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Globalization affect ethical decision making in organizations

Because of technological changes our world is becoming more and more interconnected.

The dynamic force of globalization will continue to change our perceptions, as it reshapes our lives, the way we make a living and the way we relate.

The changes are economic, technological, cultural and political. Incidentally, Karl Marx, in the Communist Manifesto predicted that the relentless search for markets will alter older social structures.

The Critical Role of Ethics and Culture in Business Globalization

Some say it is a runaway world. I will look at the economic impact of this story and the contentious issue of globalization in trade and its effects on the poor as well as the rich. The gap globalization affect ethical decision making in organizations rich and poor in the world is still very large.

There are still too many people who die because they are too poor to live. Aid and a fairer trading system are crucial. As we will see, it can be an enormous help to poor countries. It can start them on the first steps of the ladder of progress. Tremendous changes are also occurring in the richer countries.

Globalization, free trade and outsourcing are very controversial issues. They have been much in the news but they have not been seriously discussed in the media. Thinking on this subject falls basically into two camps. The anti-globalists come in two varieties.

The protectionists, as for example Pat Buchanan, are extreme conservatives who think American nationalism suffers from the commands of the global economy. This approach is essentially economic nationalism. They believe that international institutions undermine the sovereignty of the nation and make the country more beholden to transnational corporations. Buchanan opposes multiculturalism and immigration, claiming it leads to a moral decline of the nation.

The opposite pole of anti-globalists are much more radical in their thinking. They oppose the WTO, the World Trade Organization, claiming that it is undemocratic, and ignores environmental problems and labor conditions such as child labor and workplace safety.

Finally they claim that globalization increases inequality and further impoverishes the poor. The anti-globalist movement has grown in passion and strength. They have staged numerous protests. The one in Seattle involved some violence, but mostly they are peaceful.

The one recently in Hong Kong however was not peaceful.

Ethical Dilemmas of Globalization

The pro-globalists claim that free trade creates wealth, and this increase trickles down and improves the condition of the poor. It is the increasingly closer integration of countries and peoples of the world brought about by the enormous reduction of transportation and communication costs and the breakdown of barriers to the flow of goods, services, capital and knowledge.

Think of it as a tidal wave of change brought about by globalization affect ethical decision making in organizations impact of new technologies. Television, the internet and other forms of rapid communication have increased mobility and commercialization of ideas.

Different aspects of globalization include free movements of capital, trade, cultural and political differences. With these changes come many problems which cross national boundaries: No nation can be totally immune. In the past many people lived in small areas.

Some people never went further than 20 miles from their homes. Now if there is genocide in Rwanda and Darfur, or a suicide bomber in Jerusalem, we see it on TV, We live more and more in a global community, and are experiencing a global economic order.

The scope and worldwide reach of our present globalization is new. However, from 1860 to 1914 there was a significant globalization trend which was also spurred by developments in transportation and communication. It came about because of railroads, cars, telephone and telegraph. World War I stopped this trend. Between the two world wars, there was much protectionism. The ancient world was always aware of the enormous benefits of trade.

Ships constantly crossed the Mediterranean. The Silk Road between China and the Roman Empire had an enormous effect on the enrichment of cultures as well as wealth. Why is trade beneficial?

If I have something you need and you have something I want—if we bargain and come to a deal— we both benefit. Of course one of us may be in a stronger bargaining position. Nevertheless we can both benefit. Adam Smith, and later, Ricardo, British economists, made the case for the free exchange of goods and services. As an example— the tailor does not attempt to make his own shoes but buys them from a shoemaker.

The ideal was that no country should produce anything it could import more cheaply from abroad. Countries should concentrate on industries in which they are low cost producers or to use economic language, they should produce where they have a relative advantage.

A classic example involved the Lancaster textile mills which exploited the climate of northern England, and Portuguese vineyards which prospered in the southern sun. In the presence of prohibitive tariffs of imports and exports which were prevalent at the time, England would have been forced to make its globalization affect ethical decision making in organizations wine, and Portugal to manufacture cloth.

This is obviously a waste of resources. This concept is a powerful argument, and it has worked up to a point. However it omits the effects of changing technologies. The country with weaker bargaining power remains committed to its own industry and may be unable to develop.

  • One reason cited is the comparative quality of the work force, compared to the south;
  • They claim that this is neither their role nor their mission;
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  • The gap between rich and poor in the world is still very large.

This has occurred in Central and South America, which for years traded only in a few crops and were totally dependent on the price of those crops. There is much talk about free trade.

The Impact of Ethical Decision Making in the Individual and Organizational Context

We must remember that every free trade agreement is a negotiated document. It involves all kinds of bargaining about different products and tariffs.

US corn producers benefited, while textile workers have not. Mexican farmers were devastated by US corn imports, and their textile workers lost out. Part of the reason is textile products from China and US subsidies for agriculture. The great inequalities in Latin America and the lack of gains in the world trading system have brought forth radical leaders in recent elections as Chavez in Venezuela and Morales in Bolivia.

The irony of democratic elections. There are many charges against the WTO. Here are three of the main criticisms. WTO places economic considerations ahead of concern about labor conditions and the environment.

WTO is undemocratic 3.

Globalization and Sustainable Development:Is Ethics the Missing Link?

WTO has a set of rules which all member states must accept. There are about 30,000 pages of them. If a dispute arises, and a complaint is made about unfair practices, there is a dispute panel. If the complaint is upheld and the nation continues to act in breach of the rules they are subjected to severe penalties—including tariffs against its own goods and perhaps a fine of money compensation.

Globalization of Ethical Decision Making

These are secret panels of trade organizations and lawyers. Only the quality or content is relevant. If a product is made by child labor, in unsafe conditions, or is damaging to the environment, it cannot be rejected.

This makes it difficult for a country to impose environmental labor or health standards. WTO rules prohibits countries from treating physically similar products differently on the basis of how they are made. So— anti-globalists have a strong case. However, free traders say WTO is ill equipped to rule on labor conditions and environmental situations. These decisions are complex. They claim that this is neither their role nor their mission. They are only concerned with trade.

  • The question arises—how well can a global free market—an essentially unregulated market—function in the absence of a global authority to set minimum standards on issues like child labor, worker safety, union rights, and the environment?
  • Many factors influencing organizational unethical decisions were investigated to discover the gaps and loophole thereby creating further and future research recommendations to cover the gaps;
  • Globalization, free trade and outsourcing are very controversial issues;
  • Television, the internet and other forms of rapid communication have increased mobility and commercialization of ideas;
  • Only the quality or content is relevant;
  • In the presence of prohibitive tariffs of imports and exports which were prevalent at the time, England would have been forced to make its own wine, and Portugal to manufacture cloth.

Rules concerning labor laws and environmental conditions are the province of international labor conventions of the International Labor Organization ILO and international environmental treaties. Globalists say protesters should focus their pressure on countries to abide by international laws. The final irony is that underdeveloped countries do not want to be pressured to impose labor and environmental standards as it will make their products more costly.

They want and need the business. They also say that many people in the west may regard low-paying jobs at Nike factories as exploitation but for many people in the underdeveloped world factory work is far better than growing rice and risking hunger. They also add that child labor is the only way a family may have as protection from starvation. Obviously labor laws and environmental rules are hard to enforce.

We will say more about this later. A charge against the WTO is that decisions there are usually made by consensus. Rule by consensus can also be called rule by veto. It takes the opposition of only a single member to stop an overwhelming majority from making changes. Developing countries make up the majority of members of WTO. But not every country has the same bargaining power.