BUS202: Principles of Finance

LEARNING OBJECTIVE

• Discuss how globalization can cause ethical conflicts.

As companies extend their reach across internation boundaries, ethical issues have taken a more prominent position in discourse about the benefit of globalization. Nowhere can the legal vs. ethical divide be more pronounced than when considering international prospects, for what is legal in one jurisdiciton might be illegal in another. As different cultures attempt to work together, different values can emerge on topics such as: fair wages, working hours, child labor, environmental impact, facilitating payments, discrimination in hiring or customer base, etc. Futhermore, companies might make decisions upon where to locate their workforce based upon taxation, labor costs, or regulations.

Being sensitive to cultural differences is a good skill to foster, as attempting to understand the viewpoint of another party can allow for greater collaboration and increased opportunities. Being open to new views and ideas, however, is very different from accepting everything as relative. Many an executive has tried to explain away unethical behavior as "that's just the way they do business there". While this might be a completely true statement, this fact alone does not give a company justification for violating ethical principles. Another common trope is "if we left, another company would come in that is even worse". Choosing the best from among bad options is one thing, whereas it is very hard to support a decision on the grounds of merely being "less unethical".