A.

MAIN LESSON

Business ethics is a well-institutionalized academic field, which deals with the moral dimension of
business activity. In the context of international business, it means the treating of moral questions of international
cultures and countries. International business should be sensitive to the environment and not just selfish for its
own profits. Ethically, safety comes first and the profit comes last. The various issues that ethics target are diverse
environmental concerns, animal welfare issues, labor practices, fair trade, health concerns, genetic modification,
patenting of genes, cloning etc. International business is both more exposed to a variety of ethical conditions as
well as in a position to exploit business ethics due to the sheer size an international company has. The end result
of an ethical judgment entails its authenticity from being morally correct. But moral correction itself is a relative
concept and is based upon the cultural perceptions as well as traditions. The international market and business
arena can be ethically segmented into the die hard, the dont cares, and the various groups in between.
Companies all around the world are coming under scrutiny from governments, shareholders, customers, trade
unions, human-rights groups, and others to prove that their activities are conducted in ethical ways.

Globalization refers to the shift towards a more integrated and interdependent world economy.
Globalization has brought a lot of people into contact with the world by declining the barriers of the free flow of
goods and services, since the World War II and the dramatic technological change and development in recent
years mainly in the past three decades. This development has made the people around the world to be connected
to each other. Information and money flow quicker than ever. Products produced in one town are available to the
rest of the world. It becomes much easier for anyone to travel, communicate and do business internationally. Free
flow of goods and services has produced many opportunities for business. This whole phenomenon has been
called globalization.1

Globalization and Ethical Challenges

Smt. ChandibaiHimathmalMansukhaniCollege, Ulhasnagar, India.

Ethical Influence of Globalization on Stakeholders Business ethics propel the stakeholders of

company towards higher level of performance. Globalization provides an enabling environment in this endeavor.
Shareholders, employees, customers, suppliers, competitors, government and civil society are considered as
stakeholders of businesses. Ethical influence of globalization on stakeholders is described below in Table 1:

Table 1: Ethical influence of Globalization on Stakeholders

Stakeholders Ethical Influence

Shareholders A shareholder’s perspective of business ethics focuses on making decisions for the best interest of
the company's investors. Ethical shareholders tend to take greater responsibility for the profitability
of the company.
Employees Globalization provides better opportunities to the employees. Ethical conduct enables them to
integrate their personal goals with goals of organization.
Government Globalization enables collaborations among governments across the globe. The government can
provide better services to citizens, check corruption and enable transparency in processes.
Customers Globalization enables greater product variety to customers. They get cheaper products but learn to
use them responsibly
Suppliers Globalization enables suppliers’ better connectivity with their customers. Ethical suppliers supply
higher quality products and seek long term profitability.
Competitors All the competing companies get wider market. They can also engage in collaborations in mutually
beneficial areas.
Society Due to increasing connectivity caused by globalization, civil society is better aware of the problems
of the populace and can rapidly take up issues with the pertinent authorities

1
https://www.mbaknol.com/business-ethics/globalization-and-business-ethics/
 Ethical Issues in International Functional Areas As businesses have become increasingly internationalized, ethical
issues have emerged in international functional areas of businesses. The ethical issues faced by organizations in
international human resource management (HRM), international financial management, international marketing,
production, and information and communication technology (ICT) are presented in Table 2:

Table 2: Ethical influence of Globalization on International Functional Areas:

Globalization has presented complex challenges for international HRM. Due to cultural differences,
the commitment between employer and employees has become fuzzier. A significant challenge for
International management is to maintain objectivity in hiring, promotion, and compensation. Child labor has
Human Resource emerged as a complicated issue. Other important issues include discrimination, fraud, and sexual
Management harassment. Since past decade and half, companies like Nike, Kmart, JC Penny, Reebok, Levi
Strauss, The Gap etc. have been trying to overcome these issues but lot of progress needs to be
made.
The primary goal of management is wealth maximization for the shareholders. There is little direct
support that ethical behavior leads to shareholder’s wealth maximization. Indirect studies have
also not found any substantial relationship between corporate financial performance and social
International responsibility. But for long term sustainability, organizations should engage in ethical practices.
Financial Fairness in trading practices, trading conditions, financial contracting, sales practices, consultancy
Management services, tax payments, internal audit, external audit are the areas in which ethical financial
practices need to be followed. Other important areas are creative accounting, earnings
management, misleading financial analysis, insider trading, securities fraud, bucket shops, forex
scams etc.
In international marketing, the needs and wants of various groups vary, which leads to ethical
conflicts. Most ethical issues are related to marketing policies, communications, pricing
approaches and distribution practices. The specific ethical issues are: prudence of targeting
International vulnerable sections for consumption of redundant or dangerous products/services, transparency
Marketing about source of labor, fair treatment and fair pay to employees, product or service transparency,
appropriate product labeling, product/service safety and liability, truthful and honest advertising,
fair pricing and distribution, forthrightness in selling etc. Ethical behavior by a company in these
areas leads to positive attitudes in customers about company, its products and services.
This area of business ethics deals with the duties of a company to ensure that products and
production processes do not cause harm. Defective, addictive and inherently dangerous products
and services (e.g. tobacco, alcohol, weapons, motor vehicles, chemical manufacturing, bungee
Production jumping) are not ethical practices in production. The company should also maintain a harmonious
relationship with the environment. It is important to deal with ethical issues caused by new
technologies like genetically modified food, mobile phone radiation, health etc. Certain other
ethical issues are use of animals and disadvantaged groups as test objects.
The internet, private exchanges, global satellite linkages, RFID and other forms of new technology
hold great promise in terms of allowing global supply chains to operate more efficiently and provide
ICT faster response to demand. However, these new technologies also present some cultural and
ethical challenges to firms operating in the global environment. There may be varying views
among countries on goals, decision-making approaches, information sharing and trust and many
other cultural differences.

Activity 3: Skill-building Activities (18 mins + 2 mins checking)

A. Developmental Activity (8 mins.)

Part 1.
Instructions. Read each statement below and choose the correct answer from the given choices.
Write only the letter that corresponds to your answer on the space provided before each item.

______1. Which of the following is not a description of business ethics?

a. a form of applied ethics 
b. examines ethical principles and problems that can arise in business
c. attempts to gain more profits while practicing unjust wages
d. applies to all aspects of business conduct

______2. Under the globalization of business, which of the following stakeholders has an ethical
influence to provide better services to citizens, check corruption and enable transparency in
processes?
a. Customer b. Government c. Supplier d. Competitor

______3. An area of business ethics that deals with the duties of a company to ensure that products and
production processes do not cause harm to the consumers.
a. Marketing b. Producing c. Management d. Resourcing
Score:_____
Part 2.
What ethical influence does the government as stakeholder in business do to the people?
Discuss in not less than 3 sentences.
Ans__________________________________________________________________________________________
_____________________________________________________________________________________________

2
 _____________________________________________________________________________________________
B. Formative Assessment (10 mins.)

Instructions. Describe the ethical influence to each of the following stakeholders in business in one sentence of
not more than 12 words only. Write your answer inside the box provided for.

Answer.
Stakeholders Ethical Influence
Employees

Government

Customers

Suppliers

Competitors

Society

Score:____

Note: Check your answers against the Key to Corrections found at the end of this SAS. Write your score on your
paper. ( You can also check or consider your answers as long as your ideas are closely related to the given)

2. Activity 4: What I Know Chart, part 2 (2 mins)

Note: This serves as your review and summary of what was learned from the session. You have to monitor how
your knowledge has changed by reviewing the questions in the What I Know Chart from Activity 1.

Instructions: Write your answers to the questions based on what You now know in the third column of the
chart below.

What I Know Questions: What I Learned

(Activity 4)

What is business ethics?

What is globalization in business?

How do we influence morality in

business?

Activity 5: Check for Understanding (5 mins)

Instructions. Think and reflect the effects in business brought about by Covid-19 pandemic.

a. Give at least three adverse effects in business during the imposition of community quarantine or
lockdown? Write your answer inside the box.

1.

2.

b. Identify two or three ethical challenges being encountered by the company/employer during the said outbreak.

1.

3
 2.

Score:____
Note: (Key to Correction for this test should only be in the Teachers’ Guide and not in the SAS)

C. LESSON WRAP-UP

Activity 6: Thinking about Learning (5 mins)

Instruction. Read the quote by Henry Ford below and make an essay or a short reflection/reaction about it.

Write your essay/reaction/reflection here:

NOTE: Mark your place in the work tracker below which is simply a visual to help you track how much work you have
accomplished and how much work there is left to do. This tracker will be part of your activity sheet.