GLOBALIZATION AND ITS ETHICAL CHALLENGES

Introduction

We believe the global ethics emanates from the Individual to the

family, the society, community, country and the world. All the transactional
events like business are a part of the total concept of global ethics. By
self-control and by making right conduct your main focus, treat others as
you treat yourself. This thought is reflected again in Bible Luke 6:31 “Do
for other people everything you want them to do for you. Treat others
the same way you want them to treat you”.

In this module contains the core of Globalization and its ethical

challenges. This will be an avenue for understanding this significant part in
the course of the study. Aspirants of research may learn and or acquire
the following competencies:

 Define what globalization is;

 Identify the different ethical issues brought about by globalization;
 Explain and understand the three main reasons why ethics has to play
a key role in business.

Discussion: Challenges of ethics in a Globalized World

 Globalization is a process in which cross-borders trade and finance are

integrating world economies into an international system.

 The advancement of technology dissolved international boundaries and opened

the cultures to a whole new arena, enabling globalization of businesses.
Globalization, ushered in during the decade of 1990s, is an empowering entity. It
interconnects the world, supports economic development, provides information
availability and has been a catalyst in emergence of a „Global Village‟ spelt out
by our ancient sages.

 Globalization brought in new ideas about the business and also ethics with the
widening of the consumers and the supply chain. But globalization brings forth a
multiplicity of new queries for the management, for which it had to provide an
ethical response. Although businesses increasingly are becoming global,
businessmen began to realise that it was certainly not more uniform across the
markets.
Global ethics as a foundation for businesses in their world-wide operations
began to emerge. However, the case “how to transact ethically?” is not as
clear, as it is desired, when various cultures and different levels of
economic development of countries are being experienced with.

Globalization as we see has brought in many ethical issues like:

Exploitation of workers
Outsourced from countries which have no strong labour laws and also
indulge in unhealthy labour practices including child labour
Exploitation of Tax Loopholes
Indulging in unethical financial processes
Dumping toxins
Unnecessary medical procedures

In view of this, defining global ethics does become a challenge as this aspect has
to be dealt considering various aspects like:

1. Technological Imbalances
 Scientific and technological progress is probably the phenomenon that is
most decisively shaping our age. But together with the enormous
opportunities of this scientific and technological revolution that we are
experiencing, a large number of new and difficult ethical questions are
emerging. As stated by Elvin Stakman‟s famous maxim: “Science cannot
wait until ethics catches up with it, and nobody should expect scientists to
think of everything for everybody.” This however is not totally valid. We
need a more constructive approach, along the lines of that of Heinz
Pagels: “Science cannot resolve moral conflicts but it can help to better
formulate the debates on conflicts.”

 Technology has contributed to the rise in inequality, but there are also
some significant ways in which technology could reduce this inequality.

2. Cultural differentiations existing in different countries

 Due to the unprecedented access to cultures, a much wider audience than
ever before has a gateway to see, hear and experience phenomena that
were never accessible earlier. Misrepresentation, stereotyping and the risk
of loss of cultural and intellectual property rights are the consequences of
unmonitored access.
 There are a number of negative impacts globalization has had on cultural
diversity, including the influence multinational corporations have on
promoting a consumer culture, exploitation of workers and markets and
influencing societal values. This increased availability of commercial
media and products can "drown out" local cultural influences. It is also that
an e-learning technology perpetuates colonization by designing curriculum
that is based on the dominant culture. Not having access to technologies
that are present in the classroom, combined with an education system
 geared toward the dominant society can be a lethal combination for non-
dominant cultures. The present education, legal and power structures
reflect western ideas and philosophies.
 Loss of individualism and group identity occur when globalization
encourages a 'Western ideal of individualism'. We have seen many
instances of the negative influences on culture in our country also.
 But, this also has a positive side. Technology provides a medium where
depiction of images and thoughts can provide the means in which truism
can be established. Global media centres allow cultures a distinctive voice
to promote awareness and provide public knowledge and understanding
of their stories and identities. It also allows for the communication on
issues that are important in preserving the culture and knowledge
acquisition of cultural ways - allowing them to retain their diversity.
Technology can be used to preserve language, customs and culture.
Technology allows for self-representation and preservation of personal
and collective identity by providing autonomy and empowerment

3. Socio-economic considerations – Ethics to assist the community

 Be reminded of the famous „Parable of the Sadhu‟ which received the

Harvard Business Review‟s Ethics Prize in 1983. Mr. Bowen McCoy,
Managing Director of the Morgan Stanley Company, relates his
experience in the distant mountain of Nepal to the short and long-term
goals of American business.
 Here the trekkers were left with unexpected ethical dilemma left them
questioning their values--and the values of business, which often places
goal achievement ahead of other considerations such issues on poverty.
 Prof. Peter Albert David Singer, an Australian moral philosopher and
Professor of Bioethics at Princeton University, and the University of
Melbourne, presents a brilliant survey of the ethical problems of
globalization and focuses on ethical issues concerning the reduction of
extreme poverty. He examines the reasons why developed countries and
their people should contribute more for this purpose and argues that the
elimination of poverty is a common benefit in which ethical requirements
and the interests of the people of the developed countries converge. But in
reality is this happening? We are seeing ideas of environmental pollution
which would hinder progress in the developing countries being thrust on
them by the developed world.

We see a very clear divide between the developed and developing

countries. As we notice, this calls for proper policies to be put in place
poverty alleviation initiatives, keeping pace with the technical paradigms.

 If it is in our power to prevent something any adverse happening, without

sacrificing anything of comparable moral significance, we ought to do it.
This action seems non-controversial.
4. Education Standards

 Migration plays a very important role in the global society. Due to

increasing poverty in the developing countries and lack of opportunities,
the migration of educated people to developed countries has seen an
increase. There are various opportunities provided by the developed
countries, which at times tend to be dangerous as well.

 While education standards have gone up in the developing countries, to fill

the gaps in the developed world, the expenditure on providing higher
education means higher allocation of funds in the developing country.
Governments of developing countries need to take up this as a challenge
and come out with strategies like Make in India to retain talent.

 There is also a positive side to this. We have seen many

American/European universities coming to India to establish collaborative
institutions.

5. Religious Beliefs

 Globalization has now brought in a culture of pluralism, meaning religions

“with overlapping but distinctive ethics and interests” interact with one
another. Essentially, most of the world‟s leading religious traditions—teach
values such as human dignity, equality, freedom, peace, and solidarity.
Therefore, through such religious values, globalization engenders greater
religious tolerance in such areas as politics, economics, and society.

 Today, secularism and multiculturalism are converging. Putting somewhat

less enigmatically, the issues about the proper regime are becoming and
more and more interwoven with issues about the proper ways to deal with
the growing diversity of these societies. The main point of a secularist
regime is to manage the religious and metaphysical philosophical diversity
of views fairly and democratically. This is a tough issue in developing
countries where religion plays a very important role in the societal thinking.
Despite these advantages, the resistance to the new paradigms in
developing countries pose challenges, especially where religion has an
overpowering influence on the society. There is also a fear that
globalisation undermines the concept of nationalism, with dominant
migrant population.

6. Business considerations – Strategic Planning

 Business is primarily a form of social cooperation— it is about people from

various societies working together to create value that no one of us could
 create on our own. It is about creating chairs that allow the body to rest,
vehicles and networks that enable us to travel and communicate over
great distances, a range of products and services as broad as the human
imagination. Keeping sustainability in mind, the Companies need to limit
its strategic initiatives to those meeting needs of consumers without
depleting resources needed by future generations. The view that “the
business of business is business, not ethics” is no longer acceptable. The
companies need to change to a culture that places profits and good
performance ahead of ethical behaviour. It is ethically dangerous for
company personnel to assume that local ethical standards are an
adequate guide to ethical behaviour globally.

 Right or wrong?

 In the guidelines for businesses decision-makers, but there are still many
“grey areas” not covered by laws and regulations. Some organizations
develop ethical guidelines for their members. Here ethics involve
standards about what is “right” and “wrong”. However, in a global setting it
is not as easy, as it seems, to decide what is right and what is wrong.
Actually, it is the social responsibility of a firm in the target market, which
comes into debate in this context.

 Present Ethical Education

 Business ethics being taught in Universities provides perspectives to

students, in the sense, how ethical practices would help in creating and
running businesses without resorting to fudging of accounts, balance
sheet or numbers.
 Case studies of the firms which run their businesses ethically, the
struggles that they go through to get Government approvals, delays
caused in approvals for not paying bribes etc., would provide the students
a deeper insight into how to navigate through the pitfalls and how to run a
business in a sustainable and socially responsible manner.
 On the other hand, case studies of business houses which resorted to
unethical practices would provide them a picture of how such firms
climbed to unbelievable heights within a short period and a steep decline,
as soon as the outcomes of unethical practices get exposed. Once this
exposure is given to the students, it is ultimately left to the students to
follow ethical or unethical practices.
 Swaying from ethical to unethical or partially ethical or partially unethical is
a result of not only dedicated ethics class/ or embedded ethics teaching,
but also by comparing their peers or seniors, how they are climbing the
career path and through what means. Whether fast growth path or slow
but fairly consistent and acceptable growth path - the choice is left to
them.
There are three main reasons why ethics has to play a key role in business:
It is crucial that ethics have a considerable influence if we want an
efficient, smoothly operating economy. Ethics helps the market to its best.
The government and the legal system cannot resolve certain key
problems of business and protect the society while ethics can. Ethics can
only resolve futuristic issues. That company‟s social responsibility should
extend beyond what the regulations require.
Ethical activity is value in itself, for its own sake, because it enhances the
quality of lives and the work we do.

The issue of teaching ethics is an old one. Almost 2500 years ago, the
philosopher Socrates debated the question with his fellow Athenians and his
position was clear: Ethics consists of knowing what we ought to do, and
such knowledge can be taught. Most psychologists today would agree with
Socrates. Studies indicate that a person's behaviour is influenced by his or
her moral perception and moral judgments. It is in the light this that the
Corporate Boards need to spend more time on the reporting of non-financial
issues such a strategic performance drivers, value to customer, quality
improvement rates, stakeholder concerns, corporate culture measurement
and environmental issues.

 Ethical leadership
Leaders who lead ethically are role models, communicating the
importance of ethical standards, holding their employees accountable to
those standards, and -- crucially -- designing environments in which others
work and live.
Moral leadership in a company is of critical importance, especially in this
century society where government regulations, the public and consumer
watch groups demand it and widespread media reacts to a company that
fails to deliver on it.
Small businesses must pay special attention to maintaining moral
expectations of communities they serve, making moral leadership and
guidance key. In my experience as CEO of a large public sector with
global operations I have seen that ethical leadership can cause a host of
positive outcomes, and to reduce the risk of many negative outcomes.
Leadership is indeed the most important lever in an ethical system
designed to support ethical conduct.
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