Globalisation and Business Ethics

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GLOBALISATION AND

BUSINESS ETHICS


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SUBJECT: BUSINESS ETHICS AND CORPORATE SOCIAL

RESPONSIBILITY


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ACKNOWLEDGEMENT

It gives us immense pleasure in acknowledging the valuable and co-operative assistance

extended to us by the various individuals who have helped us successfully in completing our

project.

First of all we would like to thank the Mumbai University for giving us this opportunity to

study the subject of Business Ethics.

We would also like to thank our guide ___________ for her guidance throughout the project.

We extend our sincere gratitude to the college to librarian valuable support in our project

Work we would like to thank our parents and colleagues who have during the making of the

project.

It is the encouragement of all these people that made us proceed towards achieving our goals.


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Table of Contents

1. Introduction ............................................................................................................................ 7

1.1 Business Ethics ................................................................................................................ 8

1.2 An Overview: Globalization and Business Ethics ........................................................... 8

2. Indian Ethos in Management ............................................................................................... 10

2.1 Global imperatives and indigenous ethical values in India ........................................... 10

2.2 A Macro Glance ............................................................................................................. 11

2.3 The Semantics of Business Ethics ................................................................................. 12

2.4 The Basis for Will to Ethics in Business ....................................................................... 12

2.5 Will to ethics in the practical business world ................................................................ 13

3. Concept of Culture & Types of Corporate Culture .............................................................. 15

3.1 Components of Culture .................................................................................................. 15

3.2 Cultural differences and Global Business ...................................................................... 16

3.3 Differences in Concepts ................................................................................................. 19

3.4 Ethics in the East and West ............................................................................................ 20

4. GlobalisationA Controversy ............................................................................................ 21

4.1 Relevance of Globalisation ............................................................................................ 21

4.2 Cultural Issues ................................................................................................................ 21

4.3 Legal Issues .................................................................................................................... 23

4.4 Financial Accountability Issues ..................................................................................... 24

4.5 Environmental Issues ..................................................................................................... 24

4.6 Changes in Marketing Functions ................................................................................... 25

4.7 Technological Changes .................................................................................................. 26

4.8 Role of Government ....................................................................................................... 27

4.9 Global Regulators and Standards ................................................................................... 27

5. Case Study I: The Bhopal Gas Tragedy .............................................................................. 31

5.1 Introduction .................................................................................................................... 31

5.2 A Deadly Timeline of Events ........................................................................................ 34

5.3 Problems Contributing to the Tragedy ........................................................................... 35

5.4 Solutions Implemented over the Years .......................................................................... 37

6. Case Study II: TATA Stirs Controversy in Tanzania .......................................................... 40

6.1 Introduction .................................................................................................................... 40

6.2 Community Initiatives ................................................................................................... 43

6.2.1. The Adult Literacy Project ..................................................................................... 43

6.2.2. Skills-development Programmes ........................................................................... 44

7. Conclusion .......................................................................................................................... 45


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8. Bibliography ........................................................................................................................ 46

AnnexureI: Economic Times Bhopal Gas Tragedy ......................................................... 48

AnnexureII The Times of India Will The Guys Stop Playing At Work ........................ 49

AnnexureIII Economic Times: Companies Take On Role Of Counselors ...................... 50


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1. Introduction

Globalization and business ethics is becoming an important issue and is slowly making its

way into the media and policy maker's minds. After all, globalization is a development,

which increases the internationalization of production and manufacturing, governing and

financing processes. While international economic relations are nothing new, the global

integration of production, governing and financing processes within the structures of

multinational, globally operating corporations certainly is. A final question is how

philosophical ethics can contribute to the processes described here. Can ethics set limits to

global business; indeed, is this the task it has to fulfill? Before we can really discuss global

ethics we should take just a moment to define what ethics really is.

Ethics may be referred to as some standardized form of conduct/behaviour of individuals

understood and accepted in a particular field of activity. Ethics is a mass of moral principles

or sets of values about what conduct ought to be. They give an idea what is right or wrong,

true or false, fair or unfair, just or unjust, proper or improper, e.g. honesty, obedience,

equality, fairness, etc. and respect and then doing the right thing.

Ethics is a fundamental, personal trait, which one adopts and follows as a guiding principle in

ones life. Those placed in positions of trust and recognized for their knowledge and

expertise like managers, shall perform their duty with integrity, I independence, sincerity and

honesty. That is the basic norm of professional ethics. A professional cannot justify his

failure, negligence of compromise, with excuses and explanations. Every rational human

being practices ethics for his own and others welfare and safety.

Ethical issues occur frequently in management and extend far beyond the commonly

discussed problems of bribery, collusion and theft, reaching into areas such as corporate

acquisitions, marketing policies and capital investments. For example, after the merger of

two firms, ethical question arises whether to demote or fire the employees those who have

been serving honestly for so many years.


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1.1 Business Ethics

Business ethics are rules of business conduct, by which the propriety of business activities

may be judged. Ethical principles are dictated by the society and underlie broad social

policies. These principles when known, understood and accepted, determine generally the

propriety or impropriety of business activities. Business ethics also relates to the behaviour

of the manager. It can be defined as an attempt to ascertain the responsibilities and ethical

obligations of business professionals. Here the focus is in people, how individuals should

conduct themselves in fulfilling the ethical requirements of business.

According to Carter McNamara, Business ethics is generally coming to know what is right

or wrong in the work place and doing what is right this is in regard to effects of

products/services and in relationships with stakeholders. Attention to ethics in the work place

sensitizes managers and staff to how they should act so that they retain a strong moral

compass. Consequently, business ethics can be strong preventive medicine.

1.2 An Overview: Globalization and Business Ethics

Under globalization, products are not manufactured any more in one country and then

exported, rather, products are designed and produced in production sites in various locations

around the world and financed by global investors and holding companies. A prerequisite of

globalised production is the globalization and liberalization of financial markets, which

enables or dramatically facilitates direct investment in foreign countries, like India. A flood

of mergers in the year 2000 is a good indicator for the globalization of financial investment as

well as for the global integrations of structures of production.

Globally acting corporations often promote Western ideals and images of consumption in

marketing and distribution, and they are supported in this role by the globally dominating

position of Western mass media. Globalization of markets and production, greatly diminish

the efficiency of national politics, in particular, national economic and labour market policy,

as these markets are not nationally organized anymore and can only to a limited extent be

controlled through national legislation and politics.


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Globalization must now be regarded as a fact. But for business ethics, this fact poses a severe

problem: a legal framework that would be able to govern the interactions within the global

society in both an efficient and ethical way is only beginning to be developed.

It would be nearly impossible for a business do deal with another business without some level

of ethical behavior. Cheating, lying, and squeezing the other company or country is likely to

cause great anxiety between the two parties. They may decide not to work with each other at

all.

As the global economy expands people will begin to deal more often with other from

different cultures, values, religions, and beliefs. In the business world this can be very

frustrating if we don't have enough knowledge about the other culture; even worse if we

refuse to learn anything about our business partners. Several global companies have set up

various councils in their organizations to be ethically responsible to employees.1

1See Annexure - II

Competition Business

Ethics


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2. Indian Ethos in Management

In order to understand how globalization and global values affects business ethics, or how the

two are related, we need to first understand what the Indian ethos is in business. Hence,

comparisons can be easily made in relation to India and the world.

2.1 Global imperatives and indigenous ethical values in India

The key question of ethical centrality for todays managers and leaders in India from

divergent perspectives is the global imperatives and indigenous values in India. Domination

of global economic logic as the central theme gives rise to organizational prioritization away

from ethical core and it inevitably leads to serious consequences for people, institutions and

society. In addition, the idea that managers have responsibilities extending beyond this

Globalisation& Indian Ethos

inManagement

Globalimperatives

and indigenousethical values

in India

A Macro Glance

The Basis forWill to Ethicsin Business

The Semanticsof Business

Ethics

Will to ethics in

the practicalbusiness world


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economic logic needs to be a central theme of organizational sustainability. The societal level

ethics and social responsibilities are not easily distinguished in countries like India. The

internal politics, procedures and administrative behavior often reflect the values of the

managerial elite. Indian organizations have received wide spread negative rankings in various

global, regional, national surveys on corporate integrity and managerial probity in recent

decades. This part highlights the ethical gap common in Indian organizations.

The need for ethical analysis along economic, technical, financial and other decision

parameters are very important managerial priority. One of the most prominent scholars in

managerial ethics in India, S.K.Chakraborty, views the broad scene from a kaleidoscope of

long tradition of Indian heritage. One of the key themes is the distinction between intellectual

ethics and consciousness ethics. He extends the meaning and content of the number of related

issues a range of practical ethical challenges. Increasing the global linkages and

professionalization of managerial cadre is creating a new imperative of ethical imagination

and deepening of managerial roots. While has been extensive theoretical and practical debate

and discussion on role of corporate governance in East Indian societies, powerful indigenous

doctrines of Indian tradition have not been significantly featured in the literature on business

ethics. Given the reality and perception of the managerial ethics in India ,a great deal of

progress is urgently needed in this area .linking the modern corporate context to traditional

Indian values and ethical roots is a blue print that needs further attention.

2.2 A Macro Glance

A few initial, general points are worthwhile. Systematic empirical investigation in the field

has yet to start in India. In fact, until the year 1992, ethics in business was hardly a topic of

concerted engagement at any level except in two or three business schools in the country. It

was the only 2 billion dollar stock exchange fiasco in 1992 which threw up the ethics issue at

the macro level. Since then, investigate journalism has been playing a key role in highlighting

corrupt and fraudulent practices within the business politics criminals (BPC) triangle.

Presently the citizens are hopefully looking up to the assertive judiciary as the ultimate resort

in these ethically troubled times. The competitive fray among global corporations to enter the

Indian economy, and the eager overtures of Indian business to grow fast through


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collaborations with them, have begun to manifest fresh varieties of business non-ethics .the

possibility of a two way traffic is not imaginary: business veering towards criminals and

criminals veering towards business.

2.3 The Semantics of Business Ethics

The phrase black market ruled into circulation during the second world war and has

remained since that time it denotes the process of clandestine cells of scarce ,rationed

,controlled commodities at inflated prices .since 1992 the two words scam and scandal

have become very common .they cover corrupt financial /economic practice of vast

magnitude affecting large section of the public .the B-P-C triangle has being prominently

involved in these episodes .business enterprises themselves ,with some highly honorable

exception ,often consider such practices to be part of the normal business process.

Whatever recent efforts the business community has been making seem all to be directed

towards offering better deal to domestic consumers in respect of consumables and consumer

durables. Consciousness of ethical imperatives in international business remains to be

separately attended to at least in terms of articulated norms and guidelines.

2.4 The Basis for Will to Ethics in Business

A mute minority feels that a true long term challenge for several major Indian business and

financial sectors is: how far is it ethical to spread greed for goods and mercenaries for money

in the name of business growth, economic development, and higher living standards? In fact,

to make the point sharper, it is ethical to pronounce on higher standard of living when it is

really higher standard of consumption which is being espoused?

Another general ethical problem relates to social consequences of employment contraction in

man power intensive basic industries .modern capital intensive technology replacing older

technologies is a process not without severe social psychological fallout in a highly

populated country like India. The ethical issue is: global economical competitiveness or local


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3. Concept of Culture & Types of Corporate Culture

Culture, today, is being defined as an intellectual or moral discipline and training, a state of

intellectual and artistic development or a historically transmitted pattern of meanings. Culture

has also been described as a set of rules, values and beliefs good or badwhich community

adopts as its norms.

3.1 Components of Culture

Communication: Some cultures are polite and gracious, others are demanding.

Language: Language can become confusion or convey clear meaning.

Dress and Appearance: Dress and appearance identify culture. Arabs wear a

particular type of dress. Indian women wear saris.

Food Habits: Food habits typify a culture, for example, Pizza is cherished in Italy,

Dosa in India.

Time: Time consciousness forms punctuality of Japanese or Americans contrary to the

flexible attitude towards time of Arabs and Indians.

Rewards and Recognition: Rewards and recognition differ from country to country,

for example, giving 15% of fare tip to taxi driver in USA is customary, and in India it

is optional.

Values and Norms: Values and norms are different in different countries due to their

societal or political or religious background. E.g. attitude towards corruption vary in

Germany and Italy.

No two cultures are the same. The Western and Indian cultures have very vast differentiation

between them. While the culture of west is a mixture of different cultures, the Indian culture

is unique and has its own values.


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One of the major differences that can be seen between western and Indian culture is in family

relations. While the Indians are very much family oriented, the people there are individual

oriented. In Indian culture, the family values are given more prominence than the individual

values. Indians respect family values. On the other hand, in western culture the individual

values get prominence than the family values. Indians are more committed to their family

where as in the west; people are more committed to themselves only.

In another sense, it can be said that the western culture is more goal oriented and the Indian

culture is more people or family oriented. Indians may even forsake their individual wishes

and also happiness for the sake of families. But in western culture, this trend cannot be seen.

Unlike the Indians, they plan things ahead. They believe in dominating nature and controlling

the world around them. On the contrary, Indians believe in the harmony with nature.

Another difference that can be seen between Indian culture and western culture is that the

Indians love stability where as they love mobility. In western culture, one can see that the

individuals think of self-reliance and independent. On the other hand, Indians are more

dependent on others. While the children in the US are brought up to live an independent life,

the children in India are not brought up in that way.

In Indian culture, there is respect for the elders and it is they who make decisions. But in

western culture, each individual makes his own decisions.

Coming to competition, Indians are more competitive than the Americans. Coming to work

nature, the Indians work for meeting the family needs. On the contrary, in the west they will

only strive to rise on their own capacity or getting rich. Another difference that can be seen is

that westerners have great regard to time and its value.

3.2 Cultural differences and Global Business

In this process of globalization of economy, it is natural to envisage initial spurt in trade and

commerce as far as international interaction is concerned. But sooner than later other cultural

aspects also come under its purview. They are grouped under the 'cultural exchange


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programs'. These include globalization of scientific and technological research, involvement

in games and sports, and exchanges in various aspects of art and literature. Globalisation of

business can have cultural dilemmas. Whenever foreign entities enter a country or a region it

faces a lot of different problem. More so cultural differences are also important reasons for

these problems.

The culture of the foreign company and the country in which it is operating are different. The

business standards followed, code of conduct, policies are different. Further more in a

country like India, societal interests are to be kept in mind while taking any decisions. Here

an individuals ethics if compared to other countries are more rooted to moral behavior

towards those who are family and interestingly everybody is considered as family. However,

if you ask a foreigner everybody is family they wont understand why so. This is because

Indian culture speaks of considering everybody as family. There are different thought, ideas,

practices, languages, concepts which a global business needs to adopt or it can push its own

into the foreign land. The communitys moral outlook should be kept in mind.

For example, in the film industry previously the actors apparel used be more traditional but

today western influence has popularized modern dressing style i.e. western style and the

Indian outfits are almost out and forgotten. So have they adopted the global dressing style or

has it been pushed onto them?

This is the downside of globalisation. It can completely change the practices n cultures of

people. It takes away the unique identity a country or a region has. And thats why they say

globalisation means making the world one small village where everybody and everything

becomes uniform.

Global companies need to follow either the global acceptable standards or those which exist

in the foreign land that they are operating in. If and Indian company is operating abroad

suppose in Germany, then they have to follow and use German in speech, documents etc. and

understand the culture over there. Regulating bodies are setup in the countries that regulate

the conduct and business of foreign companies in their country.

Global entities require the thorough study of the environment and the culture so that adopting

the changes doesnt take a toll over the natives lives, thoughts, beliefs and societal norms. If

they fail to do this there will be barriers created leading to conflicts and misunderstanding


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and the whole idea of globalisation for development will be going into pits and be harming to

the society.

It is believed that globalization leads to exploitation of not only the weaker nation, but of

weaker section in a given nation as well. Thus we see both international and intra-national

resistance to the attempts at globalization. A strong reaction or backlash of 'nationalism'

therefore, may raise its head in certain pockets of the world. Such voices of protectionism are

heard mainly in poor and under-developed nations.

However, even though it may cause initial setbacks, the process of globalization cannot be

halted. By its very nature it is a progressive (or ongoing) step in the evolution of human

economic dreams. But at the same time, globalization is also responsible for spread of

religious ideas and cultural traditions from one place to another. Initially it may appear that

economically strong nation dominates and entrusts its religious ideas over the weaker nations,

but in the long run globalization will prove to be beneficial; as powerful and true religious

ideas find seekers of truth from various places.

As globalisation advances, business practices become increasingly uniform. Business

education is same everywhere. Managers from diverse countries approach business in similar

ways. Unlike business skills which are the same worldwide. Peoples conceptions of ethical

conduct remains rooted in particular cultures. The importance of cultural differences is not

confined to the problems of different standards. What is considered right and wrong varies as

culture varies. Hence the differences in different cultures pose a challenge for global

business.


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3.3 Differences in Concepts

The meanings of these concepts have changed within our own culture over the course of time.

Hence we cannot assume that our conceptions of rights, for example, are shared by people

everywhere.

Different cultures place different emphasis on these concepts

Cultural differences occasionally result in misunderstandings and accusations of

misconduct.

For example, Japanese companies sometimes show favoritism to other Japanese firms,

mistreating potential foreign business partners. Japanese response is that they are showing

loyalty to companies in long established relationship whereas foreign firms are criticized

other way. Whistle blowing is viewed negatively in Japan, where in US it is often considered

a mark of integrity and moral courage.

While conducting the business globally, it is essential to understand the ways in which the

cultural differences are reflected in peoples moral outlook. It is also seen how European and

Asian Managers appreciate and view ethics as critical for successful interaction with them, as

a recognition of how America is distinctive.


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3.4 Ethics in the East and West

EAST WEST

Central Role of Long Term Relationships

High level of trust among all parties,

maintenance of harmony.

Self interests are watched and others are

secondary

Employee Loyalty

Employees are very loyal to the firm they

are appointed so much so that they will

stick to one company all their lives.

Employee moves from firm to firm.

Societal Relationship basis

Relationships is relative or situational Relationship is absolute and universal

Moral Decisions

Moral decisions are made on a case by

case basis with attention to specifics

Known rules that is applied equally to all.

Systems built on relationships

Reciprocity found; Returning all favors

received to preserve a balance: conflicts

handled by mutual accommodation.

A company takes more than a fair share is

viewed as disruptive, untrustworthy;

binding to each other

Tend to make sincere but overly optimistic

commitments that they may not be able to

keep. A source of misunderstanding

sometimes.

Opinions and decision taken

By a group By Themselves

Errant Managers face

Low legal actions High legal actions (includes fines,

imprisonment)


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4. GlobalisationA Controversy

4.1 Relevance of Globalisation

Globalisation as defined in terms of the deterritorialization of economic activities is

particularly relevant for business ethics. Deterritorialization may mean to take the control and

order away from a land or place (territory) that is already established. Global

communications, global products, and global financial systems and capital markets are only

the most striking examples of deterritorialization in the world economy. There are many other

areas where globalization in this sense is a significant social, economic, and political process.

As we shall now see, globalisation also has significant implications for business ethics.

4.2 Cultural Issues

As business becomes less fixed territorially, so corporations increasingly engage in overseas

markets, suddenly finding themselves confronted with new and diverse, sometimes even

contradicting ethical demands. Moral values, which were taken for granted in the home

market, may get questioned as soon as corporations enter foreign market. For example,

LimitedResources

Wideningof WorldEconomy

Globalisation


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attitudes to racial and gender diversity in India may differ significantly to those in Middle

Eastern countries. Similarly, Chinese people might

regard it as more unethical to sack employees in times of economic downturns than would be

typical in Europe. Again, whilst Europeans tend to regard child labour as strictly unethical,

some Asian countries might have a more moderate approach.

The reason why there is a potential for such problems is that whilst globalisation results in the

deterritorialization of some processes and activities, in many cases there is still a close

connection between the local culture, including moral values, and a certain geographical

region.

For example, Europeans largely disapprove of capital punishment, whilst many Americans

appear to regard it as morally acceptable. This is one of the contradictions of globalisation: on

the one hand globalization makes regional difference less important since it brings regions

together and encourages a more uniform global culture. On the other hand, in eroding the

divisions of geographical distances, globalization reveals economic, political, and cultural

differences and confronts people with them.

CulturalIssues

MoralValues of

Company

LocalCulture

ReginalDifference

Religion

Language


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4.3 Legal Issues

A second aspect is closely linked to what the relation of ethics and law. The more economic

transactions lose their connection to a certain regional territory, the more they escape thecontrol of the respective national governments. The power of a government has traditionally

been confined to a certain territory, for example: French laws are only binding on French

territory, UK laws on UK territory, and so on. As soon as a company leaves its home territory

and moves part of its production chain to, for example, a third world country, the legal

framework becomes very different.

Consequently, managers can no longer simply rely on the legal framework when deciding onthe right or wrong of certain business practices. If, business ethics largely begins where the

law ends, then deterritorialization increases the demand for business ethics because

deterritorialized economic activities are beyond the control of national (territorial)

governments.

For example, global financial markets are beyond the control of any national government,

and the constant struggle of governments against issues such as child pornography on the

internet shows the enormous difficulties in enforcing national laws in deterritorialized spaces.

LegalIssues

Different

Laws inHome

country

DifferentLaws in Host

country

Policies ofthe Company

Practices ofthe

Government


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4.4 Financial Accountability Issues

Taking a closer look at global activities, one can easily identify corporations as the dominant

actors on the global stage: MNCs own the mass media which influences much of theinformation and entertainment we are exposed to, they supply global products, they pay

peoples salaries, and they pay (directly or indirectly) much of the taxes that keep

governments running. Furthermore, one could argue that MNCs are economically as

powerful as many governments. For example, the GDP of Denmark is about the same as the

turnover of General Motors.

However, whereas the Danish government has to be accountable to the Danish people and

must face elections on a regular basis, the managers of General Motors are formally

accountable only to the relatively small group of people who own shares in the company. The

communities in the US, Brazil, or Germany that depend directly on General Motors

investment decisions however have next to no influence on the company and, unlike a

regional or national government, General Motors is, at least in principle, not accountable to

these constituencies.

4.5 Environmental Issues

It is not a material fact that through the adoption of new technological and commercial

practices we are creating problems and inviting dangers to the sustainability of a healthy

global system. At the same time that these new challenges of globalisation have emerged,

considerable interest has also been directed towards the development of new ways of

addressing the diverse impacts of business in society. Many of these impacts are far-reachingand profound. To mention just a few, one only needs to think of impacts such as:

The environmental pollution caused by the production, transportation, and use of

products such as cars, refrigerators, or newspapers.

The ever increasing problems of waste disposal and management as a result of

excessive product packaging and the dominance of throwaway culture.

The devastating consequences for individuals and communities as a result of plant

closures and downsizing.The erosion of local cultures and environments due to the influx of mass tourism.


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Trade between two countries causes environmental harm. Promotion of economic growth

without environmental safeguards results in the unsustainable consumption of natural

resources and waste production.

Liberalisation of the markets leads to access agreements which can override environmental

regulations. The global business operations and activities need to be promoted towards

worldwide environmental protections and not in harming it. Restrictions should be abided.

However today there has been an attitudinal shift and the world leaders have been showing

concerns for the globe and the human race.

4.6 Changes in Marketing Functions

Traditionally marketing was known as the process of effecting change in the ownership and

possession of goods and services to achieve the firms objectives. This is narrow and

ENVIRONMENTAL POLLUTION

Excessive Production

Tranportation

PROBLEMS OF WASTEMANAGEMENT

excessive product packageing

dominance of "throwaway culture"

ENVIRONMENTAL HAZARDS

Improper Plant ClosuresIndividuals And Communities faceingproblem of downsizing

DEPLETION OF RESOURCES

Mass TourismUnrestrictive use of resources

ENVIRONMENTALISSUES


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incomplete interpretation of marketing and represents product orientation. It stressed on

selling whatever has been produced by a business concern without caring for the needs and

demands of the customers. Globalisation has changed this traditional concept. It is now

recognized that the creation of customer and satisfaction of his wants justify the existence of

a business. Business men have realized that Consumer is the King and his satisfaction

depends on the success of the firm.

4.7 Technological Changes

With the increasing globalisation of international business, the high technology sector has

become a major segment of foreign trade. Such industries as the semi-conductor chips,

commercial aircrafts and engines, and industrial robots have become the battleground where

firms fight to increase their market share to survive and prosper in international competition.

The competitive environment that international business faces is to a certain extent a function

of the technological environment and the degree of technological innovations attributed to the

competitive environment.

Traditional

Marketing Selling whatever is

produced.

Ignoring the needsand demands of thecustomer

ModernM

arketing Consumer is the

'King'.

Satisfaction ofcustomer isultimate goal.


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Technological change and worldwide flow of information are fundamentally reshaping how

companies and nations do business. The pressure of technological competition increasingly

drives corporations towards global strategies while stimulating nationalistic impulses to

protect and secure the national technology base from international activities.

4.8 Role of Government

The gradual emergence of multinational networks integrated by large organizations is the

outcome of the co-evolution between the structures of international organizations and

opportunities of the international environment.

Governments have hardly faded away amidst these changes, and attempts to regulate the

entry and behavior of multinational corporations have posed, and continue to pose, a threat of

conflict between the firm and the host nation.

The world has moved from interdependence to integration, the challenge to government

policy has shifted from interdependence to integration; the challenge to government policy

has shifted from regulation of the firm to more fundamental problems, as to whether broaderpolitical and social agenda can be realized in an environment of mobile capital and integrated

world production.

4.9 Global Regulators and Standards

Globalisation has made it necessary that global regulatory bodies be set up. Institutions like

World Trade Organisation (WTO), World Health Organisation (WHO), South-Asian

Association for Regional Cooperation (SAARC), United Nations Educational, Scientific, and

Cultural Organisation (UNESCO), International Monetary Fund (IMF) etc. Global Standards

are followed by businesses while providing their services. ISO International Standards

Organizations Certification is accepted by people everywhere today. Control Objectives for

Information and related Technology (COBIT) is a set of best practices for information

technology.


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GLOBALREGULATORY

BODIES

WTO

WHO

UNESCO

IMF


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4.10 Impacts of Globalization on Different Stakeholders:

STAKEHOLDERS ETHICAL IMPACTS OF GLOBALIZATION

Shareholders Globalization provides potential for greater profitability, but

also greater risks. Lack of regulation of global capital markets,

leading to additional financial risks and instability.

Employees Corporations outsource production to developing countries in

order to reduce costs in global marketplace this provides jobs

but also raises the potential for exploitation of employees

through poor working conditions.

Consumers Global products provide social benefits to consumers across the

globe but may also meet protests about cultural imperialism

and westernization. It can bring cheaper prices to customers,

exploitation by MNCs.

Suppliers and

Competitors

Suppliers in developing countries face regulation from MNCs

through supply chain management. Small scale indigenous

competitors exposed to powerful global players.

Civil society (pressure

groups, NGOs, local

communities).

Global business activities bring the company in direct

interaction to local communities with possibility for erosion of

traditional community life; globally active pressure groups

emerge with aim to police the corporation in countries where

governments are weak.

Government and

regulation.

Globalization weakens governments and increases the

corporate responsibility for jobs, welfare, maintenance of

ethical standards, etc. It also confronts governments with

corporations from different cultural expectations such as

bribery, corruption, taxation, and philanthropy.


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To summarize the controversial debate of globalization and business ethics, the following

issues have become essential during globalization:

Violation of Copyrights & Software laws

Environmental Pollution

Dumping of wastes Air pollution

Discrimination

Race Gender National origin Religious beliefs

Violation of Human Rights

Corruption

Not Adhering to Labour Laws

Low Wages Child Labour Unsafe working conditions


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5. Case Study I: The Bhopal Gas Tragedy

5.1 Introduction

The Bhopal disaster or Bhopal Gas Tragedy is the world's worst industrial catastrophe. It

occurred on the night of December 2-3, 1984 at the Union Carbide India Limited (UCIL)

pesticide plant in Bhopal, Madhya Pradesh, India. At that time, UCIL was the Indian

subsidiary of the U.S. Company Union Carbide Corporation (UCC), which is now a

subsidiary ofDow Chemical Company. Around midnight on December 23, 1984, there was

a leak of methyl isocyanate (MIC) gas and other toxins from the plant, resulting in the

exposure of over 500,000 people.

Government agencies estimate 15,000 deaths. Others estimate that 8,000 died within the first

weeks and that another 8,000 have since died from gas-related diseases. A government

affidavit filed in the Supreme Court in 2006 stated that of the 558,125 cases of injury

resulting from the disaster, 516,406 (92.5%) were minor, 38,478 (6.8%) were temporary

partial disablement while 0.7% (~3,900) were severely and permanently disabled.

Some 26 years after the gas leak, 390 tons of toxic chemicals abandoned at the UCIL plant

continue to leak and pollute the groundwater in the region and affect thousands of Bhopal

residents who depend on it, though there is some dispute as to whether the chemicals still

stored at the site pose any continuing health hazard.
http://en.wikipedia.org/wiki/Union_Carbide_India_Limitedhttp://en.wikipedia.org/wiki/Pesticidehttp://en.wikipedia.org/wiki/Bhopalhttp://en.wikipedia.org/wiki/Madhya_Pradeshhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Union_Carbidehttp://en.wikipedia.org/wiki/Dow_Chemical_Companyhttp://en.wikipedia.org/wiki/Methyl_isocyanatehttp://en.wikipedia.org/wiki/Toxinhttp://en.wikipedia.org/wiki/Groundwaterhttp://en.wikipedia.org/wiki/Groundwaterhttp://en.wikipedia.org/wiki/Toxinhttp://en.wikipedia.org/wiki/Methyl_isocyanatehttp://en.wikipedia.org/wiki/Dow_Chemical_Companyhttp://en.wikipedia.org/wiki/Union_Carbidehttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Madhya_Pradeshhttp://en.wikipedia.org/wiki/Bhopalhttp://en.wikipedia.org/wiki/Pesticidehttp://en.wikipedia.org/wiki/Union_Carbide_India_Limited


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Over two decades since the tragedy, certain civil and criminal cases remain pending in the

United States District Court, Manhattan and the District Court of Bhopal, India, against

Union Carbide with an Indian arrest warrant also pending against Warren Anderson, CEO of

Union Carbide at the time of the disaster. Greenpeace asserts that as the Union Carbide CEO,

Anderson knew about a 1982 safety audit of the Bhopal plant, which identified 30 major

hazards & accidents that occurred over a period of years before the tragedy and that they

were not fixed in Bhopal but were fixed at the company's identical plant in the US.

It is estimated that 20,000 have died since the accident from gas-related diseases. Another

100,000 to 200,000 people are estimated to have permanent injuries.

The quality of the epidemiological and clinical research varies. Reported and studiedsymptoms are eye problems, respiratory difficulties, immune and neurological disorders,

cardiac failure secondary to lung injury, female reproductive difficulties and birth defects

among children born to affected women.

By the end of 2009, it was estimated that 25,000 had died and around 600,000 people were

affected due to gas-related disorders. In June 2010, seven ex-employees, including the former

chairman of UCIL, were convicted in Bhopal of causing death by negligence and sentenced

to two years imprisonment and a fine of about $2,000 each, the maximum punishment

allowed by law. An eighth former employee was also convicted but had died before judgment

was passed.

The Dow Chemical Company purchased Union Carbide in 2001 for $10.3 billion in stock and

debt. Dow has publicly stated several times that the Union Carbide settlement payments have

already fulfilled Dow's financial responsibility for the disaster. However, contrary to the

belief that Dow should be equally responsible for the disaster, Dow did not purchase UCC'sIndian subsidiary, Union Carbide India Limited (UCIL). That was sold by UCC in 1994 and

renamed Eveready Industries India limited.

Factors leading to the disastrous gas leak include:

The use of hazardous chemicals (MIC) instead of less dangerous ones

Storing these chemicals in large tanks instead of over 200 steel drums.

Possible corroding material in pipelines
http://en.wikipedia.org/wiki/Warren_Anderson_%28chairman%29http://en.wikipedia.org/wiki/Dow_Chemical_Companyhttp://en.wikipedia.org/wiki/Dow_Chemical_Companyhttp://en.wikipedia.org/wiki/Warren_Anderson_%28chairman%29


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Poor maintenance after the plant ceased production in the early 1980s

Failure of several safety systems (due to poor maintenance and regulations).

Safety systems being

switched off to save

moneyincluding the

MIC tank refrigeration

system which alone

would have prevented

the disaster.

The wrecked MIC plant that caused at least

10,000 have died in the years that have

passed, and 10 more are dying every month

due to exposure-related diseases.

The problem was made worse by the plant's

location near a densely populated area,

non-existent catastrophe plans and

shortcomings in health care and socio-economic rehabilitation. Analysis shows that the

parties responsible for the magnitude of the disaster are the two owners, Union Carbide

Corporation and the Government of India.

Announcing the verdict in a local court, Chief judicial magistrate Mohan Tiwari stated that

An American corporation cynically used a third world country to escape from the

increasingly strict safety standards imposed at home. This appeared to give an indication of

the sentencing severity to come, however the court went on to convict the seven accused

guilty of criminal negligence


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And the sentence of a fine of 100,000 rupees each and jail for two years! To add insult to

injury, the convicted walked out within hours of the sentencing as they were all granted

bail.

5.2 A Deadly Timeline of Events

December 3, 1984Shortly after midnight, methyl isocyanate gas leaked from a tank

at Union Carbide Indias Bhopal plant. A FIR was filed with the police. According to

the estimate of government agencies about 15,000 people die and several thousands

were maimed.

December 4, 1984 Warren Anderson, then CEO of Union Carbide Corporation

(UCC). Came to India and was arrested. However, he was later released on bail. Mr.

Anderson went to the US and never returned. Several others accused, including Union

Carbide Indian chairman Keshub Mahindra, were also arrested.

December 6, 1984The case was transferred to the CBI.

March 1985 The government enacted the Bhopal Gas Leak Disaster Act that

enabled it to act as the legal representative of the victims in claims arising of or

related to the disaster.

April 1985Union Carbide offered $5 million for a relief fund before a US district

court but the Indian government rejected the claim and demanded $3.3 billion instead.

May 1986All litigations against Union Carbide were shifted to Indian courts by the

US district court judge, which was appealed against.

January 1987The US Court of Appeals affirmed the transfer of litigation

December 1, 1987 The CBI filed the charged sheet after investigation. The chief

judicial magistrate subsequently framed charges against the accused under the Section

304 Part (II) (culpable homicide not amounting to murder), Section 326 (voluntarily

causing grievous hurts by dangerous weapons or means) and other sections of Indian

Penal Code.

January-December 1988 Arguments and appeals went on throughout the year

before the Indian Courts regarding compensation for the victims.

November 1988 The Supreme Court of India asked the Government of India and

Union Carbide to settle the matter of compensation to the victims.


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February 1989 The Indian government and Union Carbide arrived at an out-of-

court settlement and the latter was to give $470 million by March 31, 1989.

1992 Part of the $470 million was disbursed among victims. Mr. Anderson was

declared fugitive from law for ignoring court summons.September 13, 1996The Supreme Court amended the charges against the accused

to 304(A) (causing death by negligence), 336(acts endangering life or personal safety

of others), 337 (causing hurt by endangering life or personal safety of others) and

other sections of IPC, which attract a maximum punishment of two years

imprisonment.

July 2004 The Supreme Court of India ordered the release of remaining settled

funds to victims, 15 years after reaching settlement.

June 7, 2010 All eight accused -- Keshub Mahindra, then UCIL chairman, Vijay

Gokhale, managing director, KishoreKamdar , vice president, J Mukund, works

manager, SP Choudhary, production manager, KV Shetty, plant superintendent, S L

Qureshi, production assistant of UCIL held guilty for the disaster after 26 years of

tragedy. One of the accused RB Roy Choudhary, then former assistant works

manager of Union Carbide India, died during the trial.2

5.3 Problems Contributing to the Tragedy

1. No maintenance supervisor was placed on the night shift and instrument readings were

taken every two hours, rather than the previous and required one-hour readings in order to

cut down cost.

2. The operators chose a dangerous method of manufacturing pesticides, there was large-scale

storage of MIC before processing, the location of the plant was close to a densely

populated area, there was under-dimensioning of the safety features, and the plant

depended on manual operations.

3. Deficiencies in the management of UCIL were also identified. There was a lack of skilled

operators due to the staffing policy, there had been a reduction of safety management due

2See Annexure - 1


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to reducing the staff, there was insufficient maintenance of the plant and there were only

very loose plans for the course of action in the event of an emergency.

4. It emerged in 1998, during civil action suits in India that, unlike Union Carbide plants in

the US, its Indian subsidiary plants were not prepared for problems regarding equipment

or safety regulations. No action plans had been established to cope with incidents of this

magnitude. This included not informing local authorities of the quantities or dangers of

chemicals used and manufactured at Bhopal.

5. The MIC tank alarms had not worked for four years.

6. There was only one manual back-up system, compared to a four-stage system used in the

US.

7. The flare tower and the vent gas scrubber had been out of service for five months before

the disaster. The gas scrubber therefore did not treat escaping gases with sodium

hydroxide (caustic soda), which might have brought the concentration down to a safe

level. Even if the scrubber had been working, according to investigations in the aftermath

of the disaster discovered that the maximum pressure it could handle was only one-

quarter of that which was present in the accident. Furthermore, the flare tower itself was

improperly designed and could only hold one-quarter of the volume of gas that was

leaked in 1984.

8. To reduce energy costs, the refrigeration system, designed to inhibit the volatilization of

MIC, had been left idlethe MIC was kept at 20 degrees Celsius (room temperature), not

the 4.5 degrees advised by the manual, and some of the coolant was being used

elsewhere.

9. The steam boiler, intended to clean the pipes, was out of action for unknown reasons.

Slip-blind plates that would have prevented water from pipes being cleaned from

leaking into the MIC tanks through faulty valves were not installed. Their installation

had been omitted from the cleaning checklist.
http://en.wikipedia.org/wiki/Sodium_hydroxidehttp://en.wikipedia.org/wiki/Sodium_hydroxidehttp://en.wikipedia.org/wiki/Room_temperaturehttp://en.wikipedia.org/wiki/Room_temperaturehttp://en.wikipedia.org/wiki/Sodium_hydroxidehttp://en.wikipedia.org/wiki/Sodium_hydroxidehttp://en.wikipedia.org/wiki/Sodium_hydroxide


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10. Water sprays designed to "knock down" gas leaks were poorly designedset to 13

meters and below, and they could not spray high enough to reduce the concentration of

escaping gas.

11. The MIC tank had been malfunctioning for roughly a week. Other tanks had been used

for that week, rather than repairing the broken one, which was left to "stew". The build-up

in temperature and pressure is believed to have affected the magnitude of the gas release.

12. Carbon steel valves were used at the factory, even though they corrode when exposed to

acid. On the night of the disaster, a leaking carbon steel valve was found, allowing water

to enter the MIC tanks. The pipe was not repaired because it was believed it would take

too much time and be too expensive.

13. UCC admitted in their own investigation report that most of the safety systems were not

functioning on the night of December 3, 1984.

5.4 Solutions Implemented over the Years

1. A clinic established by a group of survivors and activists known as Sambhavna establishedin 1995. Sambhavna is the only clinic that will treat anybody affected by the gas, or the

subsequent water poisoning, and treats the condition with a combination of Western and

traditional Indian medicines, for a period of 8 years of free treatment.

2. Having adopted some measures to control the disaster, UCC initiated an effort to identify

the cause. It took permission from the government to clean up the site and carried out the

work under the direction of state and central government authorities.

3. Widow pension of the rate of Rs 200/per month (later Rs 750) was provided in the year

1990. However the amount of the pension rate is paltry and should thus be revised.

4. The average compensation works out to Rs 12,410 per victim at the 1989 value of the

rupee. Compared to this, the US government paid an average of $1.8 million per victim of

9/11, One-time ex-gratia payment of Rs 1,500 to families with monthly income Rs 500 or

less was decided.


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Each claimant was to be categorized by a doctor. In court, the claimants were expected to

prove "beyond reasonable doubt" that death or injury in each case was attributable to

exposure. In 1992, 44 percent of the claimants still had to be medically examined.

5. From 1990 interim relief of a mere Rs 200 was paid to everyone in the family who was

born before the disaster.

6. The final compensation (including interim relief) for personal injury was for the majority

Rs 25,000 (US$ 830). For death claim, the average sum paid out was Rs 62,000.

7. Effects of interim relief were more children from the affected area are sent to school, more

money spent on treatment, more money spent on food, improvement of housing condition.

8. Occupation rehabilitation: It is estimated that 50,000 persons need alternative jobs, and that

less than 100 gas victims have found regular employment under the government's scheme.

9. Habitation rehabilitation: 2,486 flats in two- and four-story buildings were constructed in

the "Widows colony" outside Bhopal. However the facilities provided to them are very

poor. The water did not reach the upper floors. It was not possible to keep cattle.

Infrastructure like buses, schools, etc. was missing in the area for at least a decade.

10. Compensation from Union Carbide

a) The Government of India passed the Bhopal Gas Leak Disaster Act that gave the

government rights to represent all victims in or outside India.

b) UCC offered US$ 350 million, the insurance sum. The Government of India claimed

US$ 3.3 billion from UCC. In 1999, a settlement was reached under which UCC agreedto pay US$470 million (the insurance sum, plus interest) in a full and final settlement of

its civil and criminal liability.

c) When UCC wanted to sell its shares in UCIL, it was directed by the Supreme Court to

finance a 500-bed hospital for the medical care of the survivors. Bhopal Memorial

Hospital and Research Centre (BMHRC) was inaugurated in 1998. It was obliged to give

free care for survivors for eight years.


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11. However On 24 June, 2010 Group of Ministers for Bhopal Gas tragedy case announced a

Rs1265cr package. The Union Cabinet, which considered the report of the Group of

Ministers on the 1984 disaster, accepted all its 22 recommendations.

The Cabinet meeting, chaired by Prime Minister Manmohan Singh, decided that ex-gratia

of Rs 10 lakh would be given to the kin of each killed in the tragedy, Rs 5 lakh to those

who suffered permanent disability, Rs two lakh each to people who suffered cancer and

total renal failure and Rs one lakh to those with temporary disability.

The ex-gratia would benefit 45,000 affected people and the amount would be paid after

adjusting the compensation already paid, Soni said. The government also announced

various packages for remediation, rehabilitation and other measures, taking the total

spending to Rs 1265.56 crore.

The Cabinet decided that additional material in support of the request for extradition of

Anderson may be put together by concerned agencies and the External Affairs Ministry

would thereafter press the request for extradition with the US government, she said. India

had made requests for Anderson's extradition (To give up the legal jurisdiction of a

fugitive to another government) earlier, the last being in 2008, but these have not been

entertained by the US.
http://en.wikipedia.org/w/index.php?title=Group_of_Ministers_for_Bhopal_Gas_tragedy_case&action=edit&redlink=1http://en.wikipedia.org/wiki/Indian_Rupeehttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Indian_Rupeehttp://en.wikipedia.org/w/index.php?title=Group_of_Ministers_for_Bhopal_Gas_tragedy_case&action=edit&redlink=1


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6. Case Study II: TATA Stirs Controversy in Tanzania

6.1

Introduction

Tata is at the forefront of India's economic push into Africa, which has until now been

overshadowed by China's huge investments and loans on the continent. The conglomerate

boasts of having a "significant presence in almost all the major industrial sectors" in Africa.

In east Africa, where the large Asian population has also ensured close cooperation with

India for decades, the company carries significant influence with local trade officials eager

for foreign investment.

Among other businesses, Tata processes coffee in Uganda, assembles vehicles in Kenya and

builds agricultural machinery in Tanzania. But as the Chinese companies have learnt,

operating in Africa brings with it scrutiny from environmental and other watchdog groups.

In Uganda, plans by the Mehta Group, another large Indian industrial company, to clear a

quarter of a protected forest reserve in order to plant sugar cane triggered violent anti-Asian

protests


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Among the first foreign companies to enter Africa, the Tata Group has a strong presence and

spread in the African business community. Tata Africa shares the core Tata values of

business ethics and social responsibility.

Established in 1994, Tata Africa Holdings operates as the nodal point for Tata businesses in

Africa.

Tata Africa Holdings has a strong presence in over 10 African countries with investments

exceeding US$100 million. The company was established in Johannesburg, South Africa and

serves as headquarters for Tata operations in Africa. The organization today employs over

750 people and operates in major industrial sectors such as information systems, engineering,

services, materials, consumer products and chemicals.

This case study focuses on 2 aspects:

Rift Valley plan threatens to wipe out flamingos 'Bonkers' soda-ash plant plan will ruin fragile ecosystem in Africa.

Tata, along with Magadi Soda Co., a Tanzanian company, joined forces to build a soda ash

extraction plant in Tanzania. The Tanzanian government is all for the project. On the other

hand, environmental activists are opposing the plant because it would be near Lake Natron,and it could possibly affect the lake's ecosystem and its neighboring dwellers. Tata was

planning to change the site of the plant so it would be built 32 km from the lake, but the

opposition still thinks it would negatively disturb the environment. It could also jeopardize

the Lesser Flamingo birds there, which are already endangered. Lake Natron is where two

thirds of Lesser Flamingos reproduce. Producing soda ash involves drawing out salt water

from the lake, and then disposing the water back to the lake. This process could interrupt the

chemical makeup of the lake. Twenty-two African nations are against the creation of theproject and have signed a petition to stop its construction.

Lake Natron is the worlds most important breeding site for lesser Flamingos, accounting for

75 per cent of the global population that is, 1.5 million to 2.5 million flamingos.
http://en.wikipedia.org/wiki/Lake_Natronhttp://en.wikipedia.org/wiki/Lake_Natron


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The Magadi Soda Company is Africas largest soda ash manufacturer and one of Kenyas

leading exporters. The company was established in 1911 and is a wholly owned subsidiary of

Brunner Mond Group, a Tata Chemical subsidiary.

Magadi Soda Company is a leading producer of sodium carbonate and salt. The company

employs over 450 people at its facilities at Lake Magadi. It recovers trona ore from surface

deposits at the base of the Rift Valley and converts it into sodium carbonate (soda ash). The

operations at Lake Magadi are situated 120km south west of Nairobi. The soda ash is

transported by rail to the Port of Mombasa for onward shipping.

Soda ash is an essential constituent in the manufacture of glass and important in the

production of detergents and industrial chemicals. Over 95 per cent of the output is exported

to markets in South East Asia, the Indian sub-continent, Africa and the Middle East.

INDIAS Tata Chemicals, which had planned to set up a controversial soda ash

manufacturing plant, in joint venture with the Tanzanian government with an investment of

around $500m, has decided to put the project on hold in the face of fierce opposition from

environmentalists.

The proposed soda ash factory on Lake Natron's shores is feared to have a negative impact

not only on the ecosystem of Tanzania but that of Kenya as well.

Tata Chemicals had formed a joint venture Lake Natron Resources Ltd with the Tanzanian

government for exploring the possibility of setting up a Soda-Ash manufacturing plant there

which was opposed by environmentalists, who argued that the proposed plant may affect

flamingos bird population there and affect the mineral balance of the Lake Natron.

The Tanzanian government responded to it by shifting the location of the plant 35 kilometers

away from the lake shore but the move was again opposed by the environmentalists as it

comes under the Ramsar wetland area.

According to Tata Chemicals Ltd together with officials of the state-run National

Development Corporation (NDC), the initial environmental and social impact assessment

(ESIA) report for the project. But according to the chief executive officer and coordinator of

the Wildlife Conservation Society of Tanzania (WCST), Lota Melamari, the project has the


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potential to damage and destroy the East African lesser Flamingo population through

disrupting the birds breeding at the lake. Lake Natron is the worlds most important breeding

site for lesser Flamingos, accounting for 75 per cent of the global population.

Globally there are between 2.2 to 3.3 million flamingos, with between 1.5 and 2.5 million

located on East Africas Rift Valley lakes alone.

TATA, which has entered into a joint venture with Tanzania's government, plans to install

heavy machinery on the shoreline to extract half a million tones of soda ash, or sodium

carbonate, each year.

Tata also plans to build a coal-fired power station and house 1,200 construction workers on

site. However after the implementation of this plan the chances of lesser flamingos

continuing to breed at Lake Natron in the face of such mayhem are next to zero.

Tata had finally abandoned its initially proposed large soda ash plant, which was to be built

on the shores of Lake Natron. The project is vehemently opposed by green activists

worldwide. The developers have now abandoned their original location, but are still

considering alternatives, so a revised version of the development may emerge.

6.2 Community Initiatives

Tata Africa is actively involved in initiatives that promote the social and economic

development of African communities.

In keeping with the Tata Group's rich tradition of giving back to society, Tata Africa is

actively involved in initiatives that promote the social and economic development of African

communities. The company is currently involved with several community development

programmes geared towards enhancing the lives of the African people.

6.2.1. The Adult Literacy Project

The project is a partnership between Tata Consultancy Services and the WDB Trust, an

organisation that works in the areas of micro finance, entrepreneur training and education of

impoverished rural women. Adapted from TCS's computer-based functional literacy


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7. Conclusion

Globalization has made the consumer pivotal to all calculations. If the customer wants a

product I must be made available. Economic restrictions and trade policies that earlier

determined what would be produced, and how are now looked up with distaste. Today,

consumers get the first preference and any obstruction towards getting these goods and

services across to them is abomination to the ideology of globalization. In developing

countries like India, globalization has impacted the way businesses conduct business.

Increasing competition, standard of living, and merging different cultures has truly changed

the life of the nationals in the country. People prefer foreign brands, and are able to afford

such brands due to the possibility of jobs in multinational countries which leads to higher

paychecks, shareholders enjoy a fair return on investment, etc. The FDI of a country like

India is increased and in return our balance of payments is very favorable and our countrys

reputation is enhanced on the global market.

For instance, those who had campaigned against English language as a medium of school

instruction in India would find themselves in a dreadful minority today. Hence the mixture of

east meeting west has impacted every country today, not just India. Poor villagers and

socially backward classes want education to extricate themselves from the past so they can

confidently meet the future. Not just education, other public goods such as health, transport

and energy are equally sought after across lasses without paying as much attention to who is

providing them but rather to the fact that they should be available to the user.

Although there are several positive effects to globalization in relation to business ethics, there

are drawbacks too. When a MNC or TNC sets up a base in a developing country like India,

various changes take place. Changes such as social constraints like language, culture, social

and environmental issues have to be obeyed. But MNC giants do not always adhere to these

conditions; the Bhopal Gas Tragedy mentioned in this report is one of the worlds largest

industrial-globalization oriented disasters. Hence, globalization and business ethics is a

controversial aspect today, learning how to control it and adapt will continue to be a

challenge.


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8. Bibliography

Books:1. Business Ethics and Global Values

Pages 3-67, 75-143, 271-292By: S.K. Bhatia

2. Globalisation and Business EthicsPages 7-25, 65-80By: Karl Homann

3.Business Ethics

Pages 1-13By: Dr. A.K. Gavai

4.Management Ethics Pages 3-4By: Norman E. Bowie & Patricia H. Werhane

5.Business Ethics & Professional ValuesPages 11-15By: Dr. A.B.Rao

6.Ethics Incorporated: Top Priority and Bottom LinePages 189197By: Dipankar Gupta

7.Management in IndiaPages 221237By: Herbert J. Davis, Samir R. Chatterjee & Mark Heuer

8. Understanding Business EthicsPages: 1821By: Crane and Matten

9.Business EthicsPages: 72, 73, 174, 175 200, 201, 223By: J.C. Vohra

10.Business EthicsPage 50By: C.S.V. Murthy


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Newspaper Articles:

1. Economic Times: The Bhopal Gas Tragedy

Dated: July 8, 2010

2. Times of India: Will The Guys Stop Playing At WorkDated: July 22, 2010

3. Economic Times: Companies Take On Role Of CounselorsDated: July 21, 2010

Internet Websites:

1. http://en.wikipedia.org/wiki/Bhopal_disaster2. http://en.wikipedia.org/wiki/Globalization3. http://www.associatedcontent.com/article/317878/globalization_and_ethics4. http://www. Referenceforbusiness.com/small/Eq-INC/Globalization.html5. http://www.jstor.org/pss/3857689
http://en.wikipedia.org/wiki/Bhopal_disasterhttp://en.wikipedia.org/wiki/Globalizationhttp://en.wikipedia.org/wiki/Globalizationhttp://en.wikipedia.org/wiki/Bhopal_disaster


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AnnexureII The Times of India Will The Guys Stop Playing

At Work


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AnnexureIII Economic Times: Companies Take On Role Of

Counselors

Documents

Globalisation and Business Ethics