Globalization in Businesses and the Ethical Issues

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Introduction

In the quest to globalize businesses, there have been ethical issues that have emerged from it. Some ethical issues that have been brought about by globalization have become a major concern due to the negative impacts it has on the social and economic life of the people inhabiting these countries that are negatively impacted. The essay that follows will give an account of the ethical issues brought about by globalization in businesses. These ethical issues brought about by business globalization have to be addressed to prevent a thing intended for good from bringing about negative outcomes in the long run. The essay that follows will give a detailed account of the ethical issues that resulted from business globalization, it will also compare ethical perceptions across cultures in regards to the situation and finally determine the risks and consequences that are associated with the dilemma.

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Definition of globalization

Globalization is a process whereby interconnections and connections are made available through wide geographical regions, which include varying societies across various varying geographical regions. Globalization is made possible by the fact that communication has been improved over time and thus resulted in an expansion in trade over the whole world. Globalization has the effect of reducing the differentiation that is brought about by cultural evolution. It, therefore, homogenizes the way of life of a whole population and it is the same thing that has been evidenced in the business world. Globalization affects three main areas of business ethics which include; culture, law and finally accountability.

Cultural perspective of globalization

The cultural perspective of looking at the ethical issues brought about by globalization is an inescapable arena. With the formation of territorial businesses, so does it come with corporations engaging in transactions that are conducted overseas. When these corporations open businesses in other areas, they are suddenly met by new as well as diverse and sometimes it might go up to cultural practices that entirely contradict with the moral values of the corporation’s mother country. The ethical values that are acceptable in a certain country might become questionable even before the corporation establishes itself in the new region. For example, the attitudes that a particular country has towards race and gender might completely differ from that of another country. The problems brought about are because as much as globalization has the outcome of deterritorializing a varied number of cultural practices and activities, the connection between culture and especially that connected to moral values still has its roots in a certain geographical area no matter what happens.

Ethical dilemma from global warming

Globalization resulted in an ethical dilemma where the playboy magazine that is an adult magazine in the US and normally portrays nudity was suspended for a period of time in Indonesia. At first, the company producing the magazine in the country was suspended from production and then later on completely banned from producing the magazines following a violent demonstration by the Muslims of the country. The situation becomes even more of an ethical dilemma due to the fact that the issues produced in Indonesia already were toned down meaning that there was no nudity portrayed in them but the Muslims still had an issue with the magazine since it was conflicting with the moral values of their country (Wade, 2004, p. 574).

Legal parameters from another area that is affected by globalization. The legal constitution of a certain territory greatly differs from that of another territory. This is one of the challenges brought about by globalization. In this respect, the laws governing one territory become less effective and almost inapplicable when a business operation is established in a different geographical region. The laws of the mother territory cease to govern the activities that may be carried out by the same country in the case where the same corporation opens up a business in another country. This comes about due to the fact that the laws of a particular territory are usually confined to that specific area and they cannot govern another area. For example, the laws governing France can only be applicable and binding those businesses located in France and cannot bind the same branch of a business existing in the United Kingdom. For that reason, once a company opens one of its chains in another region, there is a complete change in the legal framework from which the business is expected to operate. Due to this difference in legal structures, the managers of a particular company cannot continue relying on the ethical practices of one region to govern another region. In this respect, the global financial markets are usually beyond the legal management of any government and this has been posing challenges to governments about the enforcement of laws in regions that have been deterritorialized.

Accountability and globalization

Accountability is another issue that is raised by globalization. Corporations are seemingly the most dominant business activities that are commonly mentioned in globalization news. Multinational corporations are almost as influential in economic terms as the government. A good example of such a situation is the situation in Denmark where the gross national product of the Denmark government is almost the same as the turnover of general motors. In such an occurrence, the Danish government is accountable to the citizens of the country whereas the general motors’ responsibility weighs only on the shareholders of the company irrespective of where the chain is situated. As opposed to the responsibility the government has towards its constituents, general motors’ has little to negligible responsibility to the citizens who directly rely on the investment decisions that are made by the company. Therefore, general motors are not held responsible to these respective constituencies. This, therefore, implies that deterritorialization of trade and industry activities renders the laws of the government vague in governing the operations of these industries and therefore they escape the democratic responsibility they are supposed to have on the affected people. Due to this, people have seen the need for democratic responsibility applied by these multinational corporations and that is why people are raising voices and campaigning vigilantly for anti-globalization. Globalization, therefore, leads to the great need for accountability.

Globalization and effects on the cultural makeup of a territory

Globalization also has effects on the cultural makeup of a certain territory. Due to the fact that globalization involves the shifting of different races and individuals from one country to another and in their shifting, they carry their own cultural practices to another region. Therefore, these global businesses open ports where there is a risk for ‘imported” culture which poses a danger to the local populations’ culture. This might cause a reduction in the cultural diversities of different communities and even worse, it can lead to assimilation of cultures altogether. Another reason why global businesses pose danger to culture is that different cultures are guided by different norms. Therefore, a business has to consider the ethical practices and norms of a certain country before they even consider opening a chain in that particular country. This is due to the fact that different cultures conflict with each other. For example, to the Europeans capital punishment is a completely unacceptable mode of punishment but the Americans have no problem with using capital punishment to dispense justice. Another example is that of the playboy magazine, which is an adult magazine in the US but the editions that were normally supplied in Indonesia were suspended for a certain period, but then were later eliminated after the angry Muslims campaigned for the closing of the company in 2006 following a protest. To top it all off, the columns produced in Indonesia were already toned down so that they could have a limited display of nudity. This just serves to show how different cultures differ when it comes to multinational corporations (Fluehr-Lobban, 2000, p.43).

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Risks and consequences associated with globalization

Numerous risks and consequences resulting from globalization. Such are the risks that are facing the dilemma behind the Indonesian issue of playboy magazine. The playboy Indonesian producers are faced with the risks of further violent demonstrations from the angry Muslims who want the company to stop producing the magazine in their country. This has followed the police to issue advice to the producers to consider a way through which they can stop producing the magazine in Jakarta so that they can avoid the incidences of more violence. The Mujahideen council in Indonesia is posing complaints to the police about the magazine of the fact that it is allegedly promoting obscenity among the youths of the country. The possible consequences of the magazine are that it has led to protests and demonstrations that have resulted in the workers of the playboy magazine working without an office. The consequence of the magazine is also that of draining away the moral behaviors of the youths of the country. Therefore, as much as globalization has its pros there are several cons that come with it such as this dilemma that is facing the playboy magazine and the Indonesians.

Conclusion

In conclusion, globalization has negative impacts that it has on the moral values of a foreign country. Multinational corporations must have the moral and ethical values of a particular country before it decides to establish a chain in a particular country. This should be done so as to avoid the ethical dramas that result due to misconceptions that arise from these business practices.

Reference

Fluehr-Lobban, C. (2000) Globalization of research and international standards of ethics in anthropology. 925:37–44.

Wade, R. (2004). “Is Globalization Reducing Poverty and Inequality?” in World Development, 32 (I 4): 567-589.

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BusinessEssay. 2021. "Globalization in Businesses and the Ethical Issues." December 2, 2021. https://business-essay.com/globalization-in-businesses-and-the-ethical-issues/.

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