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    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.

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    GLOBAL ETHICAL ISSUES UNIT 3

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    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.

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    © All Rights Reserved
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    30 views15 pages

    Global Ethical Issues Unit 3

    Uploaded by

    aditi anand
    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.

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    of 15

    Corporate Governance &

    Business Ethics
    Globalization

    Globalization describes an ongoing


    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

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