4.4.2 Ethics Theme 4 Global business What is meant by the terms: CSR Stakeholder? To what extent do you think MNCs behave in an ethical manner? 4.4.2 Ethics

4.4.2 Ethics In this topic you will learn about Stakeholder conflicts Pay and working conditions Environmental considerations: emissions waste disposal Supply chain considerations: exploitation of labour child labour Marketing considerations: misleading product labelling inappropriate promotional activities

Profitability v. society! Ethics Stakeholder conflict Profit motive (shareholder concept) v. wider motives of other stakeholders (stakeholder concept) In pairs discuss the following questions: Do consumers benefit from greater choice or are they exploited? Do MNCs reduce the impact on the environment by producing closer to markets or worsen it due to food miles? Do employees benefit from greater training and working conditions or are they exploited by powerful businesses? Are global industries too powerful? Do MNCs uphold standards regardless of the country in which they operate in order to preserve the brand? Profitability v. society! https://www.youtube.com/watch?v=zctp7VGeUew

Ethics Pay and working conditions How ethical are Primark? Opportunity for MNCs to exploit local workers with low pay and poor working conditions Introduce western standards Create jobs How ethical are Primark? Plan an argument for and an argument against before reaching a conclusion Should an MNC pay the average for the host country or a salary more in line with the domestic country? http://www.worldsalaries.org/ http://www.primark.com/en/our-ethics https://www.theguardian.com/environment/2013/oct/06/ethical-high-street-clothes-primark http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7037887/Primark-ramps-up-ethical-efforts-after-expose-on-working-practices.html

Ethics Environmental considerations Emissions and waste disposal UK legislation is strict e.g. all publically listed companies have to report their greenhouse gas emissions and abide by laws on how waste is disposed – but is this true in all countries? Global impact of industrialisation Growth of e-waste VW emissions scandal. http://www.greenpeace.org/international/en/campaigns/detox/electronics/the-e-waste-problem/where-does-e-waste-end-up/ https://www.dosomething.org/us/facts/11-facts-about-e-waste

Ethics Supply chain considerations: Exploitation of labour The International Labour Organisation (ILO) promotes fair and decent work for workers across society Pay, choice and working conditions – to achieve social justice Responsibility of MNCs throughout the whole supply chain Child labour Exploitation of children who have no power Low wages Unacceptable conditions No education Kidnapping from families Slavery ILO mission and objectives. http://www.ilo.org/global/about-the-ilo/mission-and-objectives/lang--en/index.htm http://www.ilo.org/ipec/Campaignandadvocacy/wdacl/lang--en/index.htm http://www.ilo.org/global/topics/child-labour/lang--en/index.htm http://www.history.com/topics/child-labor http://www.bbc.co.uk/news/business-25947984 History of child labour. If it is no longer acceptable in our country should it be acceptable anywhere? The ILO’s campaign to end child labour.

Ethics Marketing considerations: Misleading product labelling In the UK this is governed by the Trade Descriptions Act – but not applicable in other countries UK legislation includes labelling such as size/quantity, price, ingredients, endorsements, how, where and when made, health claims Stricter in certain industries e.g. food and pharmaceuticals Often pursued by pressure groups and consumer organisations such as watchdogs Inappropriate promotional activities Promoting directly to children Cultural difference e.g. the culture of gift giving in China Promoting a life style that goes against cultural or religious difference Its not just MNCs – do you know what your food labels really mean? http://www.health.com/health/gallery/0,,20599288,00.html http://www.bbc.co.uk/news/business-29538125 Business etiquette or corruption?

4.4.2 Ethics In this topic you have learnt about Stakeholder conflicts Pay and working conditions Environmental considerations: emissions waste disposal Supply chain considerations: exploitation of labour child labour Marketing considerations: misleading product labelling inappropriate promotional activities