Ethical and Social Concerns in Global Business

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QUESTION: Critically examine the ethical and social concerns in global business and their relevance in the Kenyan economic situation.


Ethics are defined as the process of distinguishing the right and good from the wrong and bad and they call for a moral responsibility to pursue the good and right. Business ethics are concerned with the good or right and the bad or wrong behavior in the business organization context. Social responsibility on the other hand goes hand in hand with business ethics. It advocates that a business should act more responsibly beyond the pure profit or economic motive. The expectations of both ethical conduct and socially responsible conduct can vary in cultures of different countries. Globalization on the other hand is an umbrella term which can be related to every field of our daily life. According to Friedman (1999), Globalization is: “The inexorable integration of markets, nation states, and technologies to a degree never witnessed before- in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than before, the spread of free-market capitalism to virtually every country in the world.” Global business therefore consist the transactions That are devised and carried out across national borders to quench the needs of individuals, companies and organizations. The scope and content of ethical issues in business have been fast evolving, due to the deregulation of markets and globalization. The Kenyan economy has both had both desirable and undesirable changes in both the ethical and social arenas owing to globalization.


The need of ethics in the business world is superlative and global as new trends and issues arise daily which may create an important burden to business entities and end-consumers. There is therefore a need for proper ethical behavior in organizations for smooth operations within the business entities. Morf (1999:265) believes: ”Ethics is the moral principle that individuals inject into their decision-making process and that helps temper the last outcome to conform to the norms of their society.” Again, ethical principles have the very profound function of making behavior very predictable (Mahdavi, 2003). Businesses need to come to grips with the legal and moral atmosphere in which they operate. The various ethical issues in global business that have imparted variously in the Kenyan Economy include the following:

1) Corruption and bribery; corruption and bribery is one of the menace that has seen Kenya lag behind in terms of development. It is often claimed that in 1963, when Kenya acquired its independence from the colonial rule, it was at par with countries like South Korea, Malaysia, and Singapore among others, in terms of development. However, the above mentioned countries have grown to be giant economies while Kenya is still struggling at grassroots with take-off strategies. Kenya has had major scandals of corruption which include The Goldenberg scandal, The Anglo leasing among others, which involved ‘white elephant’ projects that looted the government of major funds. The unethical act is still rampant in the country even after the establishment of the Kenya Anti-corruption Commission to help curb the vice. 2) Unfair Pricing; This includes the unfair differential pricing, improper invoicing –where the buyer requests for a price other than the actual price paid, pricing to outdo local competition, dumping commodities at prices below the home country prices and pricing practices that are permitted in the host country but against the law in the home country such (e.g. price fixing agreements). Unfair pricing is notable in the Kenyan economy where the prices of oil are inflated by the oil selling companies. The presence of the cheap ‘mitumba’ clothes in Kenya have contributed among other things...
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