor treatment or neglect of systemic issues is apparent—paradoxically—in a host of publications on “business and society.” They ignore the fact that the economic system mediates between business and society. All too often the analysis jumps from “business” directly to “society” at large as if business organizations weren’t embedded and shaped by the economic system as part of the overall system of society. This neglect of the economic system has far-reaching consequences. The purpose of the company, commonly taken for granted, is not articulated and aligned with the purpose of the economy. Since business operates in and focuses on the marketplace, the market is often mistaken for the entire economy. The company’s relations to its various stakeholders do not account for systemic issues of the economy. And when corporate relations to “society” are investigated, the targets are simply “people,” “citizenship,” or the “environment” detached from any economic content.

Also, a lack of systemic focus can be observed in many discussions on CSR (corporate social responsibility). If CSR is defined as occurring “on a voluntary basis” (as in the Green Paper of the CEC in 2001), nothing is said about the legal requirements of the enterprise. Thus an enterprise can be “socially responsible” while violating laws and regulations. The new EU-definition of CSR in 2011 rectified this flawed notion by demanding the respect for applicable legislation and for collective agreements between social partners as “a prerequisite” for fulfilling the responsibility of enterprises “for their impacts on society” (EC 2011). Still, the content of CSR can vary across countries to the extent that the legislation varies across countries. For example, if unions are not legally required in a country, an enterprise operating there and recognizing unions in its own organization is considered practicing CSR, whereas an enterprise in another country is not considered practicing CSR when it recognizes unions required by that country. Another critical issue concerns tax avoidance by multinationals that is hotly debated today, but already signaled in De George’s guideline #6: “Multinationals should pay their fair share of taxes” (1993a). What does CSR mean in this case?—These puzzling examples cannot but show the need for more consistent and systemic thinking. Fortunately, De George’s paper presented at the Fifth ISBEE Congress 2012 in Warsaw (2012) offers perspicuous and balanced clarification.

A stronger focus on systemic issues is highly recommendable, in addition, from a public policy and a historic perspective. The global financial crisis of 2008–2009, or the Great Recession, was a ground-shaking series of events whose depth and magnitude are still not fully understood, despite thorough investigations like Alan Blinder’s book After the Music Stopped (2013). During the peak of the crisis numerous policy makers, media experts and academics, also from the business ethics field, questioned the capitalistic system and called for serious re-examination of its foundations. However, soon afterward, those voices vanished. What had seemed a rare opportunity to seriously reconsider capitalism, unfortunately, passed and slipped away.

A less dramatic missed opportunity, more narrowly in the field of American business ethics, occurs in the otherwise impressive work Corporate Responsibility: The American Experience (Carroll et al. 2012). While, understandably, the 543-pages volume focuses on the history of business and the idea of corporate responsibility in the United States since 1776, the context of the evolving capitalistic system could have been elaborated further. It is true, the narrative begins with the foundations of capitalism, and the Great Depression is seen as a crisis of capitalism. But, by and large, as the history moves through the nineteenth and twentieth centuries to the beginning of the third millennium, discussion of the systemic context lessens. The reader can get the impression that the American economy basically consists of corporations while consumers and small and medium-sized enterprises are bystanders. Questions of poverty and inequality of income and wealth are lightly touched upon, and the government as economic agent, tax collector and subsidy distributor plays quite an insignificant role. A more elaborated and inclusive discussion of the American economic system would have been desirable.

With regard to the meso-level of analysis, the question of the moral status of the corporation is of paramount importance for being able to attribute moral responsibility to the corporation as an organization. If only persons can bear moral responsibility, it does not make sense to hold organizations morally responsible. And if organizations are conceived as persons, they are treated as ends in themselves with the same rights human persons have, and not as mere means to serve human beings. To avoid these extreme views, De George and other leading scholars in business ethics, many years ago, have proposed to conceive corporations as moral actors who bear moral responsibility for their conduct and impact on people and nature, but do not have the same rights human persons are entitled to.

It is astonishing that many authors still reject or are unaware of this notion of the moral actor. Among them, one can find renowned economists such as Milton Friedman (1970) and Reich (2007, pp. 12–14), along with leading business magazines like The Economist in its two surveys on Corporate Social Responsibility (The Economist 2005, 2008). The underlying rationale is often the individualistic methodology in neoclassical economic theory, which does not account for collective actors.

Unfortunately, this notion of the moral actor attributed to organizations has not been recognized either in documents of the Christian churches on ethics in business and economics (see the memorandum on entrepreneurial action by the Council of the Protestant Church in Germany (Rat der EKD 2008) and the encyclical Caritas in Veritate [Benedict XVI 2009]). Also the Manifesto Global Economic Ethic (Küng et al. 2010) remains silent on this point.

It goes without saying that a sound understanding of the moral status of the corporation particularly matters in the international context, which often provides multinationals large spaces of freedom and lacks adequate background institutions. A case in point is De George’s study of the moral responsibilities of American multinationals in Competing with Integrity in International Business.

The micro-level analysis is indispensable as well. From a philosophical perspective that identifies the individual person as the prime locus of morality, this individual focus is hardly a surprise. But it is no matter of course from the point of view of many social theories such as system theories (e.g., of Niklas Luhmann), and micro-sociology and micro-economics which do not account for persons as individual actors at all or with only very simple and stereotyped characteristics. However, the micro-level is crucial to give room for multiple kinds of ethical questions: virtue ethics in Aristotelian, Confucian or modern philosophies; leadership models, visions, responsibilities, and assessments; ethical challenges, character traits, and life experiences of entrepreneurs; and moral courage and imagination required in many complex and hopeless situations.

Another interesting issue that presupposes the micro-perspective (along with the meso- and/or macro-perspective) is whistleblowing. Already this term seems to be typically American, probably taken from sports when a football player, instead of the referee, cries foul or blows the whistle. The issue has become a hot topic in American business ethics from early on, extensively discussed by De George (since 1982) and others, and it took many bad experiences until a protection of whistleblowers was incorporated in the Dodd Frank Act (2010). In contrast, in Europe and only recently in Japan, the discussion of whistleblowing has grown fairly slowly, and it is still difficult to translate the English term into other languages.

To conclude this explication of the three-level conception of business ethics, it is appropriate to present the technique of “ethical displacement” De George proposed in 1989. By this technique he means “that what appears as a dilemma or even sometimes simply as an ethical problem on one level may only find a true solution on another level” (1990, p. 27). For example, when a sales representative of a pharmaceutical corporation faces the dilemma of either paying the bribe to the hospital in question or losing the deal to a competitor, what should the sales representative do? The suggested answer is that this employee should first use her moral imagination to figure out an honest way to overcome this dilemma. If such a solution at the micro-level is not possible in actuality, the search has to move to the company (or meso) level. The dilemma is not simply a problem for the employee, but, more precisely, for the organization. A corporate culture of integrity requires that appropriate standards, policies, and procedures be in place, which make sure that such dilemmas can be handled with integrity and the employees exposed to bribery can be protected. If the corporation, too, is not able to find a satisfactory solution, the search should move to a higher level: to a group of corporations that face the same kind of problems; to the association of the industry; to the home and/or host country’s government; to an international organization; if necessary, to the systemic (macro) level. Without doubt, the application of ethical displacement can be very demanding in a complex situation like the current bribery allegations against GlaxoSmithKline in China (see Hook and Jack 2013). But moral responsibility requires a steadfast determination to search and fix the problem at the levels where it can be actually solved or, at least, reasonably contained. By the way, De George dedicated a full chapter on dealing with corruption in Competing with Integrity (1993a), following the U. S. Foreign Corrupt Practices Act (passed in 1977) and preceding similar national legislations in Europe (enacted only after the 1999 OECD Convention on Combating Bribery).

Significance of the Extended Three-Level Conception of Business Ethics for Human Rights

As indicated above, the three-level conception of business ethics has emerged from international comparisons and different approaches to business ethics. It is fundamental for dealing with national and international issues as well. It has been extended to distinguish and include four types of international relations. To provide a perspective for further developments, it is now proposed to explore the significance of this conception for better securing human rights in the international arena.

Considering the four types of international relations explained above, one may ask which types are more or less conducive to securing human rights. Given the small and unilateral degree of permeability of borders respectively, the foreign country type (A) and the empire type (B) hardly allow promotion of the advancement of human rights. As many historic examples of isolated countries and multiple forms of colonialism have revealed, these types have prevented rather than promoted the emergence of human rights, involving ethical relativism and ethical imperialism.

More conducive to securing human rights have been the interconnection type (C) and the globalization type (D) of international relations. Both types open the national borders substantially, to the point that, in the latter case, they are practically irrelevant. While the interconnection type presupposes a relatively robust system of nation-states with some fairly established international institutions, the globalization type is still in need of a set of strong global institutions.

Both types can lead to better ways of securing human rights because they strongly expose countries to other countries’ and peoples’ attitudes and behaviors. In the interconnection type the flows of goods, ideas, people, etc. in one direction are reciprocated by flows of goods, ideas, people, etc. in the opposite direction. The way one affects others is strongly influenced by the way one is affected by others. This mutual dependence calls for an ethics of reciprocity or, simply speaking, for the Golden Rule (which, originally, is a moral principle for interpersonal relationships). In expanding this relation between interconnection and reciprocity further, one can understand that human rights have become necessary basic ethical standards within the European Union.

The globalization type assumes that the inflows into the country are so overwhelming that national borders are insignificant and meaningless. Willy-nilly and sooner or later, the country has to face these threats from outside and try to turn them into opportunities. With good reason one can say that “all human beings on earth are in the same boat.” Regardless of nationality, ethnicity, sex, race, and religion, we are all “naked” human beings. This insight calls for a universal ethics in terms of human rights, given the fact that there are no feasible alternatives.

It is noteworthy to recall that these four types of international relations exist, to some extent, simultaneously and influence each other. While the third and the fourth types are growing in importance under the impact of globalization, the first and the second types remain powerful, causing multiple conflicts between all four types. Moreover, the interconnection type and the globalization type are important correctives to each other, the former emphasizing the rootedness in the nation-state and the reciprocity between partners and the latter transcending the nation-state and affirming the universal common ethical ground.

While these considerations pertain to the macro-level of analysis, similar thoughts can be applied to the meso- and micro-level. Suffice to focus, at the end of this essay, on transnational corporations and other enterprises (i.e., on the meso-level).Footnote 7 How is this typology conducive for them to better secure human rights?

As the case of the American multinational in Russia (discussed above by De George) illustrates, the corporation as a moral actor has quite a large space of freedom at the meso-level and is less constrained by Russian background institutions than the local entrepreneur. Hence, empirically speaking, the foreign country type does not apply and, furthermore, ethical relativism is no excuse for paying bribes. With regard to the empire type, it may apply, empirically speaking, in the short run (not accounting for possible backlashes in the future). But from the normative-ethical perspective, ethical imperialism cannot be adopted because it disrespects legitimate moral claims of the country and violates basic norms of human rights.

More differentiated is the application of the interconnection and the globalization type of international relations. First, it is important to recall the notion of corporate responsibility assumed in this essay. The corporation is conceived as a moral actor characterized by its “self-commitment out of freedom in [its] worldly relationships” (according to Walter Schulz’s definition of moral responsibility). This means that the corporation is not just reacting to legal and regulatory demands and economic incentives. But it can and should take a proactive attitude and behavior, which is, by the way, expected in the UN Guiding Principles on Business and Human Rights that require from companies to undertake “due diligence” processes with regard to human rights.

Second, the corporation’s “worldly relationships” are made up of its relations with all stakeholders inside and outside the organization. They can be defined as those “groups and individuals, which can affect or are affected by an organization” (Freeman 1984, p. 86). This means that the borders of the corporation are pervious in both directions to some extent and define the interconnection type, if the relations stretch across national borders. In other words, a multinational does not only significantly impact societies and nature in the international realm, but is also exposed to being significantly impacted by them, which can originate from any level. A recent example of such an impact from the meso-level is the fresh accusations by the New York-based China Labor Watch to Apple over conditions at China iPhone plants (Mishkin 2013). One of its big suppliers, Pegatron in Shanghai, allegedly employed underage workers and pressed its employees to work illegal overtime. Apple reacted swiftly and promised to solve the problem. An impact from the macro-level is, for instance, the investigation into alleged bribery at GlaxoSmithKline by the Chinese government.

Third, when facing ethical challenges that cannot be met individually, multinationals can form alliances with like-minded companies and other organizations. They can engage in self-regulation with agreed-upon ethical standards. And if self-regulation is insufficient to address those challenges, they can help to build up adequate background institutions and regulations by governments.

Generally speaking, corporations characterized by the interconnection type are well advised to embrace an ethics of reciprocity that recognizes the rights of their stakeholders. Then it should not be too demanding to even adopt wholeheartedly human rights policies.

More difficult to show is how the globalization type at the meso-level can lead to better securing human rights. Truly global corporations tend to know no national borders. By using arbitrage between countries and legislations, they can ignore many far-reaching constraints in a globalizing world. For sure, if they took seriously their self-commitment and lived up to their responsibilities of respecting human rights—as the UN Guidelines expect them to do, major progress would be achieved. But it would be neither sufficient nor sustainable without adequate global background institutions. They have to be established at the macro-level in collaboration of the states and international institutions and with the strong support by business and other actors at the meso- and micro-level.

To conclude, exploring and conceptualizing international business ethics is a timely and fascinating task in the age of globalization. It requires great sensitivity and sophisticated understanding for the huge diversity in international business as well as clear and thorough ethical reflections in order to provide practical and reliable guidance through the complexities of business and economic life. In this essay, I have proposed to structure the field of business ethics by distinguishing three levels of analysis and four types of international relations, building on De George’s work. Such differentiation may help to better identify the ethical responsibilities of all actors in business and economics. I also hope this approach will lead to a deeper recognition and a broader implementation of human rights in which business plays an indispensable role, for the better or for the worse. As this essay intends to show, Richard De George has been a farsighted, down-to-earth, and sophisticated trailblazer over more than 30 years. We are deeply grateful for what he has done and been for us.