To Evaluate: Measure the impact of globalization on Economy

1. By
Prof. Nikhil Bangde
(S. B. Jain Institute of Technology, Research &
Management)
Business Ethics
Module VI- Globalization & Business Ethics

2. This Unit will help You
[Course Outcome (CO)]
To Evaluate:
Measure the impact of
globalization on Indian economy
2 Prof. Nikhil Bangde, Asst. Professor, SBJITMR

3. Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
3
INDIA’s Case of
GLOBALIZATION
via
LIBERALIZATION

4. Globalization
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
4
 Globalization refers to the shift toward a more integrated
and interdependent world economy
 Globalization involves the integration of technology,
markets, politics, cultures, labor, production &
commerce. Globalization is both the process and the
result of this integration.
 Globalization is used to describe the growing
interdependence of the world's economies, cultures &
populations, brought about by cross-border trade in
goods and services, technology & flows of investment,
people, and information

5. Globalization
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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 One of the concern with globalization is the expansion of
international trade to a point where national markets
have been overtaken by regional trade blocs, leading
eventually to a global marketplace.
Drivers of Globalization
i. Decline trade & investment barriers
ii. Technological changes

6. Globalization
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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 Technology expansion especially in transportation &
communications
 Govts. are removing international business restrictions
 Institutions providing services to ease the conduct of
Int. Business
 Consumers knowledge about & want of foreign goods
and services
 Competition has become more global

7. Cultural Globalization
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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 It refers to the transmission of ideas, meanings &
values around the world to extend and intensify social
relations
 This process is marked by common consumption of
cultures that have been diffused by the Internet,
popular culture media & international travel
 It is one of the three main dimensions of globalization
other being economic globalization & political
globalization
 Two most successful global food & beverage outlets:
McDonald's -39,198 (as of 2020)
Starbucks-32,646 (as of 2020)
American companies are best examples of globalization
operating worldwide

8. Socio- Culture of Globalization
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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 Globalization has left back its footprints at every sphere
of life. Not only in India, but the interchange of world
views and ideas has resulted in a major transformation
of the lifestyle and living standard of people globally.
 There is increasing interaction between people of
different countries, as a result food habits, dress habits,
lifestyle & views are being internationalized
 Globalization has influence the culture of one country
to another country

9. Socio- Culture of Globalization-
India
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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 Globalization has brought to India new technologies,
new products and also the economic opportunities
 MNCs are looking at India in a big way, and are making
huge investments to set up R&D centers in the country
(India has made a lead over other growing economies for IT &
Business Processing)
 There has been both positive and negative impact of
globalization on social & cultural values in India.

10. Positive Impact of Globalization
on Indian Culture
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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 Globalization has allowed for the spread of customs,
language & products
 Globalization has allowed for people to be able to attain
goods & services which are not previously available
 It has allowed people to become familiar with the
culture of other country allowing for greater
understanding
 Incoming of foreign companies means more local
people getting employment

11. Negative Impact of Globalization
on Indian Culture
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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 Indian rich culture getting diluted with westernization
 Joint families has given way to nuclear families, as
most people shift to metro cities for employment
 Increasing number of divorce cases & extra-marital
affairs
 Increase in adultery
 Social gatherings have became less
 Negative impact on Food, Clothing and Dialect

12. Multinational Enterprises (MNEs)/
Multinational Corporations
(MNCs)
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
12
• Multinational Corporation (MNC) or Transnational
Corporation (TNC), also called Multinational Enterprise
(MNE), is a corporation or enterprise that manages
production or delivers services in more than one country
• MNE’s/MNC’s are corporations that “own or control
production or service facilities outside the country in which
they are based”
• MNE’s/MNC’s are also referred to as global, transnational
& international companies

13. Common Characteristics of
MNC’s
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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• Operating a sales organization, manufacturing plant,
distribution center, licensed business, or subsidiary in at
least two countries
• Earning an estimated 25 to 45% of revenue from foreign
markets
• Having common ownership, resources, and global
strategies

14. MNC’s Benefits for Host
Country
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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• Hire local labor
• Create new jobs
• Co-venture with local entrepreneurs & companies
• Attract local capital to projects
• Provide for and enhance technology transfer
• Develop particular industry sectors
• Provide business learning and skills
• Increase industrial output and productivity
• Help decrease the country’s debt and improve its balance
of payments & standard of living

15. Host Country Benefits for
MNC’s
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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• Low costs of production that enable MNE sell its
products in the lower prices & get higher income
• Less stringent laws and regulations in host
country compared with the home one and make it
more easier to operate

16. MNC’s Drawbacks for Host
Country
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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• Domestic businesses may not be able to compete with
MNCs & some will fail
• MNCs may not feel that they need to meet the host
country expectations for acting ethically & in a socially-
responsible way
• MNCs may imposing their culture on the host country, at
expense of the richness of local culture
• MNC's may use natural resources of the host country
indiscriminately & cause depletion of resources
• Profits earned by MNCs may be remitted back to the
MNC's base country rather than reinvested in the host
economy

17. Host-country Perspective towards
MNC’s
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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• MNC’s can dominate & protect their core technology,
R&D, thus treating host country as a consumer, not a
partner or producer
• MNCs can destabilize national sovereignty by limiting a
country’s access to critical capital & resources, thereby
creating a host-country dependency on the MNC’s
governments and politics.
• MNCs can create a “brain drain” by attracting scientists,
expertise, and talent from the host country to their
parent country

18. MNC’s
(Contd..)
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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• MNEs can create an imbalance of capital outflows over
inflows
• MNEs can disturb local govt. economic planning &
business practices by exerting control over the
development and capitalization of country’s
infrastructure
• MNEs can destroy, pollute & endanger host-country
environment and health of local populations.

19. Conduct
(MNC Guidelines in dealing with Least
Developed Countries (LDC) by DeGeorge)
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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• Do no intentional harm
• Produce more good than harm for the host country
• Contribute to the host country’s development
• Respect human rights, local culture
• Pay fair share of taxes
• Cooperate with local government as partners
• Attend to actions, consequences & failures of the firm
• Maintain high safety standards and controls
• Protect the natural environment

20. Whistle Blowing
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
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• Release of information by a member or former
employee of an organisation that is evidence of
illegal and/or immoral conduct in the organisation or
conduct in the organisation.
• Whistle Blowing can only be done by an member in
the organisation not a witness of a crime or a
reporter

21. Types of Whistle Blowing
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
21
1. Internal Whistle Blowing
When an individual advocates beliefs or
revelations within the organization.
Ex: Executive reporting to HR Manager about bribery taken
by his
immediate superior
2. External Whistle Blowing
When an individual advocates beliefs or
revelations outside the organization
Ex: Executive reporting to news channel about his bribery
taken by his
immediate superior

22. Whistle Blowing
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
22
• Whistle Blowing is something that can be done only by a
member or former member of an organisation
• It must be an Information that is not available for public
• It should be an evidence of some significant kind of
misconduct on the part of an organisation
• Information must be outside normal channel of
communication
• Release of Information must be something that is done
voluntarily as opposed to being legally required
• Whistle Blowing must be undertaken as moral protest. The
motive must be correct some wrong not to seek vigilance or
personal advancement

23. Conditions for Justified
Whistle Blowing
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
23
i. Situation of sufficient moral importance
 If the situation of information is to disclosure people's live at
stake
Ex: Side-Effects of drug/medicine if not prescribed in the cover of
medicine & information is releaved to public by whistle blower
ii. Situation when all facts of information are properly
understood with their significance
 Whistle Blower must do much documentation and other
corrections as possible because he/she is strong obliged to
people
 An Employee should not jump into conclusion without much
clarification
 If significance of information is genuine it could be justified

24. Conditions for Justified
Whistle Blowing
Prof. Nikhil Bangde, Asst. Professor,
SBJITMR
24
iii. All internal channels have to be utilized without a step
short
of Whistle Blowing
 Whistle Blowing should be last not the first resort
 Its justified when there in no morally preferable alternatives
iv. Best way to Blow the Whistle
• To whom the information is the be revealed.
• Agencies like Environmental Protection Agency or
Exchange Commission can spark an investigation
• Local investigation bodies FBI or attorney

25. This Unit will help You
[Course Outcome (CO)]
To Evaluate:
Measure the impact of
globalization on Indian economy
25 Prof. Nikhil Bangde, Asst. Professor, SBJITMR