The Global Context Lecture 10 Global Corporate Social Responsibility

Lecture Objectives Define Corporate Social responsibility Identify corporate social responsibility issues in the global economy Propose ways in which business can respond to global inequalities

Why this Topic? Globalization brings many pressures and problems Problems are partly, but not wholly linked to MNC conduct in international markets Globalization is a continuing process and so of continuing interest to ethics in business

Corporate Social Responsibility The notion that corporations have an obligation to society to take into account not just their economic impact but also their social and environmental impact.

Global CSR Whose standards? –ETHNOCENTRISM –CULTURAL RELATIVISM

Codes of Conduct ARE THERE UNIVERSAL PRINCIPLES? –FREEDOM OF MOVEMENT –OWNERSHIP OF PROPERTY –FREEDOM FROM TORTURE –FAIR TRIAL

Codes of Conduct –PHYSICAL SECURITY –FREEDOM OF SPEECH AND ASSOCIATION –MINIMAL EDUCATION –POLITICAL PARTICIPATION –SUBSISTENCE

The UN Global Compact FOUR AREAS HUMAN RIGHTS LABOUR STANDARDS ENVIRONMENT ANTI-CORRUPTION

Corruption ‘Involves the behaviour on the part of officials in the public and private sectors, in which they improperly and unlawfully enrich themselves and/or those close to them, or induce others to do so, by misusing the position in which they are placed’ (World Bank)

What’s Wrong with Bribery & Corruption? REDUCES NATIONAL WEALTH BY DISTORTING THE MARKET DIVERTS RESOURCES FROM PUBLIC SERVICE PROJECTS UNETHICAL – ABUSE OF POWER

What’s Wrong with Bribery & Corruption? UNDERMINES THE DEMOCRATIC PROCESS CAN DAMAGE THE ENVIRONMENT

Business Risks LOSS OF REPUTATION RISK OF PROSECUTION NO COMPENSATION FOR LOST BUSINESS ONE BRIBE CAN LEAD TO ANOTHER

Business Risks ADDS TO THE COST OF DOING BUSINESS MAKES DOING BUSINESS DIFFICULT LOSS OF TRUST

Corruption

Child Work TYPES OF CHILD WORK ECONOMICALLY ACTIVE CHILD LABOUR HAZARDOUS WORK

Child Labour

WHY DO CHILDREN WORK? PUSH FACTORS –POVERTY –LACK OF EDUCATIONAL OPPORTUNTIES –FAMILY BREAKDOWN –CULTURAL PRACTICES

Child Labour WHY DO CHILDREN WORK? PULL FACTORS –CHEAP LABOUR –OBEDIENT LABOUR –NIMBLE FINGERS –INADEQUATE/UNPOLICED LAWS –POOR INFRASTRUCTURE

What’s Wrong With Child Labour? DENIAL OF HUMAN RIGHTS STEALS CHILDHOOD PREVENTS EDUCATION EXPLOITED THROUGH LOW OR NO WAGES POOR CONDITIONS OFTEN LEAD TO HEALTH PROBLEMS

What’s Wrong With Child Labour? PERPETUATES POVERTY SWELLS LABOUR SUPPLY AND REDUCES WAGES FOR ALL CAN REDUCE ADULT EMPLOYMENT OPPORTUNITES LONG TERM COST TO SOCIETY

Why worry? Ethical problems in global business can leave long- lasting stains on corporate reputations –Nike –Gap –Coca-Cola –Nestlé Obvious damage to expensively-created brand value –Worldwide media, increasingly decentralised Possible competitive disadvantage –Bad news demotivates more than good news motivates

De George’s Code of Conduct Do no intentional direct harm –Act so as to benefit the host country –no utilitarian trade-offs; The good of the host country may not be the same as the good of the current regime Respect the human rights of workers, consumers and others in the host country Promote the development of just background institutions, within the host country and internationally Respect the laws of the host country as well as its culture and values, provided these do not violate human rights or impose immoral laws De George, R T (1998), Business Ethics, Prentice Hall

Any Questions ?