Global Business and Ethics
Organizational Ethics and Social Responsibility 216
University of Phoenix
May 12, 2009
Global business is the expansion of a company’s operations into another country. Globalization impacts a countries society and economy by benefiting human rights, bringing technology into developing countries, reducing poverty, and encouraging partnerships. An ethical dilemma a company could face would be complying with local laws that conflict with an established code of ethics. If ethical conflicts exist, stakeholders could be put in a position of having to influence the company to take action either by boycotting their products and services, or by disinvesting. If they choose to disinvest, they would sell their stake (shares) in the company possibly driving the value of the stock down.
In an effort to expand business, General Motors opened a factory in South Africa (1926). In doing so, it became a multinational company through their involvement in two separate nations. They saw this as an opportunity to expand their market and make a profit will a expanding a market that was ripe with opportunities.
Factors that contributed to decision were the nation’s stable government, vast market, cheap labor, and its abundance in natural resources. Companies prefer to investment in countries that have political stability to minimize the risk of losses, furthermore, they will encourage and help preserve this state. With the over 20 million inhabitants, the market was ripe for growth. It also allowed them to be a main supplier in the nation and introduce innovative technology. Potential profits increased due to the large availability of cheap labor comprised on the black community. The standard of living of the blacks was extremely low, and wages paid were significantly lower than the white workers. As more blacks were brought into the workforce, the market for...