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Is globalization good or bad for society? Who have been the winners and losers?
Low-cost communications and seamless, interconnected global air travel, have
reduced the impact of long distance between people.
Political regional integration has reduced barriers to movement of people and
goods.
Globalization is a process which diminishes the necessity of a common and
shared territorial basis for social, economic and political activities, processes and
relations.
Deterritorialization: examples include global communications, global products,
global financial systems and capital markets.
Cultural issues:
Globalization encourages a more uniform global culture. But, when a
firm enters into a foreign market, its home country culture often differs
from culture of the host country.
Legal issues:
A firm (except US firms) operating outside of its home jurisdiction is
beyond the reach of its domestic law. US law has extra-jurisdictional
effect, following US firms everywhere they may be. Ethics plays a bigger
role in business decision-making when expat managers cannot rely on
local laws/regulations to solve ethical problems.
Accountability issues:
MNCs exercise significant economic and political clout
MNCs managers are accountable to their shareholders
MNCs are not legally accountable to the communities where they operate
they can unilaterally decide to re-locate factories to other countries to
The study of business ethics has been largely from an American perspective
The ROW has had a different perspective shaped by their respective cultures
(Values, Norms and Beliefs) and historical contexts.
Do not automatically assume that the American approach applies.
Chapter 2
1. What are the main implications of the legal status of corporations for notions of
corporate social responsibility
A legal entity that is distinct from its employees, managers, shareholders and
customers
A corporation (not its shareholders) owns its assets; shareholders own a share in
the company, entitling them to a dividend and a say in decisions affecting the
company
Corporations are artificial persons, having legal rights and responsibilities in
society
Corporations are owned by shareholders, but independent of them and not
responsible for debts or damages caused by the corporation
Managers and directors have a fiduciary responsibility to protect the investment
of shareholders, acting in best interests of shareholders
2. Only human beings have a moral responsibility for their actions. Critically assess this
proposition in the context of attempts to ascribe moral responsibility to corporations,.
4. According to Archi Carll, what are the four levels of corporate social responsibility?
How relevant is this model in a European, Asian, or an African context?
In China & India, companies are expected to share their wealth with local
communities
5. Explain the difference between normative, descriptive, and instrumental versions of
stakeholder theory. To what extent do stakeholders have intrinsic moral rights in relation
to the management of the corporation?
6. Define the extended view of corporate citizenship. Give examples to illustrate the
concept.
In mid-1990s, corporate citizenship (CC) was a new term used to address the
social role of the corporation.
There are 3 different perspectives on CC:
A limited view (CC is corporate philanthropy)
An equivalent view (CC is CSR)
An extended view (the corporation is also a political actor)
Limited View
The main stakeholder is the local community; philanthropic actions are part of
being a good corporate citizen.
The corporation gives back to the community because a healthy community
would be better for business.
Corporate citizenship means engaging in philanthropic deeds for ones local
community.
Equivalent view of CC
Corporate citizenship is means the same as CSR where businesses meet the economic,
legal, ethical and discretionary responsibilities imposed on them by their stakeholders.
An extended view of CC
Liberalized citizenship comprises 3 different aspects of entitlements:
Social rights
Freedom to participate in society (right to education)
Civil rights
Freedom from abuses and interference by third parties (the
government); right to own property, free speech
Political rights
Individual has right to vote, hold office
With failure of governments to fulfill their tradition functions, corporations have
increasingly become political actors protecting, facilitating and enabling the
foregoing citizen rights this is the extended view of CC