Chapter Seven

The Global Environment,

Stakeholder Management,
And Multinational
Corporations

1
 Chapter Topics
1. The connected global economy and
globalization
2. Multinational enterprises as
stakeholders

Copyright © 2003 by South-Western, a division of Thomson

Learning 2
 The Connected Global
Economy And Globalization
 The global economy consists of a dynamic
set of relationships among companies,
financial markets, culture, political
ideologies, government policies, laws,
technologies, and numerous stakeholder
interests.
 Globalization involves the integration of
technology, markets, politics, cultures, labor,
production, and commerce.

Copyright © 2003 by South-Western, a division of Thomson

Learning 3
 Multinational Enterprises As
Stakeholders
 Multinational enterprises (MNEs)
are corporations that “own or
control production or service
facilities outside the country in
which they are based.”
 Common characteristics of MNEs
include:
 Operating in at least two countries
 Earning an estimated 25 to 45 percent
of revenue from foreign markets
Copyright © 2003 by South-Western, a division of Thomson
Learning 4
 Multinational Enterprises As
Stakeholders
 The companies benefit their host
countries by:
 Hire local labor
 Create new jobs
 Co-venture with local entrepreneurs and
companies
 Attract local capital to projects
 Technology transfer
 Provide business skills and learning
 Increase industrial output
 Intensify competition
 Help decrease debt and improve standard of
living
Copyright © 2003 by South-Western, a division of Thomson
Learning 5
 Multinational Enterprises As
Stakeholders
 Six criticisms of the presence and practices
of MNEs in host and other foreign locations
include:
 Dominate and protect their core technology
 Destabilize national sovereignty
 Create a “brain drain”
 Create an imbalance of capital outflows over
inflows
 Disturb local government economic planning
 Destroy, pollute, and endanger host-country
and LDC environments
Copyright © 2003 by South-Western, a division of Thomson
Learning 6
 MNE Guidelines For
Managing Morality
 The following categories have
summaries of guidelines for MNEs:
 Employment practices and policies
 Consumer protection
 Environmental protection
 Political payments and involvement
 Basic human rights and fundamental
freedoms

Copyright © 2003 by South-Western, a division of Thomson

Learning 7
 Stakeholder Management:
Ethical International Decision-
Making Methods
 Numerous international groups that
work with and monitor MNEs
regarding human rights include:
 Amnesty International
 OECD
 International Labor Organization
 NGOs
 Transparency International
 Apparel Industry Partnership
 The Round Table
Copyright © 2003 by South-Western, a division of Thomson
Learning 8
Multinational Companies :
Think Globally Act Locally

9
Chapter Eight

Business Ethics
In The
Twenty-First Century
Copyright © 2003 by South-
Western, a division of Thomson
Learning 10
 Chapter Topics
1. Emerging macro-ethical issues in
the twenty-first century
2. The technology revolution
3. The changing workforce

Copyright © 2003 by South-Western, a division of Thomson

Learning 11
Issue that should be
considered
 Intolerance for ethnic, religious,
and ideological diversity
 Underpaid or Underage Labor

 Testing of cosmetics and drugs

on the animals
 Misuse of technology, data or

illegal downloading
Copyright © 2003 by South-Western, a division of Thomson
Learning 12
 The Technology Revolution
And Ethics
 New technologies present ethical
problems and issues as well as
opportunities.
 Some issues include:
 Privacy
 Individual rights
 Personal safety
 Censorship versus free speech

Copyright © 2003 by South-Western, a division of Thomson

Learning 13
 UNDANG-UNDANG REPUBLIK
INDONESIA NOMOR 11 TAHUN
2008 TENTANG INFORMASI DAN
TRANSAKSI ELEKTRONIK

Copyright © 2003 by South-Western, a division of Thomson

Learning 14
 The Changing Workforce
 The changing nature of the workforce and
related issues affects employers, employees,
and stakeholders.
 The American workforce continues to
experience a paradigm shift between the so-
called old and new economies.
 Areas of interest, concern, and change
include:
 The aging workforce
 Women in the workforce
 Ethnic and cultural diversity in the workforce
 Workers with disabilities
 The education gap in the workforce
Copyright © 2003 by South-Western, a division of Thomson
Learning 15
16
Copyright © 2003 by South-Western, a division of Thomson
Learning 17