Read the case Debating The Merits of Globalizations and in your groups, let’s discuss the case study questions below: 1. Do you think globalization and MNE activity are creating problems for the world? What kinds of problems can you identify? What are the unintended consequences of international business? If all commercial decisions had an obvious and indisputable social benefit and a benign environmental impact, business leadership would be a great deal easier – and a lot less interesting. Niall Fitzgerald, The Role of Business in Society – An Agenda for Action, A series of Thought Pieces by Business Leaders in Support of the Clinton Global Initiative http://www.hks.harvard.edu/m-rcbg/CSRI/publications/report_12_CGI%20Role%20of%20Business%20in%20Society%20Report%20FINAL%2010-03-06.pdf
I do agree with the Problems are outlined by the Activist as listed below: 1. Disregard for human rights, basic labour standards.
2. Low wage factories – substandard conditions, exploited workers 3. Job ‘Losses’ – in the MNE country of origin
4. Environmental damage due to MNE’s using only the bare minimum to satisfy weak environmental standards 5. Harming cultural interests e.g. ‘McDonaldization’
6. Stifling the growth of SME’s
7. Inequality –Widening the gap between the rich and poor However, I would argue that these are hardly ‘unintended’ problems. MNE’s like any other enterprise are created with the aim of generating profit. Profit margins are increased by cutting costs. If a cheaper labour force is identified elsewhere is it not logical outsource these jobs? If a plant is less costly to construct in another country with a weak environmental standards, the clear choice, strictly in terms of business is rather clear. To be clear, I do not in any way condone the disregard for human rights and wonton environmental damage. My point is simply that, in my opinion, it is not globalization forming the root of these problems but instead individual choices made by heads of MNEs. It is from this standpoint, that many voices both in the world of business and concerned outsiders advocate the concept of ‘corporate responsibility’- a sort of ‘honor system’ for MNE’s. Without a system to police these heads of Multi-national corporations and the wealthiest 5 % of the world’s population writing the rules on global business propriety corporate responsibility is an ideal to which few MNE’s will choose to live up. 2. Summarize the arguments in favor of globalization made by the business executive. What is the role of technology in supporting company performance in a globalizing business environment? Arguments in favor of globalization made by the business executive: * provide better-paying jobs,
* have more profits,
* pay higher taxes, and
* stimulate purchases
* enhance local living standards, and
* encourage global competitiveness
* provide better benefits than non-exporting firms
* amortize the costs of big projects. E.g. pharmaceutical firms R&D in the global marketplace. * uninterrupted international commerce is good “In the long run” Role of Technology in supporting company performance in a globalization * communication – co-ordinating operations across countries requires constant communication between key players along the Value Chain. The dynamic nature of the global market makes fast and reliable forms of communication a clear necessity. * Production – decreasing product manufacturing time and costs (CAM,CAD), * Travel- lower costs for transportation of raw material and distribution of products * E-commerce and Internet
A powerful force drives the world toward a converging commonality, and that force is technology. It has proletarianized communication, transport, and travel. It has made isolated places and impoverished peoples eager for modernity’s allurements. Almost everyone everywhere wants all the things they have heard about, seen, or experienced via...
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