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Business ethics and social responsibilities of international firms
Four basic aspects of globalization
Business ethics and social responsibilities of international firms
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Introduction
According to Al-Emadi & Al-Asmakh (2006), global marketing ethical issues and social responsibility influence one another. They expound by indicating that when firms expand to international markets, diverse problems are experienced especially in regard to ethical and social aspects. Mishra & Suar (2010) define the wave of globalization which is enticing firms to take their businesses international. Although the process has been going on for a significant period but has now there is chance to increase market share.
The dilemma of moving into an international market is grounded on the dimensions of political, economical and even cultural differences. There are diverse dimensions of globalization (Al-Emadi & Al-Asmakh, 2006; Mishra & Suar, 2010). Although it can receive diverse interpretations, the key dimensions and thematic categories of factors influencing effectiveness such as economics, politics, sociology, anthropology, communication, geography and psychology. In this paper, focus is turned to the social dimension.
Al-Emadi & Al-Asmakh (2006) and Mishra & Suar (2010) are of the opinion that what is considered normal in one country may be in conflict with another. Consequently, there is diversity and complexity in decision making when expanding to foreign territories. Companies such as XYZ Construction Incorporation which wants to expand to Asian countries will have tough decisions to make. In this paper, a critical review of ethical and social issues that XYZ will have to contend with when expanding to Asia.
Social and ethical issues to be considered
A plethora of studies have been presented to describe the issues concerned with social ethics in regard to internationalization of business activities. For instance, Lee (2009) indicates that corporate social responsibility (CSR) has increasingly become very concept in many organizations with national or international scope. However, Asia is a region that is huge and assuming that XYZ is focusing on multiple countries as a base of its business expansion, then the complexity of the social ethical conditions become even more complex. Lee (2009) and Steenkamp (2001) posit that some of the most common social and ethical considerations that should be considered by an expanding organization are: human rights, environmental regulations, employment practices and corruption.
Employment issues
Al-Emadi & Al-Asmakh (2006) argue that in some nations, ethical issues may be associated with employment practices. Amaeshi, Osuji & Nnodim (2008) exemplifies by indicating one of the notable companies that set base in Asia and which was faced with ethical dilemma in respect to employment practices was Levi Straus.
must understand the social issues that may have a negative impact on their company. They have a social responsibility regardless of the country that they are in. According to our textbook, Executive Concepts in Business Strategy (2011), “Social responsibility is the obligation an organization (profit-seeking or nonprofit) has to be ethical, responsible, and responsive to the needs of the members in the organization as well as the larger society.” (p. 545) Remember that your period goes after the in-text citation. To support this, Friedman’s doctrine (1970) bout “social responsibilities of business” is that “A corporation is an artificial person and in this sense may have artificial responsibilities, but “business” as a whole cannot be said to have responsibilities, even in this vague sense….the social responsibility of business is to ask precisely what it implies for whom.” (p. 2). All direct quotes >40 words need to be placed in a block quotation. XYZ should have a positive impact on the country by using environmentally safe materials along with not violating any laws by applying for permits and licenses in a timely
Business ethics simply can be defined as the application of business values in the business practice of a company (Seawell 2010, p. 2). For a multinational company, business ethics is one of the critical aspects need to be taken into account in business decision-making processes. Failure to give attention on ethics may bring consequences on company’s reputation (Meyer & Jebe 2010, p. 159). The company is expected not only to pursue its own profits but also contributing to the environmental and social welfare of the community where it operates (Svensson & Wood 2008, p. 308).
In conclusion, companies that seek to integrate into global markets usually encounter several problems because of the effect of globalization on business practices. The challenges originating from such integration is attributed to the differences in cultures in various societies across the globe. As evident in Google’s dilemma in China, there is no single set of universal ethics that are applicable to all settings and societies across the globe. Companies such as Google need to develop varying ethical standards that are relevant and appropriate to various nations and cultures in the world. This would enable the companies that are integrating into global markets to avoid ethical issues while maintaining effective business practices.
Nowadays, corporate social responsibility (CSR) becomes an integral part of each company. CSR can be understood as a management concept and a process that links social and environmental issues in business operations to a company’s interactions with it’s stakeholders. CSR not only gives the company a chance to help society but also enhances company’s reputation and investors’ attractiveness. In this paper, we will show a brief description about CSR and effects of CSR on international business, including pros and cons when a company applies the CSR program. Besides that, I give my ideas on conflicts of interest beween shareholders and the company’s managers. And then, advantages and difficulties for companies implementing CSR in Vietnam will be defined. Although CSR was first introduced widely in Vietnam many years, it is still a new concept. Therefore, pioneers in this area are facing lots of challenges in running CSR programs in Vietnam.
Globalization Phase, companies were known locally, regionally and internationally, their products were already improved offering innovative services. However, as The Economist (2007) has highlighted, while more global the companies are more aware of corporate social responsibility they need to be, namely, foreign stakeholders will expect, not only innovative and effective products, but also they will open their doors and invest their money to companies that are social responsible.
There are a number of issues that affect international business ethics. They include employment practices, human rights, environmental regulations, corruption, and moral obligation of multinational companies. Employment practice refers to the working conditions an employee must work under. This can be very difficult to gauge, because many times the working conditions of a host nation are inferior to those in an organizations home nation. Many organizations have had to fight with these regulations. A good example of this in the trouble Nike found themselves in during the 1990s. There were a number of news reports released about the working conditions of most of its subcontractors were very poor . The Nike Company was not breaking any laws but it did bring into question the ethics of using a sweatshop. After this incident it left a number of questions for the international marketplace. In recent years many companies have cut ties with organizations that use unsafe and unfair labor practice.
This article reviews the ethic and social responsibilities of multinational companies and offers a strategic approach for future interaction with other cultures. Not much has been researched or recorded about how multinational managers handle ethical and social responsibilities. The article defines corporate social responsibility as “the firm’s obligation to respond to the externalities created by market action” (Husted & Allen, 2006, p. 839) with externalities further defined as being the reaction to a corporate action. There has not been a theory to distinguish local from global corporate social responsibility and previous discussions regarding ethics or social responsibility centered on social contracts or universal principles. Studies show that there is a difference between universal principles and local norms. Environmental protection and human rights fall into the global social responsibility. By contrast local responsibility is based on needs and circumstances happening locally. Local needs can be the same as global needs such as fighting AIDS or unemployment in South Africa. However, multinational that are not affiliated with South Africa have little incentive to contribute toward South African AIDS and cannot actively affect the unemployment which are local social responsibilities but might fund a global AIDS awareness campaign which is a global social responsibility. Once a firm defines the local needs they must devise a strategy to manage it.
The term “Marketing ethics” has been defined as how moral standards of right and fair practices are implemented into organization and strategy (Murphy et al., 2005). In fact, marketing and ethics are usually seemed as a contradiction, because the purpose of marketing is monetary-oriented. The ultimate goal for business is making profit or generating sales, while ethics is moral and societal, such as contributing to the society. Introcaso et al (1998) quotes Michael Novak’s (1998) words that business might fail in the short term if introducing ethical model in competition, because high moral standards increase costs. Consequently, numerous companies launch misleading advertising, manufacture unsafe products, exploit labour right and waste natural resource for self-interest. They have indirectly deceived vulnerable consumers and sacrificed minority group.
review the ethical question always open to critic, but an ethical marketing research is one most disregard and surfacely research area of the discipline. The objective of cross-cultural study research it is because different county will have different culture and different understanding of ethical, for instance some action one country may think ethical and another country may think as unethical. Those different attitudes will impact the marketing researchers. Since the researcher ask two-country group of student to take the self-administered questionnaires of 17 scenarios to find the differences of marketing research ethical attitudes between the 149 of USA respondent and 151 Turkey
Ethics refer to a set of values that are applied to the moral decisions and implications that emerge in the business environment. Consequently, these implications are considered to be important for internal, external stakeholders, and the natural environment. Thus, every business is required to abide by a code of ethics, which governs the behaviour and actions of an organization. Alongside with ethics, globalization is a process that enforces integration and interaction among a wide range of individuals and organizations, on an international level. Moreover, the utilization of ethics and globalization is regarded to be quite significant, specifically while devising marketing strategies; as applying such concepts to one’s business can give it
Globalization remains a pivotal topic in many schools of thought, and continues being a topic of controversy even in local economies today. Perhaps the reason for this is integration and competitiveness the world over. Conceivably, even more than integration, is the competitiveness of organizations, has possibly facilitating the fascination and misconception about of globalization. Nevertheless, globalization has brought about a number of effects influencing the design and geographical location of the organization. However, globalization has effectively placed the world in a bubble, or maybe one could equate the changes to being placed in an envelope.
A company has an economic obligation. It must earn a favorable return for its stockholders in the restrictions of the law. But, corporate social responsibility means that organizations have also ethical and societal responsibilities that go past their economic responsibilities. CSR needs organizations to develop their documentations of their responsibilities to include other stakeholders such as workers, customers, suppliers, local societies, state governments, international organizations, etc. Ethics could be seen as a fundamental component of individual and group activities at the heart of organizations’ errands.
In today’s continuously changing world, many experts say that globalization is what every business, organization, and nation should seek and welcome as a positive change. However, many people are unaware of the main focus and meaning of Globalization, especially in comparison to Localization. A large number of people believe that globalization is just another common word used to refer to changes and differences that cannot be explained or accounted for. Therefore, many different activities or changes are improperly labeled to be a part of or caused by globalization.
Combining these points, the globalized society presents enormous opportunity for businesses. Intercultural marketplaces allow for differing demographics, larger market potential, a more diverse customer base (and therefore more diverse product offering), and a highly valuable human resource potential. On the other end of the bargain, managers are tasked with localizing products and services effectively in a way that minimizes the adverse cultural and environmental effects caused by this rapid global expansion to maintain an ethical operation.
Globalization’s history is extremely diversified and began during the beginning of civilization. Now we live in a world that is constantly evolving, demanding people to use resources in locations that are very difficult to obtain certain resources. This could make it completely impossible to operate in these specific parts of the world. However, globalization allows people across the world to acquire much needed resources. Globalization creates the opportunity for businesses to take advantage and exploit the ability to take part of their business to a different country. Nevertheless, globalization is part of today’s society and will be involved in virtually all situations.