Conducting global business is extremely complex and difficult. At times both countries involved may not be in agreement, but decide to conduct business anyway. For a company to conduct business in another country there is extensive research, negotiation, and compromise done before it can be finalized. Even though not all standards meet those of the United State, some companies continue to make business abroad. Some companies when investigated and found guilty of unethical behavior, blame their actions on not knowing about it or on the subcontractor or supplier. It is inevitable to avoid ethical issues when conducting global business. This is mainly because of differentiation of foreign laws, regulations, and policies. Among those there are also culture and language barriers that contribute to the origin of ethical dilemmas. More than anything cultures is one of the primary reason for why ethical issues come up amongst all others.
Globalization is criticized for its practice of unethical behavior in countries where individual’s freedoms are subjective. Some of many global ethical issues that exist in today’s world include corruptions and money laundering, human rights under totalitarian regimes, workplace conditions, environmental issues, respect for local customs and cultures, and many more (LEVINE). Developing nations are more susceptible to have ethical issues than developed countries. This is mainly due to cultures, customs, norms, and poverty.
Corruption and money laundering is being seen on the news across the border in Tijuana, Mexico. San Diego news is constantly reporting how the drug cartels are affecting the business in the city and stating that police are involved as well. The laundry of money has crossed the border over to San Diego, and as of the present time numerous of fictitious businesses are being questioned.
The differences in cultures between countries involving possible misunderstandings relating to the traditions that require the exchange process (e.g., transactions) may be understood by one culture as bribes but in reality be an acceptable business practices in another culture. These types of traditions include gifts, monetary payments, favors, entertainment, and political contribution. This is why it is important for expatriates to study the culture and way before traveling to a foreign country.
The issue of globalization and working conditions, especially in less developed countries, is a complex one. Some may argue against “sweatshop” labor and the exploitation of the working poor. Although others argue that such jobs offer good economic opportunities for workers, providing better jobs than are otherwise available to them. Again what United States consider unethical might be seen at that country as an opportunity.
Globalization has led to exploitation of labor and human rights are being compromised. Prisoners and child workers are used to work in inhumane conditions. Safety standards are ignored to produce cheap goods (LEVINE). Because some countries do not enforce child protections or human rights, government pays little or no attention to this type of treatment. Some high powered distance countries accept inequality, in these areas women remain disadvantaged in many areas of life, as education, employment health, and rights.
Developed countries have contract out manufacturing and white-collar jobs in undeveloped countries. That means fewer jobs for their people. This has happened because manufacturing work is outsourced to developing nations where the cost of manufacturing goods and wages are lower (LEVINE). This is a main cause that results in poverty around the world.
Last, manufacturing companies are affecting the environment. This is causing air pollution, contaminating the water, producing acid rain, and contributing to global warming. Manufacturing companies release chemicals that destroy the ozone layer. Depletion of the ozone layer results in loss of land developments. The loss of development discourages globalization in that some undeveloped nations have cheap labor and is less expensive to produce. Also waters are being contaminated due to manufactures operated irresponsibly were dumping of poisonous chemical wastes in the water. Undeveloped nations obtain their water from rivers and if these chemicals are dump in the water, most likely, the native people will drink the contaminated water.
Individuals recognize that a countries perception is influence by culture (De George, 2006). A collectivist culture, people pay more attention to social relationships than behavior. Were putting family first is praise above all. The textbook Business Ethics gives a good example on the perception of culture differences. A New York executive explained to Asian students that his wife and him went to prison for conspiracy. Their nephew was living with them and he was selling drugs from their house. His wife and him were accused and sentenced to jail time for many years. When Asians students heard this, they were horrified. To the Asian culture, they believe that family relationships are more important than the crime. Whereas the American culture, we see nothing wrong with the punishment. This is an example of differentiation of cultures ethical perception (De George, 2006).
A popular ethical dilemma that occurred with a well-known sports company was Nike. In 1996 Nike was scrutinize and criticized for child labor in Pakistan. This became known through Life magazine that illustrated a 12 year-old boy sewing a soccer ball in an offshore Nike’s company (De George, 2006). Activist started to picket and boycott Nike stores, by holding posters of the picture of the boy working. On the other hand, child labor is illegal in Pakistan but the law is not enforced. In Nike’s defense, the company stated that the company was run by a subcontractor. That Nike had no idea of what was happening. Regardless of this, Nike was held responsible and a “Boycott Nike” movement began. This movement monitored and reported Nike’s every action.
Nike was also involved in another ethical dilemma around the same time the child labor incident occurred. This time it became known in 1996 through CBS’s, 48 Hours documentary. This documentary reported the working condition in Vietnam; it featured abuses toward workers who at the time were making Nike products (De George, 2006). Since then Nike has been criticize for engaging in unethical employment practices in foreign countries where employees are exploit or where government is corrupt.
In both ethical dilemmas that Nike was involve the company contributed to some of the ethical issues described previously. Nike was criticize for breaking human rights, child labor, working conditions, and unethical labor practices. Nike risked its reputation and to this day is still being criticized and judged.
In conclusion, globalization has changed the way societies work and the way individuals think and interact with one another. Regardless if whether we are or not in agreement with a foreign countries laws and conduct, there is little a foreign person can do. The ideal solution is for U.S. companies to do as much research about foreign countries laws, cultures to avoid being involved in unethical scandals.
De George, R. T. (2006). Business Ethics (6th ed.). Upper Sadle River, NJ: Prentice Hall, Inc. A Pearson Education Company.
The LEVIN Institute . (n.d.). Globalization 101. Retrieved from http://www.globalization101.org/issue/english/
Trevino, L. K., & Nelson, K. A. (2007). Managing Business Ethics. Straight Talk About How To Do It Right. [University of Phoenix Custom Edition e-Text]. : John Wiley & Sons. Retrieved from , website.