Chapter TwelveInternational Business and Globalization

Jerry Estenson

Ethical Relativism Revised

• Do not assume that diverse cultures have diverse ethical values

• Principles that are held may not be practiced because of circumstance not abandonment of the principle (bribery)

• The preservation of one’s integrity is necessary because integrity is the very core of one’s self

• Be clear about how ethical is defined (different cultures may have a better view than the West)

International Rights

• Moral minimum - acknowledge the “negative duty” to do no harm

• Moral maximum – the greater the power the more the responsibility to provide positive benefits and support to communities

• Donaldson– United Nations “Universal Declaration of Human

Rights”• DeGeorge– Ten shoulds for multinational corporations

Context of International Business

• Globalization defined “process of international economic integration”

• Free Trade – pursuit of profit within social and economic arrangements that secure free and open competition.– This will

• Allocate resources to their most highly valued use• Distribution in this manner will produce the greatest good

for the greatest number of people• Improve poverty• Reduce conflict between nations

Counter view

• Create a “race to the bottom”– Lowest wages, lowest environmental standards,

lowest health and safety, lowest equal rights and lowest level of self-determination

Does creation of mobile jobs support the poor

• As jobs are exported lower level jobs disappear in one country but appear in another because people will have to choose between economic death or a low paying job

• Reduces people to an economic equation and disregards theoretical benefits such as community

Behavior in other countries

• Use of contract labor as a means of avoiding responsibility

Impact of Trade barriers

• Regulation bars access to markets (tuna, hormones in beef)

Impact of Global Organizations• World Trade Organization• World Bank• International Monetary fund

– Agenda - if you embrace western capitalism then you receive support

• Defense– Regulation seems to increase environmental, worker, and

consumer protection– Thee organization were created by governments in the

countries regulated– These organizations are courts or arbitrators trying to resolve

conflict. This is best done in private rather than in public forms. Remember they are not legislative bodies