The Global Context Lecture 10 Global Corporate Social Responsibility.
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The Global Context Lecture 10 Global Corporate Social Responsibility
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Transcript of The Global Context Lecture 10 Global Corporate Social Responsibility.
The Global Context
Lecture 10
Global Corporate Social Responsibility
Lecture Objectives
• Define Corporate Social responsibility
• Identify corporate social responsibility issues in the global economy
• Propose ways in which business can respond to global inequalities
Why this Topic?
• Globalization brings many pressures and problems
• Problems are partly, but not wholly linked to MNC conduct in international markets
• Globalization is a continuing process and so of continuing interest to ethics in business
Corporate Social Responsibility
• The notion that corporations have an obligation to society to take into account not just their economic impact but also their social and environmental impact.
Global CSR
• Whose standards?
– ETHNOCENTRISM
– CULTURAL RELATIVISM
Codes of Conduct
ARE THERE UNIVERSAL PRINCIPLES?
– FREEDOM OF MOVEMENT
– OWNERSHIP OF PROPERTY
– FREEDOM FROM TORTURE
– FAIR TRIAL
Codes of Conduct
– PHYSICAL SECURITY
– FREEDOM OF SPEECH AND ASSOCIATION
– MINIMAL EDUCATION
– POLITICAL PARTICIPATION
– SUBSISTENCE
The UN Global Compact
FOUR AREAS
• HUMAN RIGHTS
• LABOUR STANDARDS
• ENVIRONMENT
• ANTI-CORRUPTION
Corruption
• ‘Involves the behaviour on the part of officials in the public and private sectors, in which they improperly and unlawfully enrich themselves and/or those close to them, or induce others to do so, by misusing the position in which they are placed’
• (World Bank)
What’s Wrong with Bribery & Corruption?
• REDUCES NATIONAL WEALTH BY DISTORTING THE MARKET
• DIVERTS RESOURCES FROM PUBLIC SERVICE PROJECTS
• UNETHICAL – ABUSE OF POWER
What’s Wrong with Bribery & Corruption?
• UNDERMINES THE DEMOCRATIC PROCESS
• CAN DAMAGE THE ENVIRONMENT
Business Risks
• LOSS OF REPUTATION
• RISK OF PROSECUTION
• NO COMPENSATION FOR LOST BUSINESS
• ONE BRIBE CAN LEAD TO ANOTHER
Business Risks
• ADDS TO THE COST OF DOING BUSINESS
• MAKES DOING BUSINESS DIFFICULT
• LOSS OF TRUST
Corruption
Child Work
TYPES OF CHILD WORK
• ECONOMICALLY ACTIVE
• CHILD LABOUR
• HAZARDOUS WORK
Child Labour
Child Labour
WHY DO CHILDREN WORK?
• PUSH FACTORS
– POVERTY
– LACK OF EDUCATIONAL OPPORTUNTIES
– FAMILY BREAKDOWN
– CULTURAL PRACTICES
Child Labour
WHY DO CHILDREN WORK?
• PULL FACTORS
– CHEAP LABOUR
– OBEDIENT LABOUR
– NIMBLE FINGERS
– INADEQUATE/UNPOLICED LAWS
– POOR INFRASTRUCTURE
What’s Wrong With Child Labour?• DENIAL OF HUMAN RIGHTS
• STEALS CHILDHOOD
• PREVENTS EDUCATION
• EXPLOITED THROUGH LOW OR NO WAGES
• POOR CONDITIONS OFTEN LEAD TO HEALTH PROBLEMS
What’s Wrong With Child Labour?
• PERPETUATES POVERTY
• SWELLS LABOUR SUPPLY AND REDUCES WAGES FOR ALL
• CAN REDUCE ADULT EMPLOYMENT OPPORTUNITES
• LONG TERM COST TO SOCIETY
Why worry?• Ethical problems in global business can leave long-
lasting stains on corporate reputations– Nike– Gap– Coca-Cola– Nestlé
• Obvious damage to expensively-created brand value– Worldwide media, increasingly decentralised
• Possible competitive disadvantage– Bad news demotivates more than good news
motivates
De George’s Code of Conduct• Do no intentional direct harm
– Act so as to benefit the host country– no utilitarian trade-offs;
• The good of the host country may not be the same as the good of the current regime
• Respect the human rights of workers, consumers and others in the host country
• Promote the development of just background institutions, within the host country and internationally
• Respect the laws of the host country as well as its culture and values, provided these do not violate human rights or impose immoral laws
De George, R T (1998), Business Ethics, Prentice Hall
Any Questions ?
