C H A P T E R - 1 1 G L O B A L I Z AT I O N

AND SOCIETY

Presented By Group-3
Abhishek Verma
Nitin Kumar
Nikita Ranjan
Raj Paul
10-01-2020 Sumeet Agarwal
 INTRODUCTION
• This chapter examines globalization and society from the standpoint of ethics and
social responsibility.
• Companies must satisfy
Shareholders , Employees , Customers , Society
 Shareholders :- Want additional sales and increased productivity
 Employees :- Want safer work places and higher compensation
 Customers :- Want higher quality products at lower prices
 Society :- Want more jobs , increased corporate taxes , more corporate support for
social services.

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FOUNDATIONS OF ETHICAL BEHAVIOR
There are three levels of moral development:-
• Preconventional : Children learn what’ right and wrong, but may not understand why their behaviors
are right or wrong
• Conventional: Role-conformity is learned from peers and societal laws
• Postconventinal , autonomous, principled: People internalize moral behaviour.

There are some approaches:-

• Teleological Approach:- Decisions are based on the consequences of the action.
• Deontological approach:- moral judgments are made and moral reasoning happens independently of
consequences.

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RELATIVISM VERSUS NORMATIVISM
Does Ethical behaviour vary by country, or are there uniform values
that everyone should share?

Relativism : ethical truths depend on the values of a particular society and

may vary from one society or country to another.
“When in Rome, Do as the Romans Do”
Normativism :there are universal standards of behavior that all cultures
should follow.

Walking the fine line between relativism and normativism

Managers should exhibit “ordinary decency”- the principles of honesty

and fairness
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LEGAL JUSTIFICATION: PROS AND CONS

PROS
Legal justification is appropriate because
• The law embodies many of a country’s moral principles
• The law provides a clearly defined set of rules
• The law contains enforceable rules that apply to everyone
• The law reflects careful and wide-ranging discussions

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LEGAL JUSTIFICATION: PROS AND CONS
CONS
The law is inadequate because
• Some things that are unethical are not illegal
• Laws are slow to develop in emerging areas of concern
• Laws may be based on imprecisely defined moral concepts
• The law often needs to undergo scrutiny by the courts
• The law is not very efficient

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 EXTRATERRITORIALITY
Imposing domestic legal and ethical practices on the foreign subsidiaries of companies
headquartered in their jurisdictions. In addition , strong home-country governments may
adopt a practice known as Extraterritoriality.

CORRUPTION AND BRIBERY

 Corruption
• The misuse of entrusted power for private gain
 Bribes
• Giving & receiving an unearned reward to influence someone’s behaviour
• Occurs;
• to obtain government contracts
• to get public officials doing anyway

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THE CONSEQUENCES OF CORRUPTION
 It affects both company performance and country economies.
 It erodes the authority of governments that condone it.
 Corruption is expensive.
 International accords to stop bribery
• OECD (Organization for Economic Cooperation and
Development) Anti-Bribery Convention
• UNCAC (United Nation Convention against Corruption)

 National Initiative :
• U.S. Foreign Corrupt Practices Act

 Industry initiatives include

• 2005 World Economic Forum zero tolerance pact against bribery
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GLOBAL WARMING, KYOTO PROTOCOL
• Kyoto Protocol (1997)Signed to require countries to cut
greenhouse gas emissions to 5.2% below 1990 levels between
2008 and 2012.

• The protocol had been ratified by 192 nations and regional

economic organizations.

• Some countries have adopted stricter requirements such as

Germany, France & Japan.

• Others have not ratified the agreement including U.S., China,

India

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National and Regional Initiatives
• Firms operating in different countries that have adopted the Kyoto Protocol are in
under pressure to take several action to reduce emission.
• The European union has set a target of an 8 percent reduction of GHG from 1990
levels.
• German have gone one step further, setting a target of 21 percent (based on the
assumption that they had be able to close down coal- fired power plants still
operating in the former east Germany).

Company-specific initiatives examples

• Between 2000 and 2005, GM took part in voluntary emission-reduction program and
achieved 10% reduction in north American plant emissions.
• Dupont has cut emissions by 65% since 1990.
• Alcoa exceeds its 2010 goal of a 25% reduction of 1990 levels by some 11 percent.
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 ETHICAL DILEMMAS AND OTHER BUSINESS PRACTICES

 Tiered pricing and other price-related issues –

Tiered pricing means that consumer in developed countries pay higher prices and those in developing

countries.

 WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)-

• It allows poor countries to counter the high cost of patent drugs by doing either of two things:
• Producing generic product for local consumption .
• Importing generic produts from other countires ( if they don’t have capacity to produce them).

 R&D and the Bottom Line :

Drugs are very expensive to develop, and much more so in a high income countries. The cost of
developing a new drug can be closed to $1 Billion in the United States but as little as $ 100 Million in
India . In addition it can take as much as 15 years to take a product from the start of R & D through the
approval process to the consumer.

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ETHICAL DILEMMAS OF LABOR CONDITIONS

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 ETHICAL DIMENSIONS OF LABOR CONDITIONS
Labor issues are as follows :-
• Wages
• Child labor
• Working conditions
• Working hours
• Freedom of association

The Problem of Child Labor

• Children are better suited than adults to perform certain task.

• Children in India often put to work because parents don’t earn enough to support
families; If parents can’t pay off debt , their children are often indentured to
creditors.
• Some companies avoid operating in countries where child labor is employed ,
whereas others try to establish responsible policies in those same countries.
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 MOTIVATIONS FOR CORPORATE RESPONSIBILITY
 Unethical and irresponsible behavior could

• Result in legal headaches

• Result in consumer boycotts
• Lower employee morale
• Cost sales because of bad publicity

 A code of conduct

• Sets global policy that must be complied with

• Communicates the code to employees, suppliers, and subcontractors
• Ensures that policies are carried out
• Reports results to external stakeholders

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