OBJECTIVES:

At the end of the lesson, students

are expected to:
a. Evaluate the major economic
impacts of Multinational
 Enterprises on home and host
countries
b. Establish the foundations for
responsible behavior
c. Discuss some key issues in
globalization and society.
 THREE MAJOR
CRITICISMS OF
GLOBALIZATION:
1. Threats to sovereignty
2. Growth
3. Increasing inequalities
Multinational Enterprises
(MNEs)
- are companies that operate in
multiple countries.
- do business internationally,
selling products or services in
different markets and often
have significant impact on the
global economy.
Examples: Coca-Cola, Apple
and Toyota.
IMPACTS OF MNEs ON HOME
AND HOST COUNTRIES
- Balance-of-Payments Effects
- Growth and Employment
Effects
FOUNDATIONS OF
ETHICAL BEHAVIOR
CULTURAL FOUNDATIONS
- Many actions elicit universal
agreement on what is right or
wrong, but other situations
are less clear.
- Values differ from country to
country and sometimes
 between employees and
companies.
RELATIVISM
- Ethical truths depend on
groups holding them.
NORMATIVISM
 - Standards of behavior that all
cultures should follow.
Companies face pressures to
comply with a country’s norm.
Managers need to:
- exhibit “ordinary decency”
- create good competitive
advantages
LEGAL FOUNDATIONS
- The ethical dilemmas entail
balancing means and ends.
Means are the actions we take;
 Ends are the result of the
actions.
Legal Justification for ethical
behavior is the only important
one. By this standard, a person or
company can do anything that is
not illegal.
Five Reasons why legal argument
is insufficient:
1. The law is not appropriate for
regulating all business activity
2. The law is slow to develop in
emerging areas of concern.
3. The law is often based on
moral concepts that are not
precisely defined.
4. The law is often in need of
testing by the courts.
5. The law is not very efficient.
In spite of the pitfalls of using the
law as major basis for deciding
ethical disputes. There also are
good reasons:
1. The law embodies many of a
country’s moral beliefs and is
an adequate guide for proper
conduct.
2. The law provides clearly
defined set of rules.
3. The law has enforceable rules
that all must follow.
4. The law represents a
consensus derived from
significant experience and
deliberation.

KEY ISSUES IN
GLOBALIZATION AND
SOCIETY
BRIBERY
- Influences the performance of
countries and companies.
- Payments or promises to give in
anything of value.
- Bribery of public officials takes
place to obtain government
contracts or to get officials to do
what they should be doing.

ENVIRONMENTAL ISSUES
- Companies that extract natural
resources, generate air or water
waste, or manufacture products,
such as autos that are polluters
need to be concerned with their
environmental impact.
- Sustainability mean meeting the
needs of the present without
compromising the ability of
future generations to meet their
own needs, while taking into
 account what is best for people
and the environment.

LABOR CONDITIONS
- Major labor issues are
purchasing to independent
manufacturers in developing
countries, wages, child labor,
working conditions, working
hours, and freedom of
association.