Class 9-10: Social Issues in Business Flashcards
History of social issues in business
Social issues relating to business can be traced to the origins of business and capitalism. Three big issues: Working conditions, inequality, consumerism.
These issues have become more pronounced in recent years. Globalization has amplified these issues.
Globalization
The increasing movement of goods, services, and capital across national borders.
Global business system: Transnational corporations
-Firms that control assets abroad
-Over 79 000 worldwide
-Foreign direct investment
Ex. Apple, Coca-Cola, Samsung, Microsoft, GE, BMW, Disney, Pepsi, McDonalds, etc.
International, financial, and trade institutions
Organizations/institutions that support globalization
Includes international NGOs like Amnesty International.
Ex. World Trade Organization, United Nations, International Monetary Fund, World Bank, etc.
Pros of globalization
Increased trade improves efficiency, better goods and services, employment opportunities in developing countries, standard of living increase, transfer of capital, technology, and labour, stakeholder benefits.
Cons of globalization
Expansion of corporations increases role of profit in society, increasing corporate power, race to the bottom, democracy and regulatory concerns, cultural imperialism, and bribery and corruption.
Labour Conditions
Think of labour conditions in the garment industry. The Rana Plaza collapse in Bangladesh being the most famous recent example. This is a massive social issue within business, treating your workers well.
Attempts to fix labour problems within industries:
- Company level policies and programs
- Global codes of conduct for corporations
- Multi-stakeholder initiatives: reporting standards and certification standards
Company level attempts
Practices, codes of conduct, standards within individual companies that aim to address these issues. Ex. Nike, The Gap, H&M wage increase
Global codes of conduct from international organizations
The UN Global compact, OECD guidelines for multinational corporations, principles for CSR
Multi-stakeholder initiatives
Reporting standards: Global Reporting initiative (GRI)
Certification Standards: International Organization for Standardization (ISO series), Forestry Stewardship Council (FSC)
Responding to the Rana Plaza Collapse: The Accord on Fire and Building Safety in Bangladesh
Six key components:
-Five year legally binding agreement between brands and trade unions
-An independent inspection program
-Public disclosure of all factories, inspection reports, and corrective action plans.
-Brands to ensure sufficient funds are available for remediation
-Democratically elected health and safety committees
-Worker empowerment through an extensive training program, complaints mechanisms, and right to refuse unsafe work.
Walmart, The Gap, Sears, Target, The Bay, Canadian Tire made their own (Alliance for Bangladesh Worker Safety which wasn’t legally binding and firm-controlled. Way worse!)
Arguments for Inequality
- If everyone is equal, no one will ever be exceptional.
- Inequality is the mechanism through which the market generates and spreads innovation, which in turn generates opportunities for millions of individuals.
- An economy that has no wealth inequality will, most certainly, stagnate and die leaving widespread poverty behind. We want and need the right amount of wealth inequality to fuel the creative ambition that leads people to seek a better financial future.
Arguments Against Inequality
Income inequality seemingly leads to lower life expectancy, higher infant mortality rates, health and social problems, etc. Brock goes on to continually use statistics that fit his narrative, showing income inequality based on race and based on gender as well, telling us we need to feel guilty and telling us how bad our society is. Global inequality is rising!!
Consumer Capitalism
Work, buy, consume, die. A theoretical economic and socio-political condition in which consumer demand is manipulated in a deliberate and coordinated way, on a very large scale, through mass-marketing technique, to the advantage of sellers.
