Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.1 Globalization Not a new phenomenon: goods have been traded between regions since ancient times Corporations now seen as more efficient than governments in distributing goods and services needed by citizens Today, new view toward trade and market systems is referred to as globalization f8&feature=related f8&feature=related

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.2 Defining Globalization Globalization: a process of decreasing constraints on the interactions among the nations and peoples of the world. Economic globalization: the integration of fragmented markets into a global economy. Political globalization: the process by which world power relationships change, and there is a loss of sovereignty by the states. Social or cultural globalization: the emergence of a worldwide cultural system.

Three Globalization Theses 1. The monoculture or homogenization thesis in which Hollywood, Starbucks, MTV, Amazon.com and McDonald’s (to name a few) are seen as combining to drive out local cultures around the world and replace them with Westernized (or Americanized) culture. 2. The polarization thesis builds upon this by positing an emerging cultural dichotomy between Western and non- Western ways of life which may lead to a civilizational conflict between the West and an emergent Islamic- Confucian alliance: McWorld vs. Jihad 3. But also substantial evidence of a third thesis – the hybridization thesis – supported by everything from successful intermarriage to cosmopolitanism to glocalization.

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.4 Globalization and the Implications for Business Damage to environment Support for oppressive regimes Criticism of marketing practices (e.g., tobacco, pharmaceutical, baby formula, etc.) Arms trade Treatment of employees (e.g., sweatshops) Treatment of indigenous peoples Genetic modification of plants and animals Corruption and bribery

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.5 The United Nations Global Compact Human Rights: 1. Respect internationally proclaimed human rights 2. Not be complicit in human rights abuses Labour Standards: 3. Uphold the right to collective bargaining 4. Eliminate all forms of forced and compulsory labour 5. Effective abolition of child labour 6. Eliminate employment discrimination Environment: 7. Precautionary approach to environmental challenges 8. Promote greater environmental responsibility 9. Use environmentally friendly technologies Anti-Corruption: 10. Avoid corruption (e.g., extortion and bribery)

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.6 The Debate Over Globalization: Supporters Trade leads to more efficient production of better goods and services Better opportunities for employment and higher incomes Transfer of capital, technology, intellectual property, skilled labour Some globalization problems (like sweatshops) are just natural ‘growing pains’

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.7 The Debate Over Globalization: Opponents Benefits received by only a few Creates unemployment Increased poverty and inequality Causes periodic financial crises Destroys local environment Destroys cultures Violates human rights Questionable payments made Disrespect of intellectual property

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.8 Globalization and International Non-governmental Organizations (INGOs) International Non-government Organizations (INGOs): groups that hold shared values and attitudes about the issues relating to globalization and advocate for changes to improve conditions in developing countries INGOs put pressure on corporations and governments Ex: Corporate Watch, Oxfam International, Amnesty International, Greenpeace

Globalization and International Non-governmental Organizations (INGOs) Corporate Watch  Investigate and expose corporate violations of human rights, environmental crimes, fraud & corruption Oxfam International  13 orgs & 3,000 partners in 100 countries searching for lasting solution to poverty, suffering & injustice Amnesty International  1.8 million members in 150 countries: human rights Greenpeace  Focuses on threats to biodiversity and environment Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.9

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.10 Institutions of Globalization Supranational Institution: an international organization that transcends national boundaries where the member states share in decision making on particular issues pertaining to the members Ex: World Bank, IMF, ILO, WTO Also consider political bodies such as: European Union, NAFTA, ASEAN, G-7, G-20 European UnionASEANG-7G-20

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.11 Institutions of Globalization The World Bank:  Provides financial and technological assistance to developing countries. The International Monetary Fund (IMF):  Fosters financial stability, international trade, employment, and reduction of poverty. International Labour Organization (ILO):  UN agency that seeks to promote social justice and internationally recognized human and labour rights. World Trade Organization (WTO):  Coordinates agreements reducing trade barriers.

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.12 Globalization and Canadian Business and Society: Cuts both ways Pressure to forge international links Must meet challenges of global restructuring (e.g., R&D, education, competition policy, cost of capital, etc.) Attract more investment in natural resource plants More direct investment abroad Ex: Gildan Activewear (E-Ethics 15.6 p. 321)Gildan Activewear

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.13 Special Challenges of Global Business Corruption: The abuse of entrusted power for private gain (e.g., bribery) Human rights: The fundamental rights and freedoms to which all individuals, groups, and societies are entitled (e.g., sweatshops). Ex: Ethical sourcing at Hudson’s Bay Company – Code of Vendor ConductCode of Vendor Conduct

Chapter 15 Copyright © 2008 McGraw-Hill Ryerson Ltd.14 The Acceptance of Global Capitalism Fair trade: Trading partnership which aims at sustainable development for excluded and disadvantaged producers (e.g., Fairtrade Foundation, Oxfam, and Traidcraft)Fairtrade Foundation Microfinance: Provision of financial products such as micro-credit or micro-insurance to people living in poverty (e.g., Grameen Bank in Bangladesh)Grameen Bank Fortune at the Bottom of the Pyramid: Applying business principles for social good Fortune at the Bottom of the Pyramid