Chapter 10 Ethical Issues in the Global Arena © 2012 South-Western, a part of Cengage Learning 1.
-
Upload
andrew-harrison -
Category
Documents
-
view
218 -
download
0
Transcript of Chapter 10 Ethical Issues in the Global Arena © 2012 South-Western, a part of Cengage Learning 1.
Chapter 10Chapter 10Ethical Issues Ethical Issues in the Global in the Global
ArenaArena
© 2012 South-Western, a part of Cengage Learning 1
Backlash Against Globalization
Outsourcing/Offshoring of jobs to less-developed nations
Tenth anniversary of NAFTA in 2004
2© 2012 South-Western, a part of Cengage Learning
Globalists and Antiglobalists
3© 2012 South-Western, a part of Cengage Learning
Pros and Cons of Globalization
4© 2012 South-Western, a part of Cengage Learning
IMPACT
ON
Globalists Antiglobalists
Consumers Free trade promotes lower costs, etc.
Benefits the wealth at the expense of the poor
Employees Faster economic growth Higher wagesImproved working conditions
Places profits above people
Environment Creates resources needed to address environmental issues
Exploits and destroys ecosystemsMore pollution
DevelopingNations
Promotes national economic development, higher standard of living, better working conditions,cleaner environments.
World financial institutions conspire to keep poor nations in debt
Human Rights Creates cultures that support law and free expression.Spreads economic / political freedom to far corners
Corporations pursing profits ignore human rights violations, abuse of workers, free speech, etc.
Underlying Challenges in a Multinational Environment
Two major challenges
1. Achieving corporate legitimacy in an unfamiliar society.
2. Differing philosophies between MNCs and host countries.
5© 2012 South-Western, a part of Cengage Learning
The Dilemma of the Multinational Corporation
6© 2012 South-Western, a part of Cengage Learning
Home CountryStakeholder Pressures
Host CountryStakeholder Pressures
Standards
Practices
Ethics
Laws
Culture
Customs
System ofGovernment
Socioeconomic System
Standards
Practices
Ethics
Laws
Culture
Customs
System ofGovernment
SocioeconomicSystem
The Multinational Corporation
The Infant Formula Controversy
• Classic illustration of ethical questions that arise when conducting business abroad.
Health risks from using formula: No refrigeration Unsanitary conditions Unclean water Using diluted concentration• Bottle feeding led to increases in
malnourished babies.• Nestlé marketed formula to mothers who did
not know how to use it properly.• Protestors caused Nestlé to change its
marketing practices.7
© 2012 South-Western, a part of Cengage Learning
Plant Safety and the Bhopal Tragedy
• A leak of methyl isocyanate gas at a Union Carbide Plan in Bhopal, India killed over 2,000 and injured 200,000.
Raised many ethical questions: Should MNCs have the same standards at home and
abroad? Is it acceptable to locate a dangerous plant where the
workforce is unskilled and uneducated, and where the populace is unaware of the risks?
How wise are laws that require plants to be staffed entirely by local employees?
What is the responsibility of corporations and governments in allowing the use of safe products that become dangerous because of local conditions?
8© 2012 South-Western, a part of Cengage Learning
Sweatshops, Human Rights, and Labor Abuses
• MNC’s use of women and children to cheaply staff factories.
• Many major corporations and many countries have been involved.
Sweatshops• Characterized by child labor, low pay, poor
working conditions, worker exploitation, and health and safety violations.
Increased scrutiny of sweatshop practices in recent years.
9© 2012 South-Western, a part of Cengage Learning
Social Accountability 8000
An effort to improve sweatshop conditions created by Social Accountability International (SAI)1.Child Labor2.Forced Labor3.Health and Safety4.Freedom of Association and Right to Collective Bargaining5.Discrimination6.Discipline7.Working Hours8.Compensation9.Management Systems
10© 2012 South-Western, a part of Cengage Learning
Corruption
• Attempts to influence the outcomes of decisions wherein the nature and extent of the influence are not made public.
Instances of corruption Bribery of government officials
Giving of questionable political contributions
Misuse of company assets for political favors
Kickbacks and protection money for police
Free junkets for government officials
Secret price-fixing agreements
Insider dealing11
© 2012 South-Western, a part of Cengage Learning
Arguments For and Against Bribery
12© 2012 South-Western, a part of Cengage Learning
Bribes versus Grease Payments
Grease Payments•Money given to minor officials to expedite processes.•Relatively small sums of money given for the purpose of getting minor officials to:
Do what they are supposed to be doing Do what they are supposed to be doing faster Do what they are supposed to be doing better
Bribes• Relatively large amounts of money given for
the purpose of influencing officials to make decisions or take actions that they otherwise might nottake.
• Money given, often to high-ranking officials, to get them to purchase goods or services. 13
© 2012 South-Western, a part of Cengage Learning
Balancing and Reconciling Ethics Traditions
The Challenge of the Multinational Corporation
14© 2012 South-Western, a part of Cengage Learning
Home CountryEthical Standards
Host CountryEthical StandardsOR
Ethical Choices in Home versus Host Country Situations
15© 2012 South-Western, a part of Cengage Learning
International LawGlobal Codes of Conduct
BROAD BROAD MIDDLE MIDDLE GROUNDGROUND
Mix of Home and Host Country Standards
CULTURAL RELATIVISM
ETHICAL IMPERIALISM
• Cultural standards
• Ethical/moral standards of home country
HomeCountry
HostCountry
• Cultural standards
• Ethical/moral standards of host country
Application of Ethical Principles