Good Ethics & Globalisation
Religious Studies: OCR A Level, topic 2.6.2
Good Business Ethics and Globalisation
The idea that good ethics is good business is commonplace. Globalisation is the integration of the world economies, industries, markets, cultures and policy-making.
Ethics impacting decision-making
- Generally, customers prefer to buy from ethical businesses rather than from businesses they suspect of trying to cheat them, exploit others or cause social or environmental damage.
- The idea that good ethics is good business also extends to business decision-making.
- Google's former corporate motto, 'Don't be evil', has been replaced by 'Do the right thing'.
The impact of media exposure
- Not only will customers relate positively to the business if it 'does the right thing', but the business will be more successful if all its decisions are ethical decisions.
- Businesses are often damaged when the media exposures their unethical practices - even if they are within the law. If customers start to perceive them negatively, businesses often change what they do.
What is globalisation?
- Globalisation describes the integration of economies, industries, markets, cultures and policy-making around the world.
- Moving production from wealthier countries - such as the US and Western parts of Europe - to countries such as China and India - where the wage paid is much lower than it would be in these MEDC’s (more economically developed countries) - has rapidly increased economic development and technology.
Impact of globalisation on wages
- Although the wages that corporations pay in countries like China are far lower than the wages they would need to pay in Western countries, they are still much higher than those of rural workers, like peasant farmers in China.
- This has had enormous economic benefits for stakeholders in these emerging economies.
Reduction in poverty
- Jeffrey Sachs says that, as a result of globalisation, the number of extremely poor people in India has reduced by 200 million and by 300 million in China (The End of Poverty, 2005).
Consumer culture in Europe
- Moving production to low-wage countries has had major impacts on stakeholders in the US and Europe.
- Consumers have benefited from cheaper products, fuelling a consumer culture.
Test yourself on Good Ethics & Globalisation
Which of these is NOT a reason why businesses should or do engage in ethical practices?