Global Is at Ion

ST.
ANDREW’S COLLEGE OF ARTS, SCIENCE AND COMMERCE
GLOBALISATION AND
BUSINESS ETHICS
GUIDED BY: PROF. SHIRLEY PILLAI
SUBMITTED BY : GROUP 1
SUBJECT: BUSINESS ETHICS AND CORPORATE SOCIAL

RESPONSIBILITY
T.Y.B.M.S
SEMESTER – V
2010 - 2011
Business Ethics & CSR St. Andrew’s College T.Y.B.M.S
CERTIFICATE
St. Andrew’s College of Arts, Science & Commerce
St. Dominic Road, Bandra (West),
Mumbai - 400050
This is to certify that the following students:
Ms. Priyanka Anderson Roll No. 3501

Ms. Gladisa D‘mello Roll No. 3311
Ms. Vanessa Fernandes Roll No. 3521
Ms. Lavina Mascarenhas Roll No. 3531
Ms. Naarah Pereira Roll No. 3541
Mr. Ajim Siddique Roll No. 3551
Of class T.Y. B.M.S. Division ‗B‘ Semester V, have successfully completed

the project on
Globalisation and Business Ethics
For the Academic year 2010-11 as laid down by the University of Mumbai.
__________________ __________________
Dean Principal
____________________ __________________
Coordinator (B.M.S.) Project in-charge
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DECLARATION
St. Andrew’s College of Arts, Science & Commerce
St. Dominic Road, Bandra (West),
Mumbai - 400050
Students Ms. Priyanka Anderson Roll No. 3501

Ms. Gladisa D‘mello Roll No. 3311
Ms. Vanessa Fernandes Roll No. 3521
Ms. Lavina Mascarenhas Roll No. 3531
Ms. Naarah Pereira Roll No. 3541
Mr. Ajim Siddique Roll No. 3551
Title of Project: Globalisation and Business Ethics
Department: Management Studies
Year of Studying: 2010 – 2011
Internal Examiner External Examiner

Name: Name:
Date: Date:
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ACKNOWLEDGEMENT
It gives us immense pleasure in acknowledging the valuable and co-operative assistance

extended to us by the various individuals who have helped us successfully in completing our
project.
First of all we would like to thank the Mumbai University for giving us this opportunity to
study the subject of Business Ethics.
We wo uld also like to thank our guide Prof. Shirley Pillai for her guidance throughout the
project.
We extend our sincere gratitude to the college to librarian valuable support in our project
Work we would like to thank our parents and colleagues who have during the making of the
project.
It is the encouragement of all these people that made us proceed towards achieving our goals.
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Table of Contents
1. Introduction ............................................................................................................................ 7
1.1 Business Ethics ................................................................................................................ 8
1.2 An Overview: Globalization and Business Ethics ........................................................... 8
2. Indian Ethos in Management ............................................................................................... 10
2.1 Global imperatives and indigenous ethical values in India ........................................... 10
2.2 A Macro Glance ............................................................................................................. 11
2.3 The Semantics of Business Ethics ................................................................................. 12
2.4 The Basis for Will to Ethics in Business ....................................................................... 12
2.5 Will to ethics in the practical business world ................................................................ 13
3. Concept of Culture & Types of Corporate Culture .............................................................. 15
3.1 Components of Culture .................................................................................................. 15
3.2 Cultural differences and Global Business ...................................................................... 16
3.3 Differences in Concepts ................................................................................................. 19
3.4 Ethics in the East and West............................................................................................ 20
4. Globalisation – A Controversy ............................................................................................ 21
4.1 Relevance of Globalisation ............................................................................................ 21
4.2 Cultural Issues ................................................................................................................ 21
4.3 Legal Issues .................................................................................................................... 23
4.4 Financial Accountability Issues ..................................................................................... 24
4.5 Environmental Issues ..................................................................................................... 24
4.6 Changes in Marketing Functions ................................................................................... 25
4.7 Technological Changes .................................................................................................. 26
4.8 Role of Government ....................................................................................................... 27
4.9 Global Regulators and Standards ................................................................................... 27
5. Case Study I: The Bhopal Gas Tragedy.............................................................................. 31
5.1 Introduction .................................................................................................................... 31
5.2 A Deadly Timeline of Events ........................................................................................ 34
5.3 Problems Contributing to the Tragedy ........................................................................... 35
5.4 Solutions Implemented over the Years .......................................................................... 37
6. Case Study II: TATA Stirs Controversy in Tanzania .......................................................... 40
6.1 Introduction .................................................................................................................... 40
6.2 Community Initiatives ................................................................................................... 43
6.2.1. The Adult Literacy Project..................................................................................... 43
6.2.2. Skills-development Programmes ........................................................................... 44
7. Conclusion .......................................................................................................................... 45
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8. Bibliography ........................................................................................................................ 46
Annexure – I: Economic Times ―Bhopal Gas Tragedy‖ ......................................................... 48
Annexure – II The Times of India ―Will The Guys Stop ‗Playing‘ At Work‖ ........................ 49
Annexure – III Economic Times: ―Companies Take On Role Of Counselors‖ ...................... 50
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1. Introduction
Globalization and business ethics is becoming an important issue and is slowly making its
way into the media and policy maker's minds. After all, globalization is a development,
which increases the internationalization of production and manufacturing, governing and
financing processes. While international economic relations are nothing new, the global
integration of production, governing and financing processes within the structures of
multinational, globally operating corporations certainly is. A final question is how
philosophical ethics can contribute to the processes described here. Can ethics set limits to
global business; indeed, is this the task it has to fulfill? Before we can really discuss global
ethics we should take just a moment to define what ethics really is.
Ethics may be referred to as some standardized form of conduct/behaviour of individuals

understood and accepted in a particular field of activity. Ethics is a mass of moral principles
or sets of values about what conduct ought to be. They give an idea what is right or wrong,
true or false, fair or unfair, just or unjust, proper or improper, e.g. honesty, obedience,
equality, fairness, etc. and respect and then doing the right thing.
Ethics is a fundamental, personal trait, which one adopts and follows as a guiding principle in
one‘s life. Those placed in positions of trust and recognized for their knowledge and
expertise like managers, shall perform their duty with integrity, I independence, sincerity and
honesty. That is the basic norm of professional ethics. A professional cannot justify his
failure, negligence of compromise, with excuses and explanations. Every rational human
being practices ethics for his own and others‘ welfare and safety.
Ethical issues occur frequently in management and extend far beyond the commonly
discussed problems of bribery, collusion and theft, reaching into areas such as corporate
acquisitions, marketing policies and capital investments. For example, after the merger of
two firms, ethical question arises whether to demote or fire the employees those who have
been serving honestly for so many years.
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1.1 Business Ethics
Business ethics are rules of business conduct, by which the propriety of business activities
may be judged. Ethical principles are dictated by the society and underlie broad social
policies. These principles when known, understood and accepted, determine generally the
propriety or impropriety of business activities. Business ethics also relates to the behaviour
of the manager. It can be defined as an attempt to ascertain the responsibilities and ethical
obligations of business professionals. Here the focus is in people, how individuals should
conduct themselves in fulfilling the ethical requirements of business.
According to Carter McNamara, ―Business ethics is generally coming to know what is right
or wrong in the work place and doing what is right – this is in regard to effects of
products/services and in relationships with stakeholders. Attention to ethics in the work place
sensitizes managers and staff to how they should act so that they retain a strong moral
compass. Consequently, business ethics can be strong preventive medicine.‖
1.2 An Overview: Globalization and Business Ethics
Under globalization, products are not manufactured any more in one country and then
exported, rather, products are designed and produced in production sites in various locations
around the world and financed by global investors and holding companies. A prerequisite of
globalised production is the globalization and liberalization of financial markets, which
enables or dramatically facilitates direct investment in foreign countries, like India. A flood
of mergers in the year 2000 is a good indicator for the globalization of financial investment as
well as for the global integrations of structures of production.
Globally acting corporations often promote Western ideals and images of consumption in
marketing and distribution, and they are supported in this role by the globally dominating
position of Western mass media. Globalization of markets and production, greatly diminish
the efficiency of national politics, in particular, national economic and labour market policy,
as these markets are not nationally organized anymore and can only to a limited extent be
controlled through national legislation and politics.
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Globalization must now be regarded as a fact. But for business ethics, this fact poses a severe
problem: a legal framework that would be able to govern the interactions within the global
society in both an efficient and ethical way is only beginning to be developed.
It would be nearly impossible for a business do deal with another business without some level
of ethical behavior. Cheating, lying, and squeezing the other company or country is likely to
cause great anxiety between the two parties. They may decide not to work with each other at
all.
As the global economy expands people will begin to deal more often with other from
different cultures, values, religions, and beliefs. In the business world this can be very
frustrating if we don't have enough knowledge about the other culture; even worse if we
refuse to learn anything about our business partners. Several global companies have set up
various councils in their organizations to be ethically responsible to employees. 1
Competition Business
Ethics
1
See Annexure - II
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2. Indian Ethos in Management
Global
imperatives
and indigenous
ethical values
in India
Will to ethics in
the practical A Macro Glance
business world
Globalisation
& Indian Ethos
in
Management
The Semantics The Basis for

of Business Will to Ethics
Ethics in Business
In order to understand how globalization and global values affects business ethics, or how the
two are related, we need to first understand what the Indian ethos is in business. Hence,
comparisons can be easily made in relation to India and the world.
2.1 Global imperatives and indigenous ethical values in India
The key question of ethical centrality for today‘s managers and leaders in India from
divergent perspectives is the global imperatives and indigenous values in India. Domination
of global economic logic as the central theme gives rise to organizational prioritization away
from ethical core and it inevitably leads to serious consequences for people, institutions and
society. In addition, the idea that managers have responsibilities extending beyond this
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economic logic needs to be a central theme of organizational sustainability. The societal level
ethics and social responsibilities are not easily distinguished in countries like India. The
internal politics, procedures and administrative behavior often reflect the values of the
managerial elite. Indian organizations have received wide spread negative rankings in various
global, regional, national surveys on corporate integrity and managerial probity in recent
decades. This part highlights the ethical gap common in Indian organizations.
The need for ethical analysis along economic, technical, financial and other decision
parameters are very important managerial priority. One of the most prominent scholars in
managerial ethics in India, S.K.Chakraborty, views the broad scene from a kaleidoscope of
long tradition of Indian heritage. One of the key themes is the distinction between intellectual
ethics and consciousness ethics. He extends the meaning and content of the number of related
issues a range of practical ethical challenges. Increasing the global linkages and
professionalization of managerial cadre is creating a new imperative of ethical imagination
and deepening of managerial roots. While has been extensive theoretical and practical debate
and discussion on role of corporate governance in East Indian societies, powerful indigenous
doctrines of Indian tradition have not been significantly featured in the literature on business
ethics. Given the reality and perception of the managerial ethics in India ,a great deal of
progress is urgently needed in this area .linking the modern corporate context to traditional
Indian values and ethical roots is a blue print that needs further attention.
2.2 A Macro Glance
A few initial, general points are worthwhile. Systematic empirical investigation in the field
has yet to start in India. In fact, until the year 1992, ethics in business was hardly a topic of
concerted engagement at any level except in two or three business schools in the country. It
was the only 2 billion dollar stock exchange fiasco in 1992 which threw up the ethics issue at
the macro level. Since then, investigate journalism has been playing a key role in highlighting
corrupt and fraudulent practices within the business politics criminals (BPC) triangle.
Presently the citizens are hopefully looking up to the assertive judiciary as the ultimate resort
in these ethically troubled times. The competitive fray among global corporations to enter the
Indian economy, and the eager overtures of Indian business to grow fast through
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collaborations with them, have begun to manifest fresh varieties of business non-ethics .the
possibility of a two way traffic is not imaginary: business veering towards criminals and
criminals veering towards business.
2.3 The Semantics of Business Ethics
The phrase ―black market‖ ruled into circulation during the second world war and has
remained since that time it denotes the process of clandestine cells of scarce ,rationed
,controlled commodities at inflated prices .since 1992 the two words ―scam ‖and scandal
have become very common .they cover corrupt financial /economic practice of vast
magnitude affecting large section of the public .the B-P-C triangle has being prominently
involved in these episodes .business enterprises themselves ,with some highly honorable
exception ,often consider such practices to be part of the normal business process.
Whatever recent efforts the business community has been making seem all to be directed
towards offering better deal to domestic consumers in respect of consumables and consumer
durables. Consciousness of ethical imperatives in international business remains to be
separately attended to at least in terms of articulated norms and guidelines.
2.4 The Basis for Will to Ethics in Business
A mute minority feels that a true long term challenge for several major Indian business and
financial sectors is: how far is it ethical to spread greed for goods and mercenaries for money
in the name of business growth, economic development, and higher living standards? In fact,
to make the point sharper, it is ethical to pronounce on ―higher standard of living‖ when it is
really ―higher standard of consumption‖ which is being espoused?
Another general ethical problem relates to social consequences of employment contraction in

man power intensive basic industries .modern capital intensive technology replacing older
technologies is a process not without severe social –psychological fallout in a highly
populated country like India. The ethical issue is: global economical competitiveness or local
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social psychological stability? Is there really any objective method of rating one to be more
desirable than the other?
The third general challenge appears to be one of abuse and misuse of sophisticated
communication technology.
Fourth, with increasing psychological drift and volatility in a artificially stimulated and
exteriorized mind set fueled by business, will society tend to lose mental health, replacing
peace and harmony by conflict and violence.
Fifth, how is ―corruption-in-a-poor-society‖ to be dealt with on a footing different from

―corruption in an affluent society‖ artificial cost escalation in tender bids, evasion,
misappropriation of bank funds, cornering of institutional finance, and diversion of funds
from productive channels are common place event in the formers.
Lastly has touched upon earlier, the entry of big multinationals in a certain key sectors of the
economy, although welcome in general, is yet throwing up new challenges in business ethics.
The capacity to corrupt and the willingness to be corrupted seem to be moving in alliance in a
several cases. Example, the Enron contract for power generation in Maharashtra.
2.5 Will to ethics in the practical business world
In July 1956, the forum of free enterprise has published a manifesto .it contained the
following stern words:‖the certain malpractices have crept into the system of company
management. They are to be condemned and should be removed .hoarding, black marketing
and profiteering are anti social and evil .honest business practices can be promoted and
encouraged by an honest efficient administration in a democratic state.
During the period of downslide the positive side of will to ethics has also remained alive. To
mention a notable instance ,the conceal of fair business practices(CFBP) was established in
1966 by several leading private sector industrialists in western India it adopted the following
code of fair business practices .
i. To charge only fair and reasonable prices and take every possible step to ensure that
the prices to be charge to the consumer are brought to his notice.
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ii. To take every possible step to ensure that the agent or dealers do not charge prices
higher than fixed.
iii. In time of scarcity ,not to withhold or suppress stocks of goods with a view to
hoarding or profiteering
iv. Not to produce or trade in spurious goods of standard lower than specified.
v. Not to adulterate goods supplied.
vi. Not to publish misleading advertisements.
vii. To avoid goods exported or imported at their correct prices.
viii. To maintain accuracy in weights and measures of goods offered for sale.
ix. Not to deal knowing in smuggled goods.
x. Providing after sales service was necessary or possible.
xi. Honoring the fundamental rights of the consumer –rights of safety, right to choose,
right to information and right to be heard
xii. Discarding social responsibility and the responsibility to protect the environment and
nature‘s infrastructure.
xiii. Ensuring that the product warranty is offered on simple, unambiguous and concise
language, highlighting the right of consumer under it.
It is evident that the above recommendation constitutes a primary level self regulating charter
for enlightened citizenship amongst business entities. The CFBP has instituted a set of prize
called ―Jamnalal Bajaj UchitVyavaharPuraskar‖ (or Jamnalal Bajaj prize for fair business
practices) to promote exemplary application of the above norms.
What could be the nature or characteristics of a paradigm that might generate useful response
of these challenges? Fr. Bogaert has suggested a fruitful a simple two axis the modern for the
Indian context: ―sustainability of natural environment‖ plus ―doing good for the poor‖.
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3. Concept of Culture & Types of Corporate Culture
Culture, today, is being defined as an intellectual or moral discipline and training, a state of
intellectual and artistic development or a historically transmitted pattern of meanings. Culture
has also been described as a set of rules, values and beliefs – good or bad – which community
adopts as its norms.
3.1 Components of Culture
Communication: Some cultures are polite and gracious, others are demanding.
Language: Language can become confusion or convey clear meaning.
Dress and Appearance: Dress and appearance identify culture. Arabs wear a
particular type of dress. Indian women wear saris.
Food Habits: Food habits typify a culture, for example, Pizza is cherished in Italy,
Dosa in India.
Time: Time consciousness forms punctuality of Japanese or Americans contrary to the

flexible attitude towards time of Arabs and Indians.
Rewards and Recognition: Rewards and recognition differ from country to country,
for example, giving 15% of fare tip to taxi driver in USA is customary, and in India it
is optional.
Values and Norms: Values and norms are different in different countries due to their
societal or political or religious background. E.g. attitude towards corruption vary in
Germany and Italy.
No two cultures are the same. The Western and Indian cultures have very vast differentiation
between them. While the culture of west is a mixture of different cultures, the Indian culture
is unique and has its own values.
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One of the major differences that can be seen between western and Indian culture is in family
relations. While the Indians are very much family oriented, the people there are individual
oriented. In Indian culture, the family values are given more prominence than the individual
values. Indians respect family values. On the other hand, in western culture the individual
values get prominence than the family values. Indians are more committed to their family
where as in the west; people are more committed to themselves only.
In another sense, it can be said that the western culture is more goal oriented and the Indian
culture is more people or family oriented. Indians may even forsake their individual wishes
and also happiness for the sake of families. But in western culture, this trend cannot be seen.
Unlike the Indians, they plan things ahead. They believe in dominating nature and controlling
the world around them. On the contrary, Indians believe in the harmony with nature.
Another difference that can be seen between Indian culture and western culture is that the
Indians love stability where as they love mobility. In western culture, one can see that the
individuals think of self-reliance and independent. On the other hand, Indians are more
dependent on others. While the children in the US are brought up to live an independent life,
the children in India are not brought up in that way.
In Indian culture, there is respect for the elders and it is they who make decisions. But in
western culture, each individual makes his own decisions.
Coming to competition, Indians are more competitive than the Americans. Coming to work
nature, the Indians work for meeting the family needs. On the contrary, in the west they will
only strive to rise on their own capacity or getting rich. Another difference that can be seen is
that westerners have great regard to time and its value.
3.2 Cultural differences and Global Business
In this process of globalization of economy, it is natural to envisage initial spurt in trade and
commerce as far as international interaction is concerned. But sooner than later other cultural
aspects also come under its purview. They are grouped under the 'cultural exchange
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programs'. These include globalization of scientific and technological research, involvement

in games and sports, and exchanges in various aspects of art and literature. Globalisation of
business can have cultural dilemmas. Whenever foreign entities enter a country or a region it
faces a lot of different problem. More so cultural differences are also important reasons for
these problems.
The culture of the foreign company and the country in which it is operating are different. The
business standards followed, code of conduct, policies are different. Further more in a
country like India, societal interests are to be kept in mind while taking any decisions. Here
an individual‘s ethics if compared to other countries are more rooted to moral behavior
towards those who are family and interestingly everybody is considered as family. However,
if you ask a foreigner everybody is family they won‘t understand why so. This is because
Indian culture speaks of considering everybody as family. There are different thought, ideas,
practices, languages, concepts which a global business needs to adopt or it can push its own
into the foreign land. The community‘s moral outlook should be kept in mind.
For example, in the film industry previously the actor‘s apparel used be more traditional but
today western influence has popularized modern dressing style i.e. western style and the
Indian outfits are almost out and forgotten. So have they adopted the global dressing style or
has it been pushed onto them?
This is the downside of globalisation. It can completely change the practices n cultures of
people. It takes away the unique identity a country or a region has. And that‘s why they say
globalisation means making the world one small village where everybody and everything
becomes uniform.
Global companies need to follow either the global acceptable standards or those which exist
in the foreign land that they are operating in. If and Indian company is operating abroad
suppose in Germany, then they have to follow and use German in speech, documents etc. and
understand the culture over there. Regulating bodies are setup in the countries that regulate
the conduct and business of foreign companies in their country.
Global entities require the thorough study of the environment and the culture so that adopting
the changes doesn‘t take a toll over the natives‘ lives, thoughts, beliefs and societal norms. If
they fail to do this there will be barriers created leading to conflicts and misunderstanding
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and the whole idea of globalisation for development will be going into pits and be harming to
the society.
It is believed that globalization leads to exploitation of not only the weaker nation, but of
weaker section in a given nation as well. Thus we see both international and intra-national
resistance to the attempts at globalization. A strong reaction or backlash of 'nationalism'
therefore, may raise its head in certain pockets of the world. Such voices of protectionism are
heard mainly in poor and under-developed nations.
However, even though it may cause initial setbacks, the process of globalization cannot be
halted. By its very nature it is a progressive (or ongoing) step in the evolution of human
economic dreams. But at the same time, globalization is also responsible for spread of
religious ideas and cultural traditions from one place to another. Initially it may appear that
economically strong nation dominates and entrusts its religious ideas over the weaker nations,
but in the long run globalization will prove to be beneficial; as powerful and true religious
ideas find seekers of truth from various places.
As globalisation advances, business practices become increasingly uniform. Business

education is same everywhere. Managers from diverse countries approach business in similar
ways. Unlike business skills which are the same worldwide. People‘s conceptions of ethical
conduct remains rooted in particular cultures. The importance of cultural differences is not
confined to the problems of different standards. What is considered right and wrong varies as
culture varies. Hence the differences in different cultures pose a challenge for global
business.
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3.3 Differences in Concepts
The meanings of these concepts have changed within our own culture over the course of time.
Hence we cannot assume that our conceptions of rights, for example, are shared by people
everywhere.
Different cultures place different emphasis on these concepts
Cultural differences occasionally result in misunderstandings and accusations of
misconduct.
For example, Japanese companies sometimes show favoritism to other Japanese firms,
mistreating potential foreign business partners. Japanese response is that they are showing
loyalty to companies in long established relationship whereas foreign firms are criticized
other way. Whistle blowing is viewed negatively in Japan, where in US it is often considered
a mark of integrity and moral courage.
While conducting the business globally, it is essential to understand the ways in which the
cultural differences are reflected in people‘s moral outlook. It is also seen how European and
Asian Managers appreciate and view ethics as critical for successful interaction with them, as
a recognition of how America is distinctive.
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3.4 Ethics in the East and West
EAST WEST
Central Role of Long Term Relationships
High level of trust among all parties, Self interests are watched and others are
maintenance of harmony. secondary
Employee Loyalty
Employees are very loyal to the firm they Employee moves from firm to firm.
are appointed so much so that they will
stick to one company all their lives.
Societal Relationship basis

Relationships is relative or situational Relationship is absolute and universal
Moral Decisions
Moral decisions are made on a case by Known rules that is applied equally to all.
case basis with attention to specifics
Systems built on relationships

Reciprocity found; Returning all favors Tend to make sincere but overly optimistic
received to preserve a balance: conflicts commitments that they may not be able to
handled by mutual accommodation. keep. A source of misunderstanding
A company takes more than a fair share is sometimes.
viewed as disruptive, untrustworthy;
binding to each other
Opinions and decision taken

By a group By Themselves
Errant Managers face

Low legal actions High legal actions (includes fines,
imprisonment)
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4. Globalisation – A Controversy
4.1 Relevance of Globalisation
Limited
Resources
Globalisation
Widening
of World
Economy
Globalisation as defined in terms of the deterritorialization of economic activities is

particularly relevant for business ethics. Deterritorialization may mean to take the control and
order away from a land or place (territory) that is already established. Global
communications, global products, and global financial systems and capital markets are only
the most striking examples of deterritorialization in the world economy. There are many other
areas where globalization in this sense is a significant social, economic, and political process.
As we shall now see, globalisation also has significant implications for business ethics.
4.2 Cultural Issues
As business becomes less fixed territorially, so corporations increasingly engage in overseas

markets, suddenly finding themselves confronted with new and diverse, sometimes even
contradicting ethical demands. Moral values, which were taken for granted in the home
market, may get questioned as soon as corporations enter foreign market. For example,
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Moral
Values of
Company
Local
Language
Culture
Cultural
Issues
Reginal
Religion
Difference
attitudes to racial and gender diversity in India may differ significantly to those in Middle
Eastern countries. Similarly, Chinese people might
regard it as more unethical to sack employees in times of economic downturns than would be
typical in Europe. Again, whilst Europeans tend to regard child labour as strictly unethical,
some Asian countries might have a more moderate approach.
The reason why there is a potential for such problems is that whilst globalisation results in the
deterritorialization of some processes and activities, in many cases there is still a close
connection between the local culture, including moral values, and a certain geographical
region.
For example, Europeans largely disapprove of capital punishment, whilst many Americans
appear to regard it as morally acceptable. This is one of the contradictions of globalisation: on
the one hand globalization makes regional difference less important since it brings regions
together and encourages a more uniform ‗global culture‘. On the other hand, in eroding the
divisions of geographical distances, globalization reveals economic, political, and cultural
differences and confronts people with them.
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4.3 Legal Issues
A second aspect is closely linked to what the relation of ethics and law. The more economic
transactions lose their connection to a certain regional territory, the more they escape the
control of the respective national governments. The power of a government has traditionally
been confined to a certain territory, for example: French laws are only binding on French
territory, UK laws on UK territory, and so on. As soon as a company leaves its home territory
and moves part of its production chain to, for example, a third world country, the legal
framework becomes very different.
Different
Laws in
Home
country
Practices of
the
Legal Different
Laws in Host
Government Issues country
Policies of
the Company
Consequently, managers can no longer simply rely on the legal framework when deciding on
the right or wrong of certain business practices. If, business ethics largely begins where the
law ends, then deterritorialization increases the demand for business ethics because
deterritorialized economic activities are beyond the control of national (territorial)
governments.
For example, global financial markets are beyond the control of any national government,
and the constant struggle of governments against issues such as child pornography on the
internet shows the enormous difficulties in enforcing national laws in deterritorialized spaces.
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4.4 Financial Accountability Issues
Taking a closer look at global activities, one can easily identify corporations as the dominant
actors on the global stage: MNCs own the mass media which influences much of the
information and entertainment we are exposed to, they supply global products, they pay
peoples‘ salaries, and they pay (directly or indirectly) much of the taxes that keep
governments running. Furthermore, one could argue that MNCs are economically as
powerful as many governments. For example, the GDP of Denmark is about the same as the
turnover of General Motors.
However, whereas the Danish government has to be accountable to the Danish people and
must face elections on a regular basis, the managers of General Motors are formally
accountable only to the relatively small group of people who own shares in the company. The
communities in the US, Brazil, or Germany that depend directly on General Motors‘
investment decisions however have next to no influence on the company and, unlike a
regional or national government, General Motors is, at least in principle, not accountable to
these constituencies.
4.5 Environmental Issues
It is not a material fact that through the adoption of new technological and commercial
practices we are creating problems and inviting dangers to the sustainability of a healthy
global system. At the same time that these new challenges of globalisation have emerged,
considerable interest has also been directed towards the development of new ways of
addressing the diverse impacts of business in society. Many of these impacts are far-reaching
and profound. To mention just a few, one only needs to think of impacts such as:
The environmental pollution caused by the production, transportation, and use of
products such as cars, refrigerators, or newspapers.
The ever increasing problems of waste disposal and management as a result of
excessive product packaging and the dominance of ‗throwaway culture‘.
The devastating consequences for individuals and communities as a result of plant
closures and ‗downsizing‘.
The erosion of local cultures and environments due to the influx of mass tourism.
24
ENVIRONMENTAL POLLUTION PROBLEMS OF WASTE

•Excessive Production MANAGEMENT
•Tranportation •excessive product packageing
•dominance of "throwaway culture"
ENVIRONMENTAL
ISSUES
ENVIRONMENTAL HAZARDS DEPLETION OF RESOURCES

•Improper Plant Closures •Mass Tourism
•Individuals And Communities faceing •Unrestrictive use of resources
problem of downsizing
Trade between two countries causes environmental harm. Promotion of economic growth
without environmental safeguards results in the unsustainable consumption of natural
resources and waste production.
Liberalisation of the markets leads to access agreements which can override environmental
regulations. The global business operations and activities need to be promoted towards
worldwide environmental protections and not in harming it. Restrictions should be abided.
However today there has been an attitudinal shift and the world leaders have been showing
concerns for the globe and the human race.
4.6 Changes in Marketing Functions
Traditionally marketing was known as the process of effecting change in the ownership and
possession of goods and services to achieve the firm‘s objectives. This is narrow and
25
incomplete interpretation of marketing and represents product orientation. It stressed on

selling whatever has been produced by a business concern without caring for the needs and
demands of the customers. Globalisation has changed this traditional concept. It is now
recognized that the creation of customer and satisfaction of his wants justify the existence of
a business. Business men have realized that ―Consumer is the King‖ and his satisfaction
depends on the success of the firm.
Selling whatever is
Traditional Marketing
produced. Consumer is the
Modern Marketing
'King'.
Ignoring the needs

and demands of the Satisfaction of
customer customer is
ultimate goal.
4.7 Technological Changes
With the increasing globalisation of international business, the high technology sector has
become a major segment of foreign trade. Such industries as the semi-conductor chips,
commercial aircrafts and engines, and industrial robots have become the battleground where
firms fight to increase their market share to survive and prosper in international competition.
The competitive environment that international business faces is to a certain extent a function
of the technological environment and the degree of technological innovations attributed to the
competitive environment.
26
Technological change and worldwide flow of information are fundamentally reshaping how
companies and nations do business. The pressure of technological competition increasingly
drives corporations towards global strategies while stimulating nationalistic impulses to
protect and secure the national technology base from international activities.
4.8 Role of Government
The gradual emergence of multinational networks integrated by large organizations is the

outcome of the co-evolution between the structures of international organizations and
opportunities of the international environment.
Governments have hardly faded away amidst these changes, and attempts to regulate the
entry and behavior of multinational corporations have posed, and continue to pose, a threat of
conflict between the firm and the host nation.
The world has moved from interdependence to integration, the challenge to government
policy has shifted from interdependence to integration; the challenge to government policy
has shifted from regulation of the firm to more fundamental problems, as to whether broader
political and social agenda can be realized in an environment of mobile capital and integrated
world production.
4.9 Global Regulators and Standards
Globalisation has made it necessary that global regulatory bodies be set up. Institutions like
World Trade Organisation (WTO), World Health Organisation (WHO), South-Asian
Association for Regional Cooperation (SAARC), United Nations Educational, Scientific, and
Cultural Organisation (UNESCO), International Monetary Fund (IMF) etc. Global Standards
are followed by businesses while providing their services. ISO – International Standards
Organization‘s Certification is accepted by people everywhere today. Control Objectives for
Information and related Technology (COBIT) is a set of best practices for information
technology.
27
WTO
GLOBAL
IMF REGULATORY WHO
BODIES
UNESCO
28
4.10 Impacts of Globalization on Different Stakeholders:
STAKEHOLDERS ETHICAL IMPACTS OF GLOBALIZATION

Shareholders Globalization provides potential for greater profitability, but
also greater risks. Lack of regulation of global capital markets,
leading to additional financial risks and instability.
Employees Corporations outsource production to developing countries in
order to reduce costs in global marketplace – this provides jobs
but also raises the potential for exploitation of employees
through poor working conditions.
Consumers Global products provide social benefits to consumers across the
globe but may also meet protests about cultural imperialism
and westernization. It can bring cheaper prices to customers,
exploitation by MNCs.
Suppliers and Suppliers in developing countries face regulation from MNCs
Competitors through supply chain management. Small scale indigenous
competitors exposed to powerful global players.
Civil society (pressure Global business activities bring the company in direct
groups, NGOs, local interaction to local communities with possibility for erosion of
communities). traditional community life; globally active pressure groups
emerge with aim to ‘police’ the corporation in countries where
governments are weak.
Government and Globalization weakens governments and increases the
regulation. corporate responsibility for jobs, welfare, maintenance of
ethical standards, etc. It also confronts governments with
corporations from different cultural expectations such as
bribery, corruption, taxation, and philanthropy.
29
To summarize the controversial debate of globalization and business ethics, the following
issues have become essential during globalization:
Not Adhering to Labour Laws

Low Wages Child Labour Unsafe working conditions
Corruption
Violation of Human Rights
Discrimination
Race Gender National origin Religious beliefs
Environmental Pollution
Dumping of wastes Air pollution
Violation of Copyrights & Software laws
30
5. Case Study I: The Bhopal Gas Tragedy
5.1 Introduction
The Bhopal disaster or Bhopal Gas Tragedy is the world's worst industrial catastrophe. It
occurred on the night of December 2-3, 1984 at the Union Carbide India Limited (UCIL)
pesticide plant in Bhopal, Madhya Pradesh, India. At that time, UCIL was the Indian
subsidiary of the U.S. Company Union Carbide Corporation (UCC), which is now a
subsidiary of Dow Chemical Company. Around midnight on December 2–3, 1984, there was
a leak of methyl isocyanate (MIC) gas and other toxins from the plant, resulting in the
exposure of over 500,000 people.
Government agencies estimate 15,000 deaths. Others estimate that 8,000 died within the first
weeks and that another 8,000 have since died from gas-related diseases. A government
affidavit filed in the Supreme Court in 2006 stated that of the 558,125 cases of injury
resulting from the disaster, 516,406 (92.5%) were minor, 38,478 (6.8%) were temporary
partial disablement while 0.7% (~3,900) were severely and permanently disabled.
Some 26 years after the gas leak, 390 tons of toxic chemicals abandoned at the UCIL plant
continue to leak and pollute the groundwater in the region and affect thousands of Bhopal
residents who depend on it, though there is some dispute as to whether the chemicals still
stored at the site pose any continuing health hazard.
31
Over two decades since the tragedy, certain civil and criminal cases remain pending in the
United States District Court, Manhattan and the District Court of Bhopal, India, against
Union Carbide with an Indian arrest warrant also pending against Warren Anderson, CEO of
Union Carbide at the time of the disaster. Greenpeace asserts that as the Union Carbide CEO,
Anderson knew about a 1982 safety audit of the Bhopal plant, which identified 30 major
hazards & accidents that occurred over a period of years before the tragedy and that they
were not fixed in Bhopal but were fixed at the company's identical plant in the US.
It is estimated that 20,000 have died since the accident from gas-related diseases. Another
100,000 to 200,000 people are estimated to have permanent injuries.
The quality of the epidemiological and clinical research varies. Reported and studied
symptoms are eye problems, respiratory difficulties, immune and neurological disorders,
cardiac failure secondary to lung injury, female reproductive difficulties and birth defects
among children born to affected women.
By the end of 2009, it was estimated that 25,000 had died and around 600,000 people were
affected due to gas-related disorders. In June 2010, seven ex-employees, including the former
chairman of UCIL, were convicted in Bhopal of causing death by negligence and sentenced
to two years imprisonment and a fine of about $2,000 each, the maximum punishment
allowed by law. An eighth former employee was also convicted but had died before judgment
was passed.
The Dow Chemical Company purchased Union Carbide in 2001 for $10.3 billion in stock and
debt. Dow has publicly stated several times that the Union Carbide settlement payments have
already fulfilled Dow's financial responsibility for the disaster. However, contrary to the
belief that Dow should be equally responsible for the disaster, Dow did not purchase UCC's
Indian subsidiary, Union Carbide India Limited (UCIL). That was sold by UCC in 1994 and
renamed Eveready Industries India limited.
Factors leading to the disastrous gas leak include:
The use of hazardous chemicals (MIC) instead of less dangerous ones

Storing these chemicals in large tanks instead of over 200 steel drums.
Possible corroding material in pipelines
32
Poor maintenance after the plant ceased production in the early 1980s
Failure of several safety systems (due to poor maintenance and regulations).
Safety systems being
switched off to save
money—including the
MIC tank refrigeration
system which alone
would have prevented
the disaster.
The wrecked MIC plant that caused at least

10,000 have died in the years that have
passed, and 10 more are dying every month
due to exposure-related diseases.
The problem was made worse by the plant's

location near a densely populated area,
non-existent catastrophe plans and
shortcomings in health care and socio-economic rehabilitation. Analysis shows that the
parties responsible for the magnitude of the disaster are the two owners, Union Carbide
Corporation and the Government of India.
Announcing the verdict in a local court, Chief judicial magistrate Mohan Tiwari stated that
―An American corporation cynically used a third world country to escape from the
increasingly strict safety standards imposed at home.‖ This appeared to give an indication of
the sentencing severity to come, however the court went on to convict the seven accused
guilty of criminal negligence
33
And the sentence of a fine of 100,000 rupees each and jail for two years! To add insult to
injury, the convicted walked out within hours of the sentencing as they were all granted
bail.
5.2 A Deadly Timeline of Events
December 3, 1984 – Shortly after midnight, methyl isocyanate gas leaked from a tank
at Union Carbide India‘s Bhopal plant. A FIR was filed with the police. According to
the estimate of government agencies about 15,000 people die and several thousands
were maimed.
December 4, 1984 – Warren Anderson, then CEO of Union Carbide Corporation
(UCC). Came to India and was arrested. However, he was later released on bail. Mr.
Anderson went to the US and never returned. Several others accused, including Union
Carbide Indian chairman Keshub Mahindra, were also arrested.
December 6, 1984 – The case was transferred to the CBI.
March 1985 – The government enacted the Bhopal Gas Leak Disaster Act that
enabled it to act as the legal representative of the victims in claims arising of or
related to the disaster.
April 1985 – Union Carbide offered $5 million for a relief fund before a US district
court but the Indian government rejected the claim and demanded $3.3 billion instead.
May 1986 – All litigations against Union Carbide were shifted to Indian courts by the
US district court judge, which was appealed against.
January 1987 – The US Court of Appeals affirmed the transfer of litigation
December 1, 1987 – The CBI filed the charged sheet after investigation. The chief
judicial magistrate subsequently framed charges against the accused under the Section
304 Part (II) (culpable homicide not amounting to murder), Section 326 (voluntarily
causing grievous hurts by dangerous weapons or means) and other sections of Indian
Penal Code.
January-December 1988 – Arguments and appeals went on throughout the year
before the Indian Courts regarding compensation for the victims.
November 1988 – The Supreme Court of India asked the Government of India and
Union Carbide to settle the matter of compensation to the victims.
34
February 1989 – The Indian government and Union Carbide arrived at an out-of-
court settlement and the latter was to give $470 million by March 31, 1989.
1992 – Part of the $470 million was disbursed among victims. Mr. Anderson was
declared fugitive from law for ignoring court summons.
September 13, 1996 – The Supreme Court amended the charges against the accused
to 304(A) (causing death by negligence), 336(acts endangering life or personal safety
of others), 337 (causing hurt by endangering life or personal safety of others) and
other sections of IPC, which attract a maximum punishment of two years
imprisonment.
July 2004 – The Supreme Court of India ordered the release of remaining settled
funds to victims, 15 years after reaching settlement.
June 7, 2010 – All eight accused -- Keshub Mahindra, then UCIL chairman, Vijay
Gokhale, managing director, KishoreKamdar , vice president, J Mukund, works
manager, SP Choudhary, production manager, KV Shetty, plant superintendent, S L
Qureshi, production assistant of UCIL – held guilty for the disaster after 26 years of
tragedy. One of the accused – RB Roy Choudhary, then former assistant works
manager of Union Carbide India, died during the trial.2
5.3 Problems Contributing to the Tragedy
1. No maintenance supervisor was placed on the night shift and instrument readings were
taken every two hours, rather than the previous and required one-hour readings in order to
cut down cost.
2. The operators chose a dangerous method of manufacturing pesticides, there was large-scale
storage of MIC before processing, the location of the plant was close to a densely
populated area, there was under-dimensioning of the safety features, and the plant
depended on manual operations.
3. Deficiencies in the management of UCIL were also identified. There was a lack of skilled
operators due to the staffing policy, there had been a reduction of safety management due
2
See Annexure - 1
35
to reducing the staff, there was insufficient maintenance of the plant and there were only
very loose plans for the course of action in the event of an emergency.
4. It emerged in 1998, during civil action suits in India that, unlike Union Carbide plants in
the US, its Indian subsidiary plants were not prepared for problems regarding equipment
or safety regulations. No action plans had been established to cope with incidents of this
magnitude. This included not informing local authorities of the quantities or dangers of
chemicals used and manufactured at Bhopal.
5. The MIC tank alarms had not worked for four years.
6. There was only one manual back-up system, compared to a four-stage system used in the
US.
7. The flare tower and the vent gas scrubber had been out of service for five months before
the disaster. The gas scrubber therefore did not treat escaping gases with sodium
hydroxide (caustic soda), which might have brought the concentration down to a safe
level. Even if the scrubber had been working, according to investigations in the aftermath
of the disaster discovered that the maximum pressure it could handle was only one-
quarter of that which was present in the accident. Furthermore, the flare tower itself was
improperly designed and could only hold one-quarter of the volume of gas that was
leaked in 1984.
8. To reduce energy costs, the refrigeration system, designed to inhibit the volatilization of
MIC, had been left idle—the MIC was kept at 20 degrees Celsius (room temperature), not
the 4.5 degrees advised by the manual, and some of the coolant was being used
elsewhere.
9. The steam boiler, intended to clean the pipes, was out of action for unknown reasons.
Slip-blind plates that would have prevented water from pipes being cleaned from
leaking into the MIC tanks through faulty valves were not installed. Their installation
had been omitted from the cleaning checklist.
36
10. Water sprays designed to "knock down" gas leaks were poorly designed—set to 13
meters and below, and they could not spray high enough to reduce the concentration of
escaping gas.
11. The MIC tank had been malfunctioning for roughly a week. Other tanks had been used
for that week, rather than repairing the broken one, which was left to "stew". The build-up
in temperature and pressure is believed to have affected the magnitude of the gas release.
12. Carbon steel valves were used at the factory, even though they corrode when exposed to
acid. On the night of the disaster, a leaking carbon steel valve was found, allowing water
to enter the MIC tanks. The pipe was not repaired because it was believed it would take
too much time and be too expensive.
13. UCC admitted in their own investigation report that most of the safety systems were not
functioning on the night of December 3, 1984.
5.4 Solutions Implemented over the Years
1. A clinic established by a group of survivors and activists known as Sambhavna established

in 1995. Sambhavna is the only clinic that will treat anybody affected by the gas, or the
subsequent water poisoning, and treats the condition with a combination of Western and
traditional Indian medicines, for a period of 8 years of free treatment.
2. Having adopted some measures to control the disaster, UCC initiated an effort to identify
the cause. It took permission from the government to clean up the site and carried out the
work under the direction of state and central government authorities.
3. Widow pension of the rate of Rs 200/per month (later Rs 750) was provided in the year
1990. However the amount of the pension rate is paltry and should thus be revised.
4. The average compensation works out to Rs 12,410 per victim at the 1989 value of the
rupee. Compared to this, the US government paid an average of $1.8 million per victim of
9/11, One-time ex-gratia payment of Rs 1,500 to families with monthly income Rs 500 or
less was decided.
37
Each claimant was to be categorized by a doctor. In court, the claimants were expected to
prove "beyond reasonable doubt" that death or injury in each case was attributable to
exposure. In 1992, 44 percent of the claimants still had to be medically examined.
5. From 1990 interim relief of a mere Rs 200 was paid to everyone in the family who was
born before the disaster.
6. The final compensation (including interim relief) for personal injury was for the majority
Rs 25,000 (US$ 830). For death claim, the average sum paid out was Rs 62,000.
7. Effects of interim relief were more children from the affected area are sent to school, more
money spent on treatment, more money spent on food, improvement of housing condition.
8. Occupation rehabilitation: It is estimated that 50,000 persons need alternative jobs, and that
less than 100 gas victims have found regular employment under the government's scheme.
9. Habitation rehabilitation: 2,486 flats in two- and four-story buildings were constructed in
the "Widows colony" outside Bhopal. However the facilities provided to them are very
poor. The water did not reach the upper floors. It was not possible to keep cattle.
Infrastructure like buses, schools, etc. was missing in the area for at least a decade.
10. Compensation from Union Carbide

a) The Government of India passed the Bhopal Gas Leak Disaster Act that gave the
government rights to represent all victims in or outside India.
b) UCC offered US$ 350 million, the insurance sum. The Government of India claimed
US$ 3.3 billion from UCC. In 1999, a settlement was reached under which UCC agreed
to pay US$470 million (the insurance sum, plus interest) in a full and final settlement of
its civil and criminal liability.
c) When UCC wanted to sell its shares in UCIL, it was directed by the Supreme Court to
finance a 500-bed hospital for the medical care of the survivors. Bhopal Memorial
Hospital and Research Centre (BMHRC) was inaugurated in 1998. It was obliged to give
free care for survivors for eight years.
38
11. However On 24 June, 2010 Group of Ministers for Bhopal Gas tragedy case announced a
Rs1265cr package. The Union Cabinet, which considered the report of the Group of
Ministers on the 1984 disaster, accepted all its 22 recommendations.
The Cabinet meeting, chaired by Prime Minister Manmohan Singh, decided that ex-gratia
of Rs 10 lakh would be given to the kin of each killed in the tragedy, Rs 5 lakh to those
who suffered permanent disability, Rs two lakh each to people who suffered cancer and
total renal failure and Rs one lakh to those with temporary disability.
The ex-gratia would benefit 45,000 affected people and the amount would be paid after
adjusting the compensation already paid, Soni said. The government also announced
various packages for remediation, rehabilitation and other measures, taking the total
spending to Rs 1265.56 crore.
The Cabinet decided that additional material in support of the request for extradition of
Anderson may be put together by concerned agencies and the External Affairs Ministry
would thereafter press the request for extradition with the US government, she said. India
had made requests for Anderson's extradition (To give up the legal jurisdiction of a
fugitive to another government) earlier, the last being in 2008, but these have not been
entertained by the US.
39
6. Case Study II: TATA Stirs Controversy in Tanzania
6.1
Introduction
Tata is at the forefront of India's economic push into Africa, which has until now been
overshadowed by China's huge investments and loans on the continent. The conglomerate
boasts of having a "significant presence in almost all the major industrial sectors" in Africa.
In east Africa, where the large Asian population has also ensured close cooperation with
India for decades, the company carries significant influence with local trade officials eager
for foreign investment.
Among other businesses, Tata processes coffee in Uganda, assembles vehicles in Kenya and
builds agricultural machinery in Tanzania. But as the Chinese companies have learnt,
operating in Africa brings with it scrutiny from environmental and other watchdog groups.
In Uganda, plans by the Mehta Group, another large Indian industrial company, to clear a
quarter of a protected forest reserve in order to plant sugar cane triggered violent anti-Asian
protests
40
Among the first foreign companies to enter Africa, the Tata Group has a strong presence and
spread in the African business community. Tata Africa shares the core Tata values of
business ethics and social responsibility.
Established in 1994, Tata Africa Holdings operates as the nodal point for Tata businesses in
Africa.
Tata Africa Holdings has a strong presence in over 10 African countries with investments
exceeding US$100 million. The company was established in Johannesburg, South Africa and
serves as headquarters for Tata operations in Africa. The organization today employs over
750 people and operates in major industrial sectors such as information systems, engineering,
services, materials, consumer products and chemicals.
This case study focuses on 2 aspects:

· Rift Valley plan threatens to wipe out flamingos
· 'Bonkers' soda-ash plant plan will ruin fragile ecosystem in Africa.
Tata, along with Magadi Soda Co., a Tanzanian company, joined forces to build a soda ash
extraction plant in Tanzania. The Tanzanian government is all for the project. On the other
hand, environmental activists are opposing the plant because it would be near Lake Natron,
and it could possibly affect the lake's ecosystem and its neighboring dwellers. Tata was
planning to change the site of the plant so it would be built 32 km from the lake, but the
opposition still thinks it would negatively disturb the environment. It could also jeopardize
the Lesser Flamingo birds there, which are already endangered. Lake Natron is where two
thirds of Lesser Flamingos reproduce. Producing soda ash involves drawing out salt water
from the lake, and then disposing the water back to the lake. This process could interrupt the
chemical makeup of the lake. Twenty-two African nations are against the creation of the
project and have signed a petition to stop its construction.
Lake Natron is the world‘s most important breeding site for lesser Flamingos, accounting for
75 per cent of the global population that is, 1.5 million to 2.5 million flamingos.
41
The Magadi Soda Company is Africa‘s largest soda ash manufacturer and one of Kenya‘s
leading exporters. The company was established in 1911 and is a wholly owned subsidiary of
Brunner Mond Group, a Tata Chemical subsidiary.
Magadi Soda Company is a leading producer of sodium carbonate and salt. The company
employs over 450 people at its facilities at Lake Magadi. It recovers trona ore from surface
deposits at the base of the Rift Valley and converts it into sodium carbonate (soda ash). The
operations at Lake Magadi are situated 120km south west of Nairobi. The soda ash is
transported by rail to the Port of Mombasa for onward shipping.
Soda ash is an essential constituent in the manufacture of glass and important in the
production of detergents and industrial chemicals. Over 95 per cent of the output is exported
to markets in South East Asia, the Indian sub-continent, Africa and the Middle East.
INDIA‘S Tata Chemicals, which had planned to set up a controversial soda ash
manufacturing plant, in joint venture with the Tanzanian government with an investment of
around $500m, has decided to put the project on hold in the face of fierce opposition from
environmentalists.
The proposed soda ash factory on Lake Natron's shores is feared to have a negative impact
not only on the ecosystem of Tanzania but that of Kenya as well.
Tata Chemicals had formed a joint venture ‘Lake Natron Resources Ltd‘ with the Tanzanian
government for exploring the possibility of setting up a Soda-Ash manufacturing plant there
which was opposed by environmentalists, who argued that the proposed plant may affect
flamingos bird population there and affect the mineral balance of the Lake Natron.
The Tanzanian government responded to it by shifting the location of the plant 35 kilometers
away from the lake shore but the move was again opposed by the environmentalists as it
comes under the Ramsar wetland area.
According to Tata Chemicals Ltd together with officials of the state-run National
Development Corporation (NDC), the initial environmental and social impact assessment
(ESIA) report for the project. But according to the chief executive officer and coordinator of
the Wildlife Conservation Society of Tanzania (WCST), Lota Melamari, the project has the
42
potential to damage and destroy the East African lesser Flamingo population through
disrupting the birds breeding at the lake. Lake Natron is the world‘s most important breeding
site for lesser Flamingos, accounting for 75 per cent of the global population.
Globally there are between 2.2 to 3.3 million flamingos, with between 1.5 and 2.5 million
located on East Africa‘s Rift Valley lakes alone.
TATA, which has entered into a joint venture with Tanzania's government, plans to install
heavy machinery on the shoreline to extract half a million tones of soda ash, or sodium
carbonate, each year.
Tata also plans to build a coal-fired power station and house 1,200 construction workers on
site. However after the implementation of this plan the chances of ―lesser flamingos‖
continuing to breed at Lake Natron in the face of such mayhem are next to zero.
Tata had finally abandoned its initially proposed large soda ash plant, which was to be built
on the shores of Lake Natron. The project is vehemently opposed by green activists
worldwide. The developers have now abandoned their original location, but are still
considering alternatives, so a revised version of the development may emerge.
6.2 Community Initiatives
Tata Africa is actively involved in initiatives that promote the social and economic
development of African communities.
In keeping with the Tata Group's rich tradition of giving back to society, Tata Africa is
actively involved in initiatives that promote the social and economic development of African
communities. The company is currently involved with several community development
programmes geared towards enhancing the lives of the African people.
6.2.1. The Adult Literacy Project
The project is a partnership between Tata Consultancy Services and the WDB Trust, an
organisation that works in the areas of micro finance, entrepreneur training and education of
impoverished rural women. Adapted from TCS's computer-based functional literacy
43
programme that was implemented in India, the project was replicated in the North Sortho
(Sepedi) language in South Africa. The initiative has so far trained 65 people to read, with
plans to introduce more languages to the programme and thus increase its reach.
The first programme was conducted in early 2004 with a group of 62 women. It took exactly
10 weeks for the women to become literate (40 women successfully completed the course).
6.2.2. Skills-development Programmes
Tata Africa and Kgabane have joined in partnership to promote skill development
programmes in South Africa. Kgabane is an organisation set up by the Ministry for Minerals
and Energy in partnership with Harmony Gold and Mintek (the South African R&D centre
for minerals technology). The two organisations have undertaken training of people from
rural South Africa with the aim of improving livelihood and increasing employment
opportunities. As part of the programme, trainees travelled to India for training in jewellery
making at the Titan plant in Bangalore, and in decorating ceramic ware at the Tata Ceramics
factory in Kochi.
Tata Steel KZN operating in South Africa has launched several programmes aimed at the
local communities. Main among these are education, skill development and women
empowerment-related activities. The company has identified several local schools that are in
need of funding. Tata Steel KZN is also working on schemes to hire and train local staff for
its plant.
44
7. Conclusion
Globalization has made the consumer pivotal to all calculations. If the customer wants a
product I must be made available. Economic restrictions and trade policies that earlier
determined what would be produced, and how are now looked up with distaste. Today,
consumers get the first preference and any obstruction towards getting these goods and
services across to them is abomination to the ideology of globalization. In developing
countries like India, globalization has impacted the way businesses conduct business.
Increasing competition, standard of living, and merging different cultures has truly changed
the life of the nationals in the country. People prefer foreign brands, and are able to afford
such brands due to the possibility of jobs in multinational countries which leads to higher
paychecks, shareholders enjoy a fair return on investment, etc. The FDI of a country like
India is increased and in return our balance of payments is very favorable and our country‘s
reputation is enhanced on the global market.
For instance, those who had campaigned against English language as a medium of school
instruction in India would find themselves in a dreadful minority today. Hence the mixture of
east meeting west has impacted every country today, not just India. Poor villagers and
socially backward classes want education to extricate themselves from the past so they can
confidently meet the future. Not just education, other public goods such as health, transport
and energy are equally sought after across lasses without paying as much attention to who is
providing them but rather to the fact that they should be available to the user.
Although there are several positive effects to globalization in relation to business ethics, there
are drawbacks too. When a MNC or TNC sets up a base in a developing country like India,
various changes take place. Changes such as social constraints like language, culture, social
and environmental issues have to be obeyed. But MNC giants do not always adhere to these
conditions; the Bhopal Gas Tragedy mentioned in this report is one of the world‘s largest
industrial-globalization oriented disasters. Hence, globalization and business ethics is a
controversial aspect today, learning how to control it and adapt will continue to be a
challenge.
45
8. Bibliography
Books:
1. Business Ethics and Global Values
Pages 3-67, 75-143, 271-292
By: S.K. Bhatia
2. Globalisation and Business Ethics

Pages 7-25, 65-80
By: Karl Homann
3. Business Ethics
Pages 1-13
By: Dr. A.K. Gavai
4. Management Ethics
Pages 3-4
By: Norman E. Bowie & Patricia H. Werhane
5. Business Ethics & Professional Values

Pages 11-15
By: Dr. A.B.Rao
6. Ethics Incorporated: Top Priority and Bottom Line

Pages 189 – 197
By: Dipankar Gupta
7. Management in India
Pages 221 – 237
By: Herbert J. Davis, Samir R. Chatterjee & Mark Heuer
8. Understanding Business Ethics

Pages: 18 – 21
By: Crane and Matten
9. Business Ethics
Pages: 72, 73, 174, 175 200, 201, 223
By: J.C. Vohra
10. Business Ethics

Page 50
By: C.S.V. Murthy
46
Newspaper Articles:
1. Economic Times: ―The Bhopal Gas Tragedy‖
Dated: July 8, 2010
2. Times of India: ―Will The Guys Stop ‗Playing‘ At Work‖

Dated: July 22, 2010
3. Economic Times: ―Companies Take On Role Of Counselors‖

Dated: July 21, 2010
Internet Websites:
1. http://en.wikipedia.org/wiki/Bhopal_disaster
2. http://en.wikipedia.org/wiki/Globalization
3. http://www.associatedcontent.com/article/317878/globalization_and_ethics
4. http://www. Referenceforbusiness.com/small/Eq-INC/Globalization.html
5. http://www.jstor.org/pss/3857689
47
Annexure – I: Economic Times “Bhopal Gas Tragedy”
48
Annexure – II The Times of India “Will The Guys Stop „Playing‟

At Work”
49
Annexure – III Economic Times: “Companies Take On Role Of

Counselors”
50

Global Is at Ion

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ST.

ANDREW’S COLLEGE OF ARTS, SCIENCE AND COMMERCE

SUBJECT: BUSINESS ETHICS AND CORPORATE SOCIAL

This is to certify that the following students:

Ms. Priyanka Anderson Roll No. 3501

Of class T.Y. B.M.S. Division ‗B‘ Semester V, have successfully completed

Globalisation and Business Ethics

Students Ms. Priyanka Anderson Roll No. 3501

Title of Project: Globalisation and Business Ethics

Department: Management Studies

Year of Studying: 2010 – 2011

Internal Examiner External Examiner

It gives us immense pleasure in acknowledging the valuable and co-operative assistance

Ethics may be referred to as some standardized form of conduct/behaviour of individuals

1.1 Business Ethics

1.2 An Overview: Globalization and Business Ethics

2. Indian Ethos in Management

The Semantics The Basis for

2.1 Global imperatives and indigenous ethical values in India

2.2 A Macro Glance

2.3 The Semantics of Business Ethics

2.4 The Basis for Will to Ethics in Business

Another general ethical problem relates to social consequences of employment contraction in

Fifth, how is ―corruption-in-a-poor-society‖ to be dealt with on a footing different from

2.5 Will to ethics in the practical business world

3. Concept of Culture & Types of Corporate Culture

3.1 Components of Culture

Language: Language can become confusion or convey clear meaning.

Time: Time consciousness forms punctuality of Japanese or Americans contrary to the

3.2 Cultural differences and Global Business

programs'. These include globalization of scientific and technological research, involvement

As globalisation advances, business practices become increasingly uniform. Business

3.3 Differences in Concepts

3.4 Ethics in the East and West

Societal Relationship basis

Systems built on relationships

Opinions and decision taken

Errant Managers face

4.1 Relevance of Globalisation

Globalisation as defined in terms of the deterritorialization of economic activities is

4.2 Cultural Issues

As business becomes less fixed territorially, so corporations increasingly engage in overseas

4.3 Legal Issues

4.4 Financial Accountability Issues

4.5 Environmental Issues

ENVIRONMENTAL POLLUTION PROBLEMS OF WASTE

ENVIRONMENTAL HAZARDS DEPLETION OF RESOURCES

4.6 Changes in Marketing Functions

incomplete interpretation of marketing and represents product orientation. It stressed on

produced. Consumer is the

Ignoring the needs

4.7 Technological Changes

4.8 Role of Government

The gradual emergence of multinational networks integrated by large organizations is the

4.9 Global Regulators and Standards

4.10 Impacts of Globalization on Different Stakeholders:

STAKEHOLDERS ETHICAL IMPACTS OF GLOBALIZATION

Not Adhering to Labour Laws

Violation of Human Rights

Violation of Copyrights & Software laws

5. Case Study I: The Bhopal Gas Tragedy

Factors leading to the disastrous gas leak include:

The use of hazardous chemicals (MIC) instead of less dangerous ones