The Global Context

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The Global Context

• Lecture 10

Global Corporate Social Responsibility
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Lecture Objectives

• Define Corporate Social responsibility
• Identify corporate social responsibility issues
  in the global economy
• Propose ways in which business can respond to
  global inequalities

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Why this Topic?

• Globalization brings many pressures and problems
• Problems are partly, but not wholly linked to MNC
  conduct in international markets
• Globalization is a continuing process and so of
  continuing interest to ethics in business

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Corporate Social Responsibility

• The notion that corporations have an obligation
  to society to take into account not just their
  economic impact but also their social and
  environmental impact.

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Global CSR

• Whose standards?
• ETHNOCENTRISM
• CULTURAL RELATIVISM

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Codes of Conduct

• ARE THERE UNIVERSAL PRINCIPLES?
• FREEDOM OF MOVEMENT
• OWNERSHIP OF PROPERTY
• FREEDOM FROM TORTURE
• FAIR TRIAL

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Codes of Conduct

• PHYSICAL SECURITY
• FREEDOM OF SPEECH AND ASSOCIATION
• MINIMAL EDUCATION
• POLITICAL PARTICIPATION
• SUBSISTENCE

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The UN Global Compact

• FOUR AREAS
• HUMAN RIGHTS
• LABOUR STANDARDS
• ENVIRONMENT
• ANTI-CORRUPTION

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Corruption

• Involves the behaviour on the part of officials
  in the public and private sectors, in which they
  improperly and unlawfully enrich themselves
  and/or those close to them, or induce others to
  do so, by misusing the position in which they are
  placed
• (World Bank)

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Whats Wrong with Bribery Corruption?

• REDUCES NATIONAL WEALTH BY DISTORTING THE MARKET
• DIVERTS RESOURCES FROM PUBLIC SERVICE PROJECTS
• UNETHICAL ABUSE OF POWER

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Whats Wrong with Bribery Corruption?

• UNDERMINES THE DEMOCRATIC PROCESS
• CAN DAMAGE THE ENVIRONMENT

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Business Risks

• LOSS OF REPUTATION
• RISK OF PROSECUTION
• NO COMPENSATION FOR LOST BUSINESS
• ONE BRIBE CAN LEAD TO ANOTHER

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Business Risks

• ADDS TO THE COST OF DOING BUSINESS
• MAKES DOING BUSINESS DIFFICULT
• LOSS OF TRUST

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Corruption
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Child Work

• TYPES OF CHILD WORK
• ECONOMICALLY ACTIVE
• CHILD LABOUR
• HAZARDOUS WORK

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Child Labour
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Child Labour

• WHY DO CHILDREN WORK?
• PUSH FACTORS
• POVERTY
• LACK OF EDUCATIONAL OPPORTUNTIES
• FAMILY BREAKDOWN
• CULTURAL PRACTICES

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Child Labour

• WHY DO CHILDREN WORK?
• PULL FACTORS
• CHEAP LABOUR
• OBEDIENT LABOUR
• NIMBLE FINGERS
• INADEQUATE/UNPOLICED LAWS
• POOR INFRASTRUCTURE

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Whats Wrong With Child Labour?

• DENIAL OF HUMAN RIGHTS
• STEALS CHILDHOOD
• PREVENTS EDUCATION
• EXPLOITED THROUGH LOW OR NO WAGES
• POOR CONDITIONS OFTEN LEAD TO HEALTH PROBLEMS

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Whats Wrong With Child Labour?

• PERPETUATES POVERTY
• SWELLS LABOUR SUPPLY AND REDUCES WAGES FOR ALL
• CAN REDUCE ADULT EMPLOYMENT OPPORTUNITES
• LONG TERM COST TO SOCIETY

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Why worry?

• Ethical problems in global business can leave
  long-lasting stains on corporate reputations
• Nike
• Gap
• Coca-Cola
• Nestlé
• Obvious damage to expensively-created brand value
• Worldwide media, increasingly decentralised
• Possible competitive disadvantage
• Bad news demotivates more than good news motivates

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De Georges Code of Conduct

• Do no intentional direct harm
• Act so as to benefit the host country
• no utilitarian trade-offs
• The good of the host country may not be the same
  as the good of the current regime
• Respect the human rights of workers, consumers
  and others in the host country
• Promote the development of just background
  institutions, within the host country and
  internationally
• Respect the laws of the host country as well as
  its culture and values, provided these do not
  violate human rights or impose immoral laws
• De George, R T (1998), Business Ethics,
  Prentice Hall

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Any Questions ?