MGMT 3035– Business Ethics

Unit 7
Globalization and Emerging Trends

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Learning Objectives
7. Globalization and emerging trends
Assess the influence of organizational culture, values and practices
in multinational settings. Appraise global ethics issues.

7.7.1 Emerging global ethics issues.

7.7.2 Discuss Global Culture, Values and Practices within

Multinationals.

7.7.3 Multinational Companies (MNCs)

7.7.4 The Importance of Ethical Decision making in Global

Business
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Current &
Emerging Global
Business Ethics
Trends/Issues

https://www.youtube.com/watch?v=vNaTv5-2PYU
Global ethics
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Doha Debates: Globalization-2019, Edinburgh-Scotland

https://www.youtube.com/watch?v=EoMN0TCqsQM
1hr-28minutes

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Global Ethic Issues

Global ethics constitutes 9 key areas:
1. Global risks are becoming an increasingly important
ethics issue.
2. Bribery
3. Antitrust Activity
4. Internet Security and Privacy
5. Human rights have been codified in the United Nations
Human Rights Declaration.
6. Health care is a major global human rights issue, with
millions of people dying of preventable diseases each year.
7. Labor and Right to Work
8. Compensation
9. Consumerism
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1. Global risks are becoming an increasingly important
ethics issue.
☛ 1. Corruption continues to be one of the most visible
global and economic risks.

☛ 2. Variations in international regulation can create

problems for global companies as they adjust their
business strategies to comply with different laws.

☛ 3. Supply chain issues involving human rights violations

can be hard to detect in global supply chains
encompassing many different nations.

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2. Bribery
(1 of 2)
☛ The practice of giving relatively large amounts of money to
influence officials to make decisions or take actions that they
otherwise might not take.
☛ Bribery’s acceptance varies by country.
- It can be a challenge to determine what a bribe is.

☛ Most developed countries recognize bribery is not good for

business.
- Companies must determine what constitutes a bribe.

☛ Most countries have laws against bribes.

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Bribery
(2 of 2)

The U.S. Foreign Corrupt
Practices Act prohibits
american companies from
making payments to foreign
officials for the purpose of
obtaining or keeping business.
The U.K. Bribery Act goes further
by holding businesspeople more
accountable for bribery.
It does not have provisions for
facilitation payments.

Small facilitation payments are

allowed to facilitate or expedite
routine governmental
transactions.

☛ Violations of the act can

result in individual fines of
$100,000 and jail time.
Penalties for companies can
reach into the millions.

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3. Anti-trust Activity
Sherman Anti-trust
EU Antitrust Policy A Vertical System
Act (1890)

• Prohibit Antitrust • Developed from the • A vertical system is

activities Articles 101 and 102 where a channel
of the Treaty on the member
Functioning of the (manufacturer,
European Union wholesaler,
(TFEU).  distributor, or
retailer) has control
of the entire
business system, via
ownership,
contract, or through
its purchasing
ability.

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Antitrust Chronicle
https://www.competitionpolicyinternational.com/antitrust-
chronicle-bundling-tying/

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4. Internet Security & Privacy

☛ Serious Internet crimes have resulted in very high public
attention today
- Cyber hacking, Trojan horses, worms and malware
☛ Privacy violations
- Hacking into people’s personal accounts
- Tracking users through their mobile phone apps
- Company’s use of personal information
☛ Personal Information
- Personal information collected by companies such as
Facebook.
- Some countries are debating legislation to limit the amount of
information companies can collect or track.

https://www.youtube.com/watch?v=n8mbzU0X2nQ
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5. Human Rights
☛ Human Rights is the inherent (inborn) dignity and the equal,
unquestionable rights of all humans
☛ Human Rights is the foundation of freedom, justice, and world
peace
☛ It is Codified in the UN Human Rights Declaration
☛ It Is becoming a serious issue for companies due to the health
care issue
Many question if health care is a right or a privilege

☛ Child labor has become a big issue, and many special-interest

groups are boycotting and labeling products found to have
used child labor.

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6. Health Care
Health care is a major global human rights issue, with millions
of people dying of preventable diseases each year.

☛ With MNCs health care availability and affordability for workers

in all nations is becoming a major source of concern.

☛ Pharmaceutical firms believe they should have exclusive rights to

their products so they can charge higher prices to recoup their
investment, others believe this is unethical because people in
developing countries cannot get access to them.

☛ Many businesses have run into ethical trouble over the question
of whether access to health care is a right or a privilege.

☛ Global health care fraud is another serious issue. It harms people

and causes billions in losses annually.
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7. Labor and Right to Work

1. More people than ever work in nations other than their
homeland, and multinationals are larger than ever.

2. One example of a global labor issue involves gender pay

inequality. Women worldwide tend to be paid less than their male
counterparts.

3. Many countries outlaw or limit workers’ rights to join trade

unions.

4. Rights for pregnant workers vary from country to country.

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8. Compensation
☛ Living wage: The minimum wage that workers require to meet
basic needs
- Some MNCs choose to outsource to countries that do not have
a minimum wage.
☛ Executive compensation
- Many executives of bailed-out financial firms face criticism over
their high compensation, which many stakeholders felt was
tantamount to rewarding failure.

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9. Consumerism
Consumerism is the belief that consumers should dictate the
economic structure of society
- Consuming goods at an increasing rate is desirable.
- It makes personal happiness to be the result of purchasing and
consuming products.

☛ Made-to-break (Planned obsolescence): Companies bring

new models at a regular interval and make earlier models
obsolete. This makes consumers to buy more items
☛ Critics of consumerism use the U.S. as an example of non-
sustainable consumption.

☛ It is estimated that the richest countries consume 10 times

more natural resources than the world’s poorest countries.
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https://www.youtube.com/watch?v=AumN_wpabNw

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Global Culture,
Values & Practices

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Global Culture, Values & Practices

https://en.unesco.org/themes/biodiversity/culture-values

☛ Global business is a practice that brings together people from

countries that have different cultures, values, laws, and ethical
standards.

☛ Country cultural values are specific to groups, sects, regions, or

countries that express actions, behavior, and intent.

☛ National culture consists of everything in our surroundings that is

made by people—both tangible items and intangible things such
as concepts and values.

https://www.un.org/en/observances/cultural-diversity-day May 2021

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National Culture

Geert Hofstede identified six cultural dimensions that can

have a profound impact on the business environment.
Exercise : https://comparingculturescasestudytibet.wordpress.com/5-hofstedes-
cultural-dimensions/

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Global Business Ethics – Global Values

Common global values are shared across most cultures. They
are often based on religion and reflected by law

☛ Desirable common global values

- Integrity, family and community unity, equality, honesty, fidelity,
sharing, and unselfishness
☛ Undesirable common values
- Ignorance, pride and egoism, selfish desires, greed, adultery, theft,
deceit, lying, murder, hypocrisy, slander, and addiction

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Global Common Values

Global common values are shared across most cultures.
Although divergent religious values and other aspects of culture
can create ethical issues in international business, many
cultures share desirable and undesirable common values such
as:

☛ Desirable common values: Integrity, family and community

unity, equality, honesty, fidelity, sharing, and unselfishness.

☛ Undesirable common values: Ignorance, pride, egoism,

selfish desires, lust, greed, adultery, theft, deceit, lying,
murder, hypocrisy, slander, and addiction

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https://www.youtube.com/watch?v=BaJnlMYNDvk

Globalization and its effect on

developing countries
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In Class Activity

Topic 7:
Common global values
Student workbook

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Multi-National
Corporations
(MNCs)

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Power of Multi-National Corporations

Multi-national companies (MNCs) are public companies that
operate globally with no significant (real and tangible) ties to
any one nation or region. MNCs …

1. Have the highest level of international business

commitment

2. Usually have a global strategy that focuses on opportunities

around the world

3. Have been the topic of a lot of ethical debate due to their

large size and financial power

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Topic 7- In Class Activity

MINI CASE ANALYSIS: AMAZON ACCUSED OF RETALIATION IN
EMPLOYEE FIRINGS

STUDENT WORKBOOK

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MNCs are subject to ethical criticism

☛ Critics also accuse MNCs of exploiting the labor markets of
host countries.
☛ The activities of MNCs may also raise issues of unfair
competition.
☛ Sometimes, countries refuse outright to allow MNCs into the
country.
☛ Some MNCs strive to be good global citizens with strong
ethical values.
☛ Due to increased stakeholder scrutiny and growing pressures
to be sustainable and socially responsible, many corporations
belong to Business for Social Responsibility, which is a
globally based research system that tracks trends and issues
and provides resources for corporations.
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The Importance
of Ethical
Decision-making
in
Global Business

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Ethical Decision Making in Global Business

☛ Ethical decision making is essential to successfully operating a global
business
☛ Many companies choose to adopt global business codes of ethics to
provide guidelines for its international operations.
☛ MNCs have created special officers or committees to oversee global
compliance issues.
☛ Successful implementation of a global ethics program requires lot of
employee training.
☛ Global firms must customize programs to international markets.

Global ethics is not “one size fits all”

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REVISION QUESTIONS
☛ Identify 5 global ethic issues that are covered in this chapter and
provide real life examples.

☛ Describe the term” Consumerism” and give an example of this.

☛ Hofstedes’ Dimensions of Culture play an important role in

business ethics. Explain 3 of the 6 cultural dimensions. Provide
an example for each dimension.

☛ Distinguish between desirable and undesirable common values.

☛ Explain 4 ethical criticisms, MNCs are subject to.

☛ What is the benefit of ethical decision-making?

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