In light of globalisation, to what extent is 'social responsibility' a business issue

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In light of globalisation, to what extent is

‘social responsibility’ a business issue?

David Ripley

Many organisations face major challenges today attempting to balance the search for competitive advantage with ethical and responsible business operations. As organisations expand their operations to various parts of the world the pressures exerted on them in terms of ethical and socially responsible business practices can be seen to grow. Disasters such as the Exxon Valdez oil spill, 1989 and the on-going debate of 'exploited' foreign workers in the case of the Nike Corporation (US) and Gap Incorporated (US) also do little for multinational reputation. This essay will demonstrate to the reader what globalisation is, take you through some of the models of ethical business behaviour and finish with a conclusion into whether acting ethically is actually a business issue.

Major contemporary issues affecting each and every one of us today are without doubt the globalisation of the world and the accompanying aspect of business responsibilities that is arising from a more ‘connected’ world. We are now surrounded by a market place that incorporates brands from around the world. Everywhere we look we see cars from the United States of America, clothing materials from Indonesia and electronics from Japan. As from "the mid-nineties the discussion involving the question of ethics and social responsibility...has been gaining prominence" (Coutinho et al 2005:1). One of the main catalysts for this has been globalisation. People around the globe have become more connected to each other than ever before. However, although world leaders, chief executives and everyday people such as us, frequently use the term ‘globalisation’ what exactly does it mean?

While some people think of globalisation as primarily a synonym for global business, it is much more than that. "The 'Era of Globalisation' is fast becoming the preferred term for describing the current times. Just as the Depression, the Cold War Era, the Space Age, and the Roaring 20's are used to describe particular periods of history; globalization describes the political, economic, and cultural atmosphere of today." This is further supported by Friedman (2000:12) who wrote "globalisation is not a phenomenon. It is not just some passing trend. Today it is an overarching international system shaping domestic politics and foreign relations." Naturally depending on your life to date and your societal norms, your view on globalisation could be ‘influenced’ to certain standpoints. Nonetheless to gain an understanding for the basis of the discussion many aspects of globalisation must be looked at. As Holliday et al (2002:43) point out, “there has long been a global market. International economic exchanges have been taking place for thousands of years…[and]…international trade flourished as never before just prior to the First World War.” In addition Holliday et al (2002:43) go on to explain that “in its widest sense, globalisation refers to the rapid acceleration in the global exchange of information, ideas, goods, services, technology, values, people, culture, microbes, weapons, and capital. It implies a rising level of broad-based interdependence among nations.”

However there is the belief between other authors that a large part of globalisation is to do with purely economic factors and indeed there are those who believe that globalisation is indeed a ‘new phenomenon.  As Wall et al (2001:10) point out “seeking globalisation as a new phenomenon involves at least three key elements: shrinking space; shrinking time; and disappearing boarders.” Hirst et al (1996:84) also support this view of globalisation as an economic factor as they believe that globalisation can simply be seen as the “internationalisation of large and growing flows of trade and capital investment between countries.” Sander (1996:37) then takes this further as he believes “globalisation has become a prominent catchword for describing the process of international economic integration.” However to simply categorise globalisation as a single aspect is unfeasible and as Wall et al (2001:9) state “ a one-dimensional view of globalisation…is likely to result in only a partial picture at best.”

Globalisation therefore broadly refers to “the expansion of global linkages, the organization of social life on a global scale, and the growth of a global consciousness, hence to the consolidation of world society.” Such a definition it seems captures much of what the globalisation commonly means. However as globalisation encompasses several large processes and is historically complex, the definitions available will undoubtedly differ in what is emphasized. Depending on which angle (for example, is it good or bad?) globalisation is looked at definitions will always vary in the particular driving force they identify. However Spybey (1996:9) describes the process as “political, economic and cultural institutions becoming globalised. Today there is virtually no one on the planet who can participate in social life without reference to global institutions in some form or other.” Ulrich Beck and Anthony Giddens et al (1994:10) refer to this as “reflexive modernity.” Spybey (1996:9) describes ‘reflexive modernity’ “as a universalised form of life that touches on everyone and causes individuals to orient their actions towards it.” Beck (2000:96-100) also sees the influence of globalisation as “an irreversible process...[due to]...geographic widening and growing international market interaction, the linking of financial markets throughout the globe and the increasing power of transnational organisations.”

Obviously globalisation is therefore very much a contemporary issue and one that will carry on being so a long time from now. Just when or indeed if globalisation will end is hard to categorise however multinational corporations it appears will continue to impinge on our daily lives well into the foreseeable future. Undoubtedly one of the resulting management prerogatives of this ‘globalisation era’ has been the concept of ‘Corporate Social Responsibility’ (CSR) and the ethical dimensions from which they are derived. Ethics is a branch of philosophy that looks into the nature and standards of human actions. In the context of the global market place and with reference to those organisations who operate within it, ethics can be best described as “the moral considerations of the activities of an organization and the standards of conduct and methods of doing business by organizations that provide assurances of professionalism in client relationships. A system or code of conduct that is based on universal moral duties and obligations, which indicate how one, should behave. It deals with the ability to distinguish good from evil, right from wrong, and propriety from impropriety.” From an organisational perspective this can include areas such as fundraising, financial sustainability, accountability, market activity and the treatment of individuals both within and effected by a companies activities.

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With the developing global market place, the number of ‘global companies’ has began to grow and along with it, so has their power both in an industry setting and also on the wider sociocultural scale. Naturally this has led to organisational relationships both with societies at large and markets undergoing transformation. For example in the light of troubling allegations of the use of sweatshops in manufacturing GAP Incorporated (US) have now embarked on a scheme to “improve garment factory conditions...[using]...this as a central element to their social responsibility. [However Gap's] social commitments do not stop there. Community giving and volunteerism are ...

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