Chapter 15 Globalization and Business Responsibilities

Question 1

Global Business Responsibilities

Answer 1

Not a new phenomenon: goods have been traded between regions since ancient times
●Corporations now seen as more efficient than governments in distributing goods and services needed by citizens
●Today, new view toward trade and market systems is referred to as globalization

Question 2

Globalization

Answer 2

Globalization: a process of decreasing constraints on the interactions among the nations and peoples of the world.
●Economic globalization: the integration of fragmented markets into a global economy.
●Political globalization: the process by which world power relationships change, and there is a loss of sovereignty by the states.
●Social or cultural globalization: the emer

Question 3

United Nations Global Compact

Answer 3

Human Rights:
1. Respect internationally proclaimed human rights
2. Not be complicit in human rights abuses
Labour Standards:
3. Uphold the right to collective bargaining
4. Eliminate all forms of forced and compulsory labour
5. Effective abolition of child labour
6. Eliminate employment discrimination
Environment:
7. Precautionary approach to environmental challenges
8. Promote greater environmental responsibility
9. Use environmentally friendly technologies
Anti-Corruption:
10. Avoid corruption (e.g., extortion and bribery)
http://www.unglobalcompact.org/

Question 4

Gobalization and the Implications for Business

Answer 4

Damage to environment
●Support for oppressive regimes
●Criticism of marketing practices (e.g., tobacco, pharmaceutical, baby formula, etc.)
●Arms trade
●Treatment of employees (e.g., sweatshops)
●Treatment of indigenous peoples
●Genetic modification of plants and animals
●Corruption and bribery
LO

Question 5

Debate Over Globalization: Supporters (Globalists)

Answer 5

Trade leads to more efficient production of better goods and services
●Better opportunities for employment and higher incomes
●Standard of living has increased
●Transfer of capital, technology, intellectual property, skilled labour

Question 6

Debate Over Globalization: Opponents (Anti-globalists)

Answer 6

●Benefits received by only a few
●Creates unemployment
●Increased poverty and inequality
●Causes periodic financial crises
●Destroys local environment
●Destroys cultures
●Violates human rights
●Questionable payments made
●Disrespect of intellectual property

Question 7

International Non-governmental Organizations (INGOs)

Answer 7

INGOs are groups that hold shared values and attitudes about the issues relating to globalization and advocate for changes to improve conditions in developing countries
●INGOs put pressure on corporations and governments
●INGOs are also referred to as transnational non-government actors (TNGOs) or transnational social movement organization (TSMOs)

Question 8

Supranational Institution:

Answer 8

: an international organization that transcends national boundaries where the member states share in decision making on particular issues pertaining to the members

Question 9

Institutions of Globalization

Answer 9

●The World Bank:
●Provides financial and technological assistance to developing countries.
●The International Monetary Fund (IMF):
●Fosters financial stability, international trade, employment, and reduction of poverty.
●International Labour Organization (ILO):
●UN agency that seeks to promote social justice and internationally recognized human and labour rights.
●World Trade Organization (WTO):
●Coordinates agreements reducing trade barriers.

Question 10

Globalization and Canadian Business and Society

Answer 10

●Pressure to forge international links
●Must meet challenges of global restructuring (e.g., R&D, education, competition policy, cost of capital, etc.)
●Attract more investment in natural resource plants
●More direct investment abroad

Question 11

International Code of Ethics for Canadian Business Principles

Answer 11

Community participation and environmental protection
●Human rights
●Business conduct (e.g., bribery and compliance with the law)
●Employee rights and health and safety
LO

Question 12

Standards of Conduct and Accountability for Global Business

Answer 12

Political factors
●Socio-cultural objectives and values
●Disclosure of information
●Competition
●Financing
●Employment and human resources
●Science and technology
●Corrupt practices
●Environmental protection
●Stakeholder consideration
●Corporate governance
LO

Question 13

Global Standards of Conduct

Answer 13

Caux Round Table: “Caux Principles”
●OECD “Guidelines for Multinational Enterprises”
●“Principles for Global Corporate Responsibility” (Interfaith organizations)
●United Nations Global Compact
●Global Reporting Initiative (GRI)

Question 14

Special Challenges of Global Business - Corruption

Answer 14

Corruption: The abuse of entrusted power for private gain (e.g., bribery)
●Bribery: making questionable payments, or bribes, to government officials to influence their decisions
●Three types of bribery assessed included:
1.bribery of high-ranking politicians or political parties
2.bribery of low-level public officials to ‘speed things up’
3.the use of personal or familiar relationships to win public contracts.

Question 15

Special Challenges of Global Business – Human Rights

Answer 15

●Human rights: The fundamental rights and freedoms to which all individuals, groups, and societies are entitled (e.g., sweatshops).
●Child labour
●Forced labour
●Discrimination
●Environment
●Working Conditions

Question 16

The Acceptance of Global Capitalism

Answer 16

Bottom of the Pyramid: Corporations should not ignore as consumers the world’s population living in poverty (4 billion people)
●Fair trade: Trading partnership which aims at sustainable development for excluded and disadvantaged producers (e.g., Fairtrade Foundation, Oxfam, and Traidcraft)
●Microfinance: Provision of financial products such as micro-credit or micro-insurance to people living in poverty (e.g., Grameen Bank in Bangladesh)