Globalization and Society

Copyright © 2013 Pearson EducationCopyright © 2013 Pearson Education

CHAPTER 5Globalization and Globalization and

SocietySociety

Copyright © 2013 Pearson Education

AGENDAFoundations of Ethical Behavior

Preconventional, Conventional, PostconventionalTeleological, Utilitarianism, Deotological

Relativism versus Normativıim Ethics and Corporate BriberyGlobal Warming, Kyoto ProtocolEthical Dimensions of Labor ConditionsCode of conduct

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INTRODUCTION• Companies must satisfy stakeholders;

• Shareholders ( Hisse Sahipleri )• Employees ( Çalışanlar )• Customers ( Müşteriler )• Society ( Toplum )

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5-5FOUNDATIONS OF ETHICAL BEHAVIOR


• Teleological approach (Teleolojik)• decisions are based on the consequences of the action

• Utilitarianism (Yararcılık)• an action is right if it produces the greatest amount of

good

• Deontological approach (Deontolojik)• moral judgments are made and moral reasoning

occurs independently of consequences





• Ethical behavior can help a company• develop a competitive advantage• avoid being perceived as irresponsible

5-8WHY DO COMPANIES CARE?


RELATIVISM VERSUS NORMATIVISM • Relativism

• ethical truths depend on the groups holding them• «When in Rome, do as the Romans do»

• Normativism • there are universal standards of behavior that all

cultures should follow

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LEGAL JUSTIFICATION: PRO AND CON• 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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• 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

5-11LEGAL JUSTIFICATION: PRO AND CON


EXTRATERRITORIALITY• Extraterritoriality

• imposing domestic legal and ethical practices on the foreign subsidiaries of companies headquartered in their jurisdictions

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ETHICS AND CORPORATE BRIBERY• Regardless of the reasons for not using the law as a

starting point for ethical behavior, it remains a good starting point

• Countries looking for solutions to common problems take similar legal steps

• Consider• activities that affect the well-being of people• activities that affect the environment

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CORRUPTION AND BRIBERY• Corruption ( Usulsüzlük )

• the misuse of entrusted power for private gain

• Bribes ( Rüşvet )• payments or promises to pay cash or anything of

value• Occurs;

• to obtain government contracts • to get public officials to do what they should be

doing anyway

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Where Bribes Are Business As Usual

5-15CORRUPTION AND BRIBERY


• International accords to stop bribery • OECD Anti-Bribery Convention• ICC code of rules• UN Convention against Corruption

• Regional initiatives include• EU efforts• U.S. Foreign Corrupt Practices Act and Sarbanes-Oxley

legislation

• Industry initiatives include• 2005 World Economic Forum zero tolerance pact

5-16CORRUPTION AND BRIBERY


• Companies compromise the environment • contamination of air, soil, or water during

manufacturing• producing products that emit fossil-fuel contaminants

• Effect of natural resource extraction• renewable versus non-renewable

5-17ETHICS AND THE ENVIRONMENT


WHAT IS SUSTAINABILITY?• Sustainability

• meeting the needs of the present without compromising the ability of future generations to meet their own needs

• Is sustainability good business practice?• YES

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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

• Some countries have adopted stricter requirements• others have not ratified the agreement including

• the U.S., China, India

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• Tiered pricing and other price-related issues• reverse engineering

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

• generic drugs

• R&D and the Bottom Line• India

5-22ETHICAL DILEMMAS AND OTHER BUSINESS PRACTICES


ETHICAL DIMENSIONS OF LABOR CONDITIONS• Labor issues include

• Wages• Child labor• Working conditions• Working hours• Freedom of association

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5-24ETHICAL DIMENSIONS OF LABOR CONDITIONS


• Child labor – ILO estimates 250 million children aged 5–17 years work

• Some companies avoid operating in countries where child labor is common

• or establish responsible policies in those countries - IKEA

• Some companies refuse to hire individuals who want to work long hours

• concerned about exploitation

5-25ETHICAL DIMENSIONS OF LABOR CONDITIONS


CORPORATE CODES OF ETHICS• How should companies behave?

• The UN Global Compact establishes guidelines for appropriate behavior in human rights

• labor• the environment• anti-corruption• https://www.youtube.com/watch?v=x09uTiKzbvI

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MOTIVATIONS FOR CORPORATE RESPONSIBILITY• Unethical and irresponsible behavior could

• result in legal sanctions• 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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CORPORATE ETHICS IN THE FUTURE• Two trends:

• There will be greater convergence of proper ethical conduct

• Individuals will develop skills to address ethical issues

• Impact of social media

• Impact of future business and government leaders

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THANK YOU!