Globalization & Business ethics

To Evaluate: Measure the impact of globalization on Economy

1. By Prof. Nikhil Bangde (S. B. Jain Institute of Technology, Research & Management) Business Ethics Module VI- Globalization & Business Ethics

2. This Unit will help You [Course Outcome (CO)] To Evaluate: Measure the impact of globalization on Indian economy 2 Prof. Nikhil Bangde, Asst. Professor, SBJITMR

3. Prof. Nikhil Bangde, Asst. Professor, SBJITMR 3 INDIA’s Case of GLOBALIZATION via LIBERALIZATION

4. Globalization Prof. Nikhil Bangde, Asst. Professor, SBJITMR 4 Globalization refers to the shift toward a more integrated and interdependent world economy Globalization involves the integration of technology, markets, politics, cultures, labor, production & commerce. Globalization is both the process and the result of this integration. Globalization is used to describe the growing interdependence of the world's economies, cultures & populations, brought about by cross-border trade in goods and services, technology & flows of investment, people, and information

5. Globalization Prof. Nikhil Bangde, Asst. Professor, SBJITMR 5 One of the concern with globalization is the expansion of international trade to a point where national markets have been overtaken by regional trade blocs, leading eventually to a global marketplace. Drivers of Globalization Decline trade & investment barriers Technological changes

6. Factors facilitating Globalization Prof. Nikhil Bangde, Asst. Professor, SBJITMR 6 Technology expansion especially in transportation & communications Govts . are removing international business restrictions Institutions providing services to ease the conduct of Int. Business Consumers knowledge about & want of foreign goods and services Competition has become more global Improving political relationships among major economic powers Countries cooperate more on transnational issues Cross-national cooperation and agreements

7. Cultural Globalization Prof. Nikhil Bangde, Asst. Professor, SBJITMR 7 It refers to the transmission of ideas, meanings & values around the world to extend and intensify social relations This process is marked by common consumption of cultures that have been diffused by the Internet, popular culture media & international travel It is one of the three main dimensions of globalization other being economic globalization & political globalization Two most successful global food & beverage outlets: McDonald's -39,198 (as of 2020) Starbucks-32,646 (as of 2020) American companies are best examples of globalization operating worldwide

8. Socio- Culture of Globalization Prof. Nikhil Bangde, Asst. Professor, SBJITMR 8 Globalization has left back its footprints at every sphere of life. Not only in India, but the interchange of world views and ideas has resulted in a major transformation of the lifestyle and living standard of people globally. There is increasing interaction between people of different countries, as a result food habits, dress habits, lifestyle & views are being internationalized Globalization has influence the culture of one country to another country

9. Socio- Culture of Globalization- India Prof. Nikhil Bangde, Asst. Professor, SBJITMR 9 Globalization has brought to India new technologies, new products and also the economic opportunities MNCs are looking at India in a big way, and are making huge investments to set up R&D centers in the country ( India has made a lead over other growing economies for IT & Business Processing) There has been both positive and negative impact of globalization on social & cultural values in India.

10. Positive Impact of Globalization on Indian Culture Prof. Nikhil Bangde, Asst. Professor, SBJITMR 10 Globalization has allowed for the spread of customs, language & products Globalization has allowed for people to be able to attain goods & services which are not previously available It has allowed people to become familiar with the culture of other country allowing for greater understanding Incoming of foreign companies means more local people getting employment

11. Negative Impact of Globalization on Indian Culture Prof. Nikhil Bangde, Asst. Professor, SBJITMR 11 Indian rich culture getting diluted with westernization Joint families has given way to nuclear families, as most people shift to metro cities for employment Increasing number of divorce cases & extra-marital affairs Increase in adultery Social gatherings have became less Negative impact on Food, Clothing and Dialect

12. Multinational Enterprises (MNEs)/ Multinational Corporations (MNCs) Prof. Nikhil Bangde, Asst. Professor, SBJITMR 12 Multinational Corporation (MNC) or Transnational Corporation (TNC), also called Multinational Enterprise (MNE), is a corporation or enterprise that manages production or delivers services in more than one country MNE’s/MNC’s are corporations that “own or control production or service facilities outside the country in which they are based” MNE’s/MNC’s are also referred to as global, transnational & international companies

13. Common Characteristics of MNC’s Prof. Nikhil Bangde, Asst. Professor, SBJITMR 13 Operating a sales organization, manufacturing plant, distribution center, licensed business, or subsidiary in at least two countries Earning an estimated 25 to 45% of revenue from foreign markets Having common ownership, resources, and global strategies

14. MNC’s Benefits for Host Country Prof. Nikhil Bangde, Asst. Professor, SBJITMR 14 Hire local labor Create new jobs Co-venture with local entrepreneurs & companies Attract local capital to projects Provide for and enhance technology transfer Develop particular industry sectors Provide business learning and skills Increase industrial output and productivity Help decrease the country’s debt and improve its balance of payments & standard of living

15. Host Country Benefits for MNC’s Prof. Nikhil Bangde, Asst. Professor, SBJITMR 15 Low costs of production that enable MNE sell its products in the lower prices & get higher income Less stringent laws and regulations in host country compared with the home one and make it more easier to operate

16. MNC’s Drawbacks for Host Country Prof. Nikhil Bangde, Asst. Professor, SBJITMR 16 Domestic businesses may not be able to compete with MNCs & some will fail MNCs may not feel that they need to meet the host country expectations for acting ethically & in a socially-responsible way MNCs may imposing their culture on the host country, at expense of the richness of local culture MNC's may use natural resources of the host country indiscriminately & cause depletion of resources Profits earned by MNCs may be remitted back to the MNC's base country rather than reinvested in the host economy

17. Host-country Perspective towards MNC’s Prof. Nikhil Bangde, Asst. Professor, SBJITMR 17 MNC’s can dominate & protect their core technology, R&D, thus treating host country as a consumer, not a partner or producer MNCs can destabilize national sovereignty by limiting a country’s access to critical capital & resources , thereby creating a host-country dependency on the MNC’s governments and politics. MNCs can create a “brain drain” by attracting scientists, expertise, and talent from the host country to their parent country

18. Host-country Perspective towards MNC’s (Contd..) Prof. Nikhil Bangde, Asst. Professor, SBJITMR 18 MNEs can create an imbalance of capital outflows over inflows MNEs can disturb local govt. economic planning & business practices by exerting control over the development and capitalization of country’s infrastructure MNEs can destroy, pollute & endanger host-country environment and health of local populations.

19. Internationa l Code of Business Conduct (MNC Guidelines in dealing with Least Developed Countries (LDC) by DeGeorge ) Prof. Nikhil Bangde, Asst. Professor, SBJITMR 19 Do no intentional harm Produce more good than harm for the host country Contribute to the host country’s development Respect human rights, local culture Pay fair share of taxes Cooperate with local government as partners Attend to actions, consequences & failures of the firm Maintain high safety standards and controls Protect the natural environment

20. Whistle Blowing Prof. Nikhil Bangde, Asst. Professor, SBJITMR 20 Release of information by a member or former employee of an organisation that is evidence of illegal and/or immoral conduct in the organisation or conduct in the organisation . Whistle Blowing can only be done by an member in the organisation not a witness of a crime or a reporter

21. Types of Whistle Blowing Prof. Nikhil Bangde, Asst. Professor, SBJITMR 21 Internal Whistle Blowing When an individual advocates beliefs or revelations within the organization. Ex: Executive reporting to HR Manager about bribery taken by his immediate superior 2. External Whistle Blowing When an individual advocates beliefs or revelations outside the organization Ex : Executive reporting to news channel about his bribery taken by his immediate superior

22. Whistle Blowing Prof. Nikhil Bangde, Asst. Professor, SBJITMR 22 Whistle Blowing is something that can be done only by a member or former member of an organisation It must be an Information that is not available for public It should be an evidence of some significant kind of misconduct on the part of an organisation Information must be outside normal channel of communication Release of Information must be something that is done voluntarily as opposed to being legally required Whistle Blowing must be undertaken as moral protest. The motive must be correct some wrong not to seek vigilance or personal advancement

23. Conditions for Justified Whistle Blowing Prof. Nikhil Bangde, Asst. Professor, SBJITMR 23 i . Situation of sufficient moral importance If the situation of information is to disclosure people's live at stake Ex: Side-Effects of drug/medicine if not prescribed in the cover of medicine & information is releaved to public by whistle blower ii. Situation when all facts of information are properly understood with their significance Whistle Blower must do much documentation and other corrections as possible because he/she is strong obliged to people An Employee should not jump into conclusion without much clarification If significance of information is genuine it could be justified

24. Conditions for Justified Whistle Blowing Prof. Nikhil Bangde, Asst. Professor, SBJITMR 24 iii. All internal channels have to be utilized without a step short of Whistle Blowing Whistle Blowing should be last not the first resort Its justified when there in no morally preferable alternatives iv. Best way to Blow the Whistle To whom the information is the be revealed. Agencies like Environmental Protection Agency or Exchange Commission can spark an investigation Local investigation bodies FBI or attorney

25. This Unit will help You [Course Outcome (CO)] To Evaluate: Measure the impact of globalization on Indian economy 25 Prof. Nikhil Bangde, Asst. Professor, SBJITMR