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Business Ethics

Ethical Culture & Global


Business
What is Globalization?

Globalization is about an interestingly


interconnected and interdependent world,
propelled by international trade;
technology; investment and finance; risk
taking and harnessing opportunity for
growth.
Factors Promoting Globalization

1. The end of the cold war and the rise of the


emerging economies inAsia, Latin America,
Europe, Russia, Africa, and Middle East.
2. The emergence of China as a global
manufacturer and expansion of Indian market.
3. The information technologies and internet
facilitated expansion in trade and productivity.
4. Free trade and trading agreements-European
Union (EU), North American Free Trade
Agreement (NAFTA), World Trade Organization
(WTO)
Factors Promoting Globalization-
Cont.
5. The Bretton Wood Institutions-World Bank
and International Monetary Funds activities
promoted capital flow to different part of the
globe, creating new markets.
6.Global Terrorism has affected how business is
conducted. After 911 the global economy was
significantly affected. For example the airline
industry suffered losses, which impacted the
global economy.
7.Emergence of Multinational enterprises
(MNE). For example Coca-Cola, GM, Ford among
others in many countries.
Importance of Ethics in Global
Business
Mitigate reputational risk of an
organization: Making payments to get
contracts and business is a common practice
in developing countries. For example, in
2007, Siemens, a German company paid
over 2 billion in bribe leading to the
disgraceful exit of its CEO. BAE Systems also
paid 2 billion bribe to a Saudi prince which
was investigated by US government. This
scandals can damage the reputation of
companies.
Importance of Ethics in Global
Business
Ethics Create Shareholder Value: Ben
Heineman, former CEO of GE in an Article
in Harvard Business Review posited that
there is causal relationship between
business performance and ethics. Global
business thrives on integrity, making
good business good ethics
Importance of Ethics in Global
Business
Cultural Variation: Multinational organizations
are confronted with the challenge of managing
different types of employees and stakeholders
with diverse ethical expectations. Companies also
have integrity to demonstrate in order to form
partnerships and collaborations with other global
companies.
Piracy and Intellectual Property Protection:
250 billion is lost to Piracy and Intellectual
Property Protection. To cure this situation ethics
must be embraced.
Gift vs. Bribery
Bribery is considered counter-productive to
fair international commerce.
The valid question often asked is what is the
line between gifts and bribes? President of
Transparency International in Nigeria,
Narayan Manandhar attempted a distinction.
He asserts that a bribe becomes extortion
when it is demand-driven. A bribe could turn
into a gift when it is supply-driven. OECD in
2003 states that gift mean any exchange that
is Genuine, independent, free, and
transparent (GIFT).
Workplace discrimination in global
context
Factors causing change at workplace
After 911 many workplaces changed because
of government and industry regulations to
deal with terrorism-stringent background
checks among others.
Also difference in culture and values affected
the way the workplace functions. For example
in some countries such as Belguim, Brazil and
Chile centralized decision making is cherished
whiles in countries like Italy and South Africa
decision-making is preferably decentralized.
Workplace discrimination in global
context
Dimension of Global Workplace
Discrimination
Gender- Glass ceiling exist at the global
workplace. Dukes vs. Wal-Mart case
exemplifies gender discrimination by a
multinational corporation. Not all countries
have sexual discrimination laws. For example
France, Venezuela, and Taiwan have no laws
prohibiting employment discrimination.
Ukraine, South Africa, and Russia have no
laws prohibiting sexual harassment.
Workplace discrimination in global
context
Dimension of Global Workplace
Discrimination
Racial discrimination-In a global survey,
about 19% of employers believe there should
be discrimination in making employment
decisions. The complex nature of global
recruitment process makes it difficult to
prevent racial bias in hiring process.
There has been increase in workplace
bullying; moral harassment; and mobbing in
many countries.
Managing Multi-cultural Workforce

Managers should understand and avoid


contravention of laws and regulations of a host
country.
Must respect the rights of employees to join
unions and collectively bargain.
Should adopt non-discriminatory employment
practices and promote equal job opportunities.
Should provide equal pay for equal work.
Should produce more good than harm to the
host nation.
Managing Multi-cultural Workforce

Respect the human right of employees.


Provide favorable work conditions-limited
working hours, holiday pay, and job security.
Balance job opportunities, conditions of
services, job training, and safety.
Pay taxes and obey laws of host countries.
Corporate with local law enforcement.
Undertake corporate social responsibility to
empower stakeholders.
Managing Multi-cultural Workforce

Should comply with host countys consumer


protection laws.
Safeguard the health and safety of customers
Should operate within national and
international environmental laws and
regulations.
Should not pay bribe.
Should not interfere with the politics of the
host country.

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