Globalization has led to increased integration of economies and societies through communication networks. It is characterized by promotion of free trade and reduced transportation costs. This has resulted in changes to consumer demand, supply sources, and government policies globally. Multinational corporations operate in multiple countries by investing, selling licenses, contract manufacturing, or opening facilities abroad. While this creates jobs and transfers technology, it can also kill domestic industries and raise ethics issues regarding areas like bribery, taxation, environment, and human rights. Businesses are encouraged to implement ethics policies and audits, respect core human values and local traditions, and work to build a sustainable global society from environmental, economic and social perspectives.
Globalization has led to increased integration of economies and societies through communication networks. It is characterized by promotion of free trade and reduced transportation costs. This has resulted in changes to consumer demand, supply sources, and government policies globally. Multinational corporations operate in multiple countries by investing, selling licenses, contract manufacturing, or opening facilities abroad. While this creates jobs and transfers technology, it can also kill domestic industries and raise ethics issues regarding areas like bribery, taxation, environment, and human rights. Businesses are encouraged to implement ethics policies and audits, respect core human values and local traditions, and work to build a sustainable global society from environmental, economic and social perspectives.
Globalization has led to increased integration of economies and societies through communication networks. It is characterized by promotion of free trade and reduced transportation costs. This has resulted in changes to consumer demand, supply sources, and government policies globally. Multinational corporations operate in multiple countries by investing, selling licenses, contract manufacturing, or opening facilities abroad. While this creates jobs and transfers technology, it can also kill domestic industries and raise ethics issues regarding areas like bribery, taxation, environment, and human rights. Businesses are encouraged to implement ethics policies and audits, respect core human values and local traditions, and work to build a sustainable global society from environmental, economic and social perspectives.
process by which regional economies, societies and cultures have become integrated through a globe-spanning network of communication and execution. Characterized by: Promotion of free trade Elimination of tariffs, creation of free trade zones Reduced transportation costs, especially for ocean shipping. Harmonization of subsidies for local businesses Creation of subsidies for global corporations Harmonization of intellectual property laws across the globe Because of that: Increasing level of changes in the following areas: Consumer demand for goods and services Consumer behaviour and spending patterns Sources of supply of inputs, resources and services Government policies of any country and the ripple effect impact on other countries Issues / Threats like bio warfare, global warming, fast spreading diseases etc. What is an MNC? A multinational corporation is a large corporation which produces or sells goods or services in various countries. Making significant investments in a foreign country Having buying and selling licenses in foreign markets Engaging in contract manufacturing—permitting a local manufacturer in a foreign country to produce their products Opening manufacturing facilities or assembly operations in foreign – mostly developing countries Advantages: Advantages: Create employment in host country Industries of host country get latest technology from foreign countries Domestic traders and manufacturers of the host country gets increased business Level of industrial and economic development increases due to the growth of MNCs in the host country Global markets get tapped or generated Disadvantages: Accountability and legal issues Culture issues Exploitation of people and raw material Killing of certain kinds of domestic host industry Over-focus on materialism and consumerism Unethical distribution and marketing practices Continued.. Globalization has brought forth ethics issue more Organizations attain a competitive edge due to ethical practices Companies need to deal with ethics as one of the backbones of corporate strategies Realization that being ethically proactive is better than ethically reactive Value creating ethical strategies are being recognized as USPs; more than products and services Global Ethical Issues Absolute against relative Business being conducted in the same way everywhere in the world, Or, Changing business practices according to the geographical location Common Global Ethical Issues Bribery Differential pricing Using or dumping prohibited technology / products Tax evasion through transfer pricing and other routes Environmental damage Taking advantage of lack of patents Abuse of human rights Less concern for safety Role of Global Businesses: When it comes to shaping ethical behavior, companies must be guided by three principles. Respect for core human values, which determine the absolute moral threshold for all business activities. Respect for local traditions. The belief that context matters when deciding what is right and what is wrong. Continued.. As part of ethics; Have ethics policies or mandates Appoint ethics officers to ensure compliances Routinely have ethics related audits Require suppliers to participate in the ethics programs Continued.. Encourage suppliers and self to not to participate in any human or employment rights abuses Encourage and promote diversity in organizations Build Global Good Societies from the environmental, economic and social perspectives Continued.. Be wise about instituting changes which benefit only themselves, and avoid selfishness, leading to self defeating scenarios Create a good and just society where everyone shares burdens according to capability and benefits according to contribution Global Good Society - Details Environmental perspective Take care of finite resources Encourage innovation in new material development Invest in research Ensure that environment is not harmed, instead bettered Economic Concentrate on long term sustainability instead of short term profits Social Social responsibilities of business Inclusion and promotion of diversity Culture Management