globalization with social responsibility

7/29/2019 Globalization With Social Responsibility

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during the past 55 years, technological improvements intransportation, communication and information processing and theInternet have made big contributions to the development ofcountries. To manage this trend fairly, it is recommendable to createuniversal ethical norms, rules and regulations.


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In recent years, owing to the globalization of marketsand production processes, an ever increasing numberof marketers and entrepreneur and business managerhave to deal with ethics and social responsibility issuesin cross-cultural settings. It is assumed that localconditions of markets may be different, but some

global markets, ethics and social responsibilityprinciples should be applicable to all markets. It isproposed that a uniform code of ethics and socialresponsibility should be created by WTO and UNorganizations to solve diverse cultural differences toarrive at cooperative strategies in markets.


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Social responsibility affects people on so many different levels. Inpublicly owned corporations, boards of directors dictate overallobjectives to executives, which run the day-to-day business. Itsimportant for stockholders, who own pieces of these companies, toknow that these executives are running the company in an honestand ethical way. They want to know that said individuals are makingthe best possible choices on their behalf and not on their own

personal agendas. Also, from a consumer point of view, consumerswant to know that companies really care about them and providingfor their needs, not just making a profit. Further, asthese companies pay more attention to social responsibility, theytake into consideration production and operations. They considerthe effects of their work on the environment and how they canprovide more socially responsible means of developing anddistributing products. Social responsibility benefits everyone allaround.

Social responsibility is an important area of business for allindividuals within an organization and the organization itself.Further, it carries over to the public. Without this principle, morecorruption would find its way into the business realm. Companiesshould seek to promote social responsibility in every way possible.


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The problem of business ethics is infinitely more complexin international marketplace, because value judgmentsdiffer widely among culturally diverse groups. That whichis commonly accepted as right on one country may becompletely unacceptable in another.

Giving business gifts of high value, for example, isgenerally condemned in the United States, but in manycountries of the world gifts are not only accepted but alsoexpected. Upon examination of existing ethicalframeworks in the field of international marketing from amacro marketing perspective, it is argued that marketerscannot always rely on universally accepted ethical norms,such as hyper norms or core values that have beensuggested by a deluge of marketing literature.


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Major International Marketing EthicalProblems can be :-

Traditional Small Scale Bribery- involves thepayment of small sums of money, typically to

a foreign official in exchange for him/herviolating some official duty or responsibilityor to speed routine government actions.

Large Scale Bribery- a relatively largepayment intended to allow a violation of thelaw or designed to influence policy directly orindirectly (eg, political contribution).


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Gifts/Favors/Entertainment- includes a range ofitems such as: lavish physical gifts, call girls,opportunities for personal travel at the company`sexpense, gifts received after the completion oftransaction and other extravagant expensiveentertainment.

Pricing includes unfair differential pricing,questionable invoicing where the buyer requests awritten invoice showing a price other than the actualprice paid, pricing to force out local competition,dumping products at prices well below that in the

home country, pricing practices that are illegal in thehome country but legal in host country (eg, pricefixing agreements).


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Illegal/Immoral Activities in the Host Country practices such as: polluting the environment,maintaining unsafe working conditions;product/technology copying where protection ofpatents, trademarks or copyrights has not been

enforced and short weighting overseasshipments so as to charge a country a phantomweight.

Questionable Commissions to ChannelMembers unreasonably large commissions offees paid to channel members, such as salesagents, middlemen, consultants, dealers andimporters.


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Cultural Differences between cultures involvingpotential misunderstandings related to the traditionalrequirements of the exchange process (e.g.,transactions) may be regarded by one culture asbribes but be acceptable business practices inanother culture. These practices include: gifts,monetary payments, favors, entertainment andpolitical contributions.

Involvement in Political Affairs- related to thecombination of marketing activities and politicsincluding the following: the exertion of political

influence by multinationals, engaging in marketingactivities when either home or host countries are atwar or illegal technology transfers.


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international ethical problems can be solved by:- a. Do not direct intentional harm. b. Respect the rights of employees and of all

others affected by one`s actions or policies.

c. To the extent consistent with ethical norms,respect the local culture and work with and notagainst it.

e. Multinationals should pay their fair share oftaxes and cooperate with the local governmentsin developing equitable laws and other background institutions.


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P&G :Thanks to P&G Hope Schools, a programin partnership with the China YouthDevelopment Foundation, children now havebetter access to education in poverty-stricken

rural areas of China. P&G Hope Schools havebenefited over 150,000 children across Chinain the last 15 years, and over 5,000 P&GChina employees have actively supported itsprogram activities.


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NOKIA:-Electronic products such as cell phonesimpact the environment both during productionand after their useful life when they are discardedand turned into electronic waste. Nokia is listedin Greenpaces Guide to Greener Electronics thatscores leading electronics manufacturersaccording to their policies on sustainability,climate and energy and how green their productsare. In November 2011 Nokia ranked 3rd out of

15 listed electronics companies, falling twoplaces due to its weaker performance on theEnergy criteria and scoring.


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Nestle - One of the largest food manufacturers in theworld, in 2009 Nestle instituted "The Cocoa Plan" in aneffort to encourage sustainability, labor rights and fairtrade in the cocoa industry. The Cocoa Plan is Nestls wayof helping to tackle key issues facing cocoa farmers, theirfamilies and communities in order to create a better future

for cocoa farming. It covers all aspects of a cocoa beansjourney, starting with farmers and ending with you, theconsumer. Their vision is to help cocoa farmers runprofitable farms, respect the environment, have a goodquality of life and for their children to benefit from aneducation and see cocoa farming as a respectableprofession.


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marketing a product in Brazil may require a differentapproach than marketing the product in Australia orMalaysia. Managing U.S. Workers might require differentskills than managing Japanese workers; maintaining closerelations with a particular level of government may be veryimportant in The Republic of China and irrelevant in

Germany. As a global firm, sometimes, it is impossible toadvertise a standardized advertising message in differentcountries. Because of differences in cultural and and legalenvironments, for instance, it is illegal to use anycomparative advertising in Germany. Advertising ontelevision is strictly controlled in many countries, e.g., inKuwait, the government controlled TV network allows only32 minutes of advertising per day, in the evening.


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In order to compete in the internationalenvironment, firms can use four basic entrystrategies:

an international strategy,

a multi-domestic strategy,

a global strategy,

transnational strategy.


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Firms pursuing an international strategytransfer the skills and products derived fromdistinctive competencies to foreign markets,while undertaking some limited local

customization. Firms pursuing a multi-domestic strategy

customize their product offering, marketingstrategy, and business strategy to nationalconditions.


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Firms pursuing a global strategy focus onreaping the cost reductions that come fromexperience curve effects and location economies.

Finally, firms pursuing a transnational strategy

involve a simultaneous focus on reducing costs,transferring skills and products, and boostinglocal responsiveness. Implementing this strategyis very difficult because of simultaneous

pressures coming from cost reductions and localresponsiveness.


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International Monetary Fund (IMF) asserts that asglobalization has progressed, living conditionshave improved significantly in virtually allcountries. However, the strongest gains havebeen made by the advanced countries and only

some of developing countries. That the incomegap between high-income and low-incomecountries has grown wider is a matter forconcern. And the number of the world`s citizensin abject poverty is deeply disturbing. But it is

wrong to jump to the conclusion thatglobalization has caused the divergence, or thatnothing can be done to improve the situation.


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As more money is poured in to developing countries, thereis a greater chance for the people in those countries toeconomically succeed and increase their standard of living.

Global competition encourages creativity and innovationand keeps prices for commodities/services in check.

Developing countries are able to reap the benefits of

current technology without undergoing many of thegrowing pains associated with development of thesetechnologies.

Governments are able to better work together towardscommon goals now that there is an advantage incooperation, an improved ability to interact and

coordinate, and a global awareness of issues. There is a greater access to foreign culture in the form of

movies, music, food, clothing, and more. In short, theworld has more choices.


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Outsourcing, while it provides jobs to a population in onecountry, takes away those jobs from another country, leavingmany without opportunities.

Although different cultures from around the world are able tointeract, they begin to meld, and the contours and individualityof each begin to fade.

There may be a greater chance of disease spreading worldwide,as well as invasive species that could prove devastating in non-native ecosystems.

There is little international regulation, an unfortunate fact thatcould have dire consequences for the safety of people and theenvironment.

Large Western-driven organizations such as the International

Monetary Fund and the World Bank make it easy for a developingcountry to obtain a loan. However, a Western-focus is oftenapplied to a non-Western situation, resulting in failed progress.


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There is a heated debate about the true effects ofglobalization and if it really is such a good thing. Good orbad, though, there isn't much argument as to whether ornot it is happening. It is accepted that globalization is anunavoidable process and will progress forever. Allbusiness that firms desire to compete successfully in

international environment, should obey to legal and ethicalrules and regulations. To behave in an ethically andsocially responsible way should be a hallmark of everymarketer`s behavior, domestic or international. It requireslittle thought for most of us to know the sociallyresponsible or ethically correct response to questionsabout breaking the law, destroying the environment,denying someone his or her rights, taking unfairadvantage, or behaving in a manner that would bringbodily harm or damage.


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globalization with social responsibility

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