Microecon Ethicality in a Globalizing

Microecon

Ethicality in a Globalizing Economy

In your opinion, what is the greatest ethical problem faced by business people today? What advice could you offer to business people that might promote ethical behavior on their part?

Perhaps the greatest ethical problem in business today emanates from the patterns and realities of globalization. Trade liberalization and the opening of borders between nations has created many new opportunities for businesses to engage in production, outsourcing and exporting activities previously not possible. This opportunity is simultaneously creating pressure for many organizations wishing to continue to engage in business ethically.

Namely, the ability to exploit cheap labor and low-grade environmental standards in developing countries has attracted the exploitive behavior of large companies typically based in industrialized countries like the United States. This places a pressure on the ethically oriented organization to continue to approach labor and environmentalism according to ethical rather than economic imperatives. A good example is a firm such as Wal-Mart, which uses cheap foreign labor as a way to undercut its competitors in terms of pricing. For business owners attempting to stay in business, it is not just the temptation to gain greater profits but indeed the imperative simple to remain viable which drives many to eschew desirable ethical standards.

Perhaps the best advice which could be offered to business people in lights of these pressures is to place an emphasis not on competing with such firms in terms of price but in shifting a focus toward emphases such as quality, community orientation and quality marketing. Quite often, a byproduct of the patterns of globalization is a reduced quality and a diminished interest on the part of an organization in embracing the needs and desires of the consumer. This suggests that there are unmet desires on the part of the consumer that can be realized by the ethically principled and quality driven firm.

Should ethics in the business world be a matter of law or of individual conscience? Would your answer be the same if the question pertained to personal ethics? Explain.

The business world is distinct from individual orientation, particularly where questions of ethicality are concerned. Factors such as organizational culture, normative patterns within an industry and the unique makeup of personalities in departments and teams within an organization will all help to shape a set of ethical objectives which should be clearly stated. Quite in fact, these are conditions which should be guided by the letter of the law. Corporate enterprises are unique where the topic of ethicality is concerned because the actions, decisions and failures of the biggest and most important of these will have the capacity to impact countless invested parties. The manner in which consumers, employees, investors, stock market players, tax payers and the economy as a whole can be impacted by the rise and fall of corporate fortunes denotes that the law has a right and responsibility to reign in unethical behavior.

The corruption of the past decade which saw the fall of companies from Enron to General Motors demonstrates that allowing individual conscience to shape corporate ethical orientation is simply not enough. Whereas in my personal ethical orientation, I have the right to face ethical dilemmas and interpersonal affairs with my own moral compass as the authority, the inherency of corporations as effecters in the lives of so many individuals and systems denotes that this right is not in place. By contrast, there is a demand placed upon the legal system to protect the citizens and systems to which it is beholden by ensuring that corporations abide such ethical parameters as proper accounting procedures, attention to labor concerns and engagement in fair business competition.

The production of many of the goods the United States imports from Mexico causes pollution within Mexico. Is this extra pollution fair to the Mexican people?

The patterns of globalization have magnified the need for global standards in terms of environmentalism, emission standards and pollution allowances. A troubling example is found in Mexico which, under the thrust of greater trade liberalization over the U.S. border, would find itself increasingly susceptible to the abuses of corporate production operations. This is an example of the unfair nature of corporate behaviors allowed by globalization.

For the Mexican people, this indicates a conflict in the claims and realities of globalization. The investment of greater capital and production into the Mexican labor market has promised to bring jobs, wealth and economic robustness to the developing economy. But the opportunity to cut production costs by entering this venue where environmental regulations are weak or in some areas non-existent has inclined the pollution of Mexican air, water and soil. This has not only had terrible effects on the population of Mexico, but it has created a self-perpetuating resistance to the adoption of environmental improvements. The prospects of a global standard in the area of environmental protection is obstructed by the will of those nations and companies which have so much to gain by exploiting contexts such as Mexico. The greatest victim of this behavior are the citizens of nations such as Mexico, which have little to no say in the manner in which their communities, resources and sources of sustenance are being treated.

When firms in Mexico cause pollution that crosses the border, U.S. residents along the border are damaged. That Pollution is an external cost, since the U.S. residents have no way to extract payment for damages from the Mexican polluters. What policies should the United States pursue to reduce this pollution?

The reality of the corporate abuses which have caused so much ecological devastation in Mexico is that these are not simply limited to Mexico itself. The perspective held by many of the American-based companies which have crossed the border to conduct business without the encumbering regulations of the American marketplace is that this impact is acceptable when levied upon Mexicans. However, this perspective is not only inhumane, it is also highly unrealistic. The presumption that America's own border towns could be spared the environmental degradation resulting there-from is to conflate political borders with real geological circumstances.

The broader environmental reality here implicated is that pollution and environmental abuse are global problems and their scope is far larger than the relationship between any two nations. Therefore, where Mexico, the United States and all countries engaged in globalization are concerned, there absolutely must be an emphasis on created strong, meaningful and achievable global standards on pollution, emissions, global warming parameters and other proven areas of ecological necessity. This should create a framework within which to restrain the activities of corporations throughout the world and to invoke consequences on a global basis for those who do engage in such actions.