Introduction
Globalization refers to integration and diffusion of global economy through technological changes, integration of cultures, global market regulations, and capital and geopolitical changes (Bondy & Starkey, 2014). Generally, globalization has contributed significantly to the growth of global economies through creation of avenues for capital flow across boarders and enhancement of free trade in the global market. However, one area that remains a challenge to most global managers is global business ethics and their effect to global stakeholders, especially during this period of explosive growth of multinational corporations (Carroll, 2004).
Surprisingly, despite the benefits associated with globalization, it has been associated with rising poverty within societies due to poor economic policies, thus leading to high crime rates (Arnold & Valentin, 2013). Banerjee (2008) further claims that the legal revolution that brought about multinational corporations did not provide clear guidelines on how these MNCs would serve social interests of stakeholders provided they delivered economic benefits.
Looking at the benefits of globalization, there is more concentration on the economic side than on human side of doing business. This is evidenced by continued economic empowerment of MNCs and host economies in expense of ethical business and corporate social responsibility. Indeed, despite worldwide campaign for environmental conservation, many MNCs and developed nations are continuing to degrade and pollute the environment through emission of green gases, thus leading to global warming; this may explain the prevalence of health problems, especially in developing countries. Therefore, globalization is good for individuals as it empowers them economically but bad for humanity, based on ethical considerations and corporate social responsibility.
Effects of Globalization on Individuals and humanity
Various studies have been conducted about globalization, however, most have concentrated on the economic side of globalization and its effect on world economies, but very few have dedicated their efforts on ethical side or effect on humanity. According to Parker and Pearson (2005), globalization seems to be striving to serve the interests of a few individuals and damaging the interests of everyone else in the global environment. Here, although globalization leads to open market opportunities where various businesses can effectively trade over a wide network, the main beneficiaries are the MNCs themselves and the developed countries such as the US.
However, before looking at the human side of globalization, or the lack of it, it is important to understand the contribution it has made to individuals. Generally, the world has become a global village where goods and services are traded freely, thus contributing to development of global economies, especially the emerging markets of China, India and Far East and Southern Asian countries. In addition, globalization gives consumers a chance to enjoy a variety of products from various countries. Moreover, globalization enhances access to credit as it allows credit to flow easily across various countries, thus leading to more income and employment opportunities for individuals (Van Cranenburgh, Liket & Roome 2013).
Despite the above benefits, my position remains that globalization does not respect human rights and thus it is bad for humanity. Global organizations have been striving to comply with demands for global ethics in their operations, but that only ends at being respectful to host country’s ethical standards based on economic empowerment but they do very little on human well-being. According to Carroll (2004), the business ethics touches the interests of all stakeholders in global business, including the community and government.
However, on the humanity side of globalization, there is less contribution to human well-being and quality of life. For instance, the democratization efforts by global economies are being hijacked by powerful multinational corporations, which focus on maximizing their returns in expense of social welfare. In addition, various questions remain devoid of conclusive answers especially when relating globalization to culture and morality. Take for example the its impact on labor market. Although one would argue that globalization has enhanced labor mobility and empowerment of individuals, but the human side of it is degrading, especially considering that, some developing countries have very weak labor legislations that give MNCs an opportunity to exploit workers. According to Carroll and Shabana (2010), business ethics should be directed towards serving humanity from different perspectives including environment social, governance, and business practice.
From the Utilitarianism theory point of view, every stakeholder needs to maximize benefits in light of globalization. However, the concept of globalization usually depends mostly on an individual’s viewpoint and perspective. For example, one would argue that globalization usually leads to sustainability, increased democracy and justice; however, the possibilities of insecurity, inequality, and democratic deficits are also very high in a globalized world. Evidently, world security concerns such as racism, terrorism, and violence have increased in the wake of globalization, leading to civil wars in various communities. Moreover, globalization causes creation of new crimes and violence such as computer crime, global sex tourism, and prostitution among women and children. Other effects of globalization include economic insecurity where trade and financial transactions are largely affected (Carroll, 2004).
There are ecological problems associated with globalization such loss of biodiversity and global warming resulting from industrial development and increase in population growth. In addition, globalization is killing traditional cultures by influencing many companies to imitate Western cultures, thus restricting development of traditional cultures, especially in African countries. Other bad affects of globalization to humanity include economic inequalities among countries. For example, due to globalization, poor countries usually face a number of challenges in their financial sectors and cultural imperialism resulting from decolonization (Ke & Wang 2014).
Another area of concern is revolves around gender inequalities whereby, men get more access to global communication networks, global financial, global corporate management, and global governance management than women do. In that sense, women are more disadvantaged in global trade and most of them usually face poor labor recognition and low payment in corporate governance.
Globalization has caused a number of ethical challenges that many managers in organizations have to endure. Therefore, social justice is necessary for multinational corporations, especially in less developed countries in order to reduce cases of corruption and enhance environmental ethical principles and cultural ethics. The effect is elimination of low standard government legislatives, especially those related to labor and environment (Velasquez, 2000). The main ethical principles that are responsible for corporate social responsibility usually help in providing moral management of corporations in diverse cultures (Carroll and Shabana, 2010).
The Utilitarianism theory comes in handy in trying to explain the ethical business practice in line with globalization, especially when corporations are faced with several perspectives on what is just and unjust, as well as moral and immoral in various cultural contexts. They have also led to ethical and moral relativism on what is wrong or right according to various cultures. Therefore, these moral standards help in examining behaviors of individuals in different corporations worldwide (Jones & Millar, 2010).
Particularism theorists argue that ethical disputes can be solved by using moral traditional beliefs and values of a particular culture. However, communitarians assert that life within community provides groups and individuals with moral obligations that are created with social justice and democracy. Therefore, these ethical approaches to environmental ethics promote ethical relativism rather than universally valid moral values, thus helping in solving moral questions in various corporations under social corporate responsibility (Muskat, Muskat, & Richardson, 2014).
Despite all these ethical approaches, it is clear that ethical relativism cannot provide the best solutions to various globalization problems (Carroll and Shabana, 2010). As a result, there is need for corporate managers to develop proper strategies to deal with these globalization problems in a number of cultures. These include problems such as sexual discrimination and racism. Managers should also establish universally valid moral values that can apply in all cultures in evaluating their behaviors, thus promoting social corporate responsibility (Velasquez, 2000).
It is important for all people in these cultures to respect human rights, including both negative and positive, in order to promote humanity and freedom. However, utilitarian theory and human rights theories assume that moral judgment must be based on individual’s goals and morality. Therefore, corporate managers should use moral diversity in order to reduce negative effects of globalization through integration of human rights theory and utilitarian theory (Velasquez, 2000).
Again, it will be important for corporations to include absolutism and relativism as their managers promote local moral values in social corporate responsibility. Managers should also incorporate capitalism ethics and regulation on various business dialogues. Moreover, managers should use globalization strategies in order to enhance global business ethics (Merino & Vargas, 2013).
It is also vital for companies and corporate managers to embrace global corporate code of conduct and standards that are developed by independent international bodies and groups. Global stakeholders can also benefit at all levels by establishing sustainable ethical guidelines that promote corporate social responsibility in accordance with Utilitarianism theory. Therefore, corporations should use social corporate responsibility in order to allow business stakeholders consolidate power and authority in bigger corporations. Again, corporations should aim at overcoming social and environmental issues by behaving in ethical manner, thus involving high level of integrity and transparency in their operations (Banerjee, 2008).
Conclusion
This paper has discussed both the bad and the good effects of globalization. From the paper, it is clear that bad effects of globalization include global warming, corruption and other social inequalities, especially to less developed countries. Again, various ethical standards exist that corporations should follow in order to solve globalization problems. The importance of corporate social responsibilities in global corporations cannot be overemphasized, and it is the role of these corporations to promote integrity and transparency in global businesses.
Besides, corporate social responsibility helps in promoting stakeholders and corporations’ sustainability. Furthermore, it is worth noting that environmental ethics such as utilitarian theories and human rights theories can help to promote universally valid moral standards in all cultures. Finally, globalization is one of the factors that have integrated into various cultures, promoting open markets and leading to more capital flow across the globe.
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