of Stakeholders, Ethics, Public Policy:

1
Management 308

• Chapter 7
• of Stakeholders, Ethics, Public Policy
• The Challenges of Globalization
• Shawn Berman
• Anderson School of Management
• University of New Mexico

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What do we mean by globalization, anyway?
Globalization is a process that leads to the
increasing movement of goods, services, and
capital across borders. Global companies source,
produce, and distribute goods and services in
multiple countries. Like any process, it can
be morally good or bad.
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How do firms globalize?

• There are three main ways companies can expand
  operations globally. They can
• Develop global market channels
• First build a successful business in their home
  country, then export products or services to
  buyers in other countries
• 2. Establish global operations
• Locate manufacturing plants or service operations
  in other countries as a way to cut costs work
  may also be subcontracted
• 3. Develop global supply chains
• Purchase raw materials, components, or other
  supplies from sellers in other countries
• At the root of globalization is the economic idea
  of comparative advantage

4
Transnational Corporations (TNCs)

• These are also known as MNEs or MNCs
  (Multi-National Corporations or Entities. TNCs
  are
• Defined by the United Nations as firms that
  control assets abroad
• 70,000 TNCs operate in the modern global economy
• They, in turn, have 700,000 affiliates
  (suppliers, subcontractors, retailers they have
  some business relationship with)
• Most global commerce is carried out by a small
  number of powerful firms
• Next slide lists top 10 non-financial
  transnational corporations, ranked in order of
  the value of the foreign assets they control

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Top 10 Non-Financial Transnational Corporations
Figure 7.1
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Why is globalization accelerating?

• Globalization is being driven by
• communications-technology advances
• transportation systems
• the increasing importance of MNCs
• social and political reforms
• multilateral trade and financial institutions
  like the IMF, the World Bank, and the WTO.

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Benefits and costs of globalization
Figure 7.3
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Questions facing globalized world

• There are many questions facing firms that are
  global in their operations
• What obligations do corporations owe to the
  communities in which they operate?
• What mix of business, government, and NGOs (civil
  society organizations) best brings about the
  globalized world wed like to see? Is there even
  one answer to this question or does it depend on
  the situation?
• Is there really a connection between economic
  development and political freedom? What role do
  corporations play in governmental policies?
• What do collaborative relationships look like?
• Why I got a PhD

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Conflict Diamonds, discussion questions

• What are conflict diamonds? What groups
  benefited from the trade in conflict diamonds?
  What groups were hurt by it?
• What three sectors concerned with the problem of
  conflict diamonds? What was the interest of each,
  and in what ways did their interests converge?
• Do you believe that any of these three sectors
  could have addressed the problem of conflict
  diamonds unilaterally? Why or why not?
• Do you believe the Kimberley Process will
  successful in achieving its objective? Why or
  why not?