4. Globalisation of ethical decision making

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Questions and Answers

What is a primary ethical challenge when corporations enter foreign markets?

Understanding local economic conditions

Navigating conflicting ethical demands (correct)

Consistent ethical standards across all markets

Maintaining substantial profit margins

Which of the following statements highlights an aspect of ethical relativism in a global business setting?

Capital punishment is accepted in all countries.

Human rights are uniform across all cultures.

All countries value racial diversity equally.

Cultural norms may lead to different ethical expectations. (correct)

How did IKEA's actions in Saudi Arabia exemplify ethical dilemmas in globalization?

It compromised its anti-discrimination stance for local acceptance. (correct)

It maintained its original standards regardless of local customs.

It completely withdrew from the Saudi market.

It promoted gender equality in all its markets.

In terms of human rights, what ethical issue does globalization present for international businesses?

Diverse interpretations of human rights based on local norms Signup and view all the answers

What contradiction of globalization is depicted through the differing views on child labor?

Ethical standards on child labor vary significantly by region. Signup and view all the answers

What impact does culture have on global business ethics?

Cultural values can lead to changes in ethical standards. Signup and view all the answers

Which of the following exemplifies an ethical responsibility of businesses in a global economy?

To adapt to local ethical standards while maintaining core values Signup and view all the answers

What is one of the key implications of globalization on businesses regarding moral values?

Familiar moral values are often challenged in foreign markets. Signup and view all the answers

What is an ethical issue that may arise from globalization?

Cultural influences affecting business operations Signup and view all the answers

What effect does globalization have on regional cultural differences?

It diminishes the importance of regional differences. Signup and view all the answers

Which statement best describes the concept of ethical relativism?

Ethical standards vary based on cultural context. Signup and view all the answers

What role do human rights play in international business ethics?

They define a universal set of standards for all businesses. Signup and view all the answers

How does globalization challenge traditional notions of legal responsibility for companies?

It makes legal frameworks less relevant across borders. Signup and view all the answers

What are thymotic desires as related to ethical business behavior?

The need for acknowledgment, respect, and belonging. Signup and view all the answers

What is a key ethical concern for businesses operating internationally?

Navigating differing legal and ethical standards. Signup and view all the answers

Which of the following best captures the essence of cultural relativism?

Cultural practices can affect perceptions of ethical practices. Signup and view all the answers

What is a consequence of economic transactions becoming detached from specific territorial entities?

Greater demand for advanced business ethics. Signup and view all the answers

How might ethical relativism manifest in a global business context?

By requiring businesses to adapt to local ethical norms. Signup and view all the answers

How should businesses approach ethical frameworks in cross-cultural environments?

By respecting and accommodating diverse cultural values. Signup and view all the answers

Which principle underlies the ethics of rights in the business context?

Entitlement to rights that demand respect from others. Signup and view all the answers

What is a potential ethical responsibility of businesses in the context of globalization?

Addressing human rights issues effectively. Signup and view all the answers

Which of the following ethical issues are most closely related to globalization?

Labor rights and conditions. Signup and view all the answers

What is a significant ethical responsibility of businesses in a global economy?

To engage with local cultures while promoting ethical practices. Signup and view all the answers

What role does globalization play in shaping corporate ethical standards?

It complicates the development of a universal ethical code. Signup and view all the answers

Study Notes

Critical Approach & Business Ethics - Globalization of Ethical Decision Making

Globalization is characterized by increasing economic interdependence, leading to a convergence of values (freedom, equality, etc.).
However, recent trends show a decrease in global trade relative to GDP, due to trade barriers and geopolitical shifts toward regional blocs.
Globalization is not ending, but changing, with a stabilization and slow-down in trends, ongoing FDI and exports.
Developments like on-shoring and energy transitions are creating new interdependencies.
There's a shift from global supply chains to regionalization and diversification.
Competing policy frameworks (productivism vs. geopolitical realism) are in play.

Ethical Considerations in a Globalized World

Cross-cultural ethical issues arise from differing values and principles (e.g., women's equality, bribery, environmental norms).
Businesses must adapt ethical frameworks to diverse values within their wider principles.
Cross-cultural considerations involve ethical relativism (varying standards across cultures) and universalism (universal ethical principles).
Social and political considerations highlight ethical issues in a business's economic, political, and cultural impacts on other cultures and countries.

The End of History? A Changing Landscape

Globalization's underlying assumption was the 'universalization' of Western liberal democracy (Fukuyama).
However, human behavior is often driven by deeper needs like belonging, recognition, and appreciation.

The Ethics of Cross-Cultural Differences

Different cultures prioritize different ethical principles (e.g., women's equality, bribery).
Businesses should adapt to cultural differences in their ethical frameworks while maintaining core values.
Cross-cultural ethical questions involve debates between cultural relativism (ethical standards vary) and universalism (universal principles).
Ethical issues are complex and involve multiple stakeholders and diverse interests.

Ethics of Rights

Human beings have inherent rights (life, freedom, property).
The concept of rights implies a duty from others to respect them.
Rights theories underlie constitutional rights and treaties like the Universal Declaration of Human Rights.

Human Rights: Universalism vs. Relativism

Cultural relativism argues that universal human rights may be biased towards Western values, undermining state sovereignty.
Universalism advocates for inherent human dignity and universal rights protecting individuals from abuse.

Against Cultural Relativism

Many moral values are shared across cultures based on common human needs and interests.
Human beings share common cognitive and perceptual traits.
Ethical violations do not imply cultural acceptance.

Cultural Dimensions

Hofstede's cultural dimensions theory explores cultural variations in power distance, individualism-collectivism, uncertainty avoidance, masculinity-femininity, long-term orientation, and indulgence.
These dimensions help explain different ethical perspectives across cultures.

Gift-Giving & Bribery

Gift-giving in different cultures can be morally ambiguous.
Bribery is ethically unacceptable in most situations, regardless of local customs

Child Labor

Child labor may be a cultural norm in some regions, but in many situations, it is an abuse of power.

Marketing & Local Norms

Businesses should understand local norms and adapt to cultural values when marketing internationally.

Responsibilities: Negative and Positive Duties

Minimalist approach: businesses are only responsible for avoiding causing harm.
Maximalist approach: businesses have a responsibility to provide positive benefits and support to communities.
Both views acknowledge the need for ethical standards across cultures.

The Ruggie Principles

The United Nations Guiding Principles on Business and Human Rights (UNGPs) provide standards for preventing and addressing negative impacts on human rights.
UNGPs promote human rights due diligence that mandates businesses to prevent, mitigate, address or account for their impacts.
Key pillars: state duty to protect, corporate responsibility to respect, access to remedy.

Human Rights Due Diligence (in action)

Legal case illustrations highlight the challenges and complexities of enforcing human rights in the multinational context.
Lack of international legislative power hampers effective enforcement.

The UN Global Compact

The UN Global Compact provides ten principles regarding human rights, labor, the environment, and anti-corruption.
Participation is voluntary.
Companies are expected to report on their progress on the ten principles annually.

Globalization: Shifting Power Balance

Globalization combined with privatization and deregulation promotes a power shift from national governments to multinational corporations.
The race to the bottom leads to tax havens and special economic zones.

Special Economic Zones (SEZs)

SEZs are areas with differing business and trade laws than the rest of the country.
Characteristics often include preferential tax rates, relaxed regulations, reduced labor standards.
Promoters cite effective development tools, while critics highlight land expropriation, poor labor conditions, and revenue losses.

Investments at the Expense of Labor Rights

Ethical considerations of governments may compromise labor standards in a race for foreign direct investment.

Tax Havens

Tax havens are locations with extremely low or non-existent tax rates for non-residents that facilitate off-shoring of revenue by multinational corporations.

The Corporation as a Geopolitical Actor

Corporations are increasingly involved in geopolitical decisions and dynamics.
Corporations face increasing pressure to choose sides in conflicts (politics, military, trade disputes).
Corporations bear increasing responsibility for managing national security risks in supplying goods and services.

Reality Check: Doing Business in Russia

Ethical considerations related to continuing business activity in Russia in face of sanctions.
Minimalist approach or maximalist approach to ethical considerations.

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Description

Explore the complexities of ethical decision-making in the context of globalization. This quiz addresses how cultural differences impact business ethics and the ongoing evolution of global trade. Understand the implications of regionalization and various policy frameworks on ethical considerations.