Chapter Twelve

International Business and Globalization

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 Ethical Relativism Revised
• Do not assume that diverse cultures have diverse
ethical values
• Principles that are held may not be practiced
because of circumstance not abandonment of the
principle (bribery)
• The preservation of one’s integrity is necessary
because integrity is the very core of one’s self
• Be clear about how ethical is defined (different
cultures may have a better view than the West)
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 International Rights
• Moral minimum - acknowledge the “negative
duty” to do no harm
• Moral maximum – the greater the power the
more the responsibility to provide positive
benefits and support to communities
• Donaldson
– United Nations “Universal Declaration of Human
Rights”
• DeGeorge
– Ten shoulds for multinational corporations
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 Context of International Business
• Globalization defined “process of international
economic integration”
• Free Trade – pursuit of profit within social and
economic arrangements that secure free and
open competition.
– This will
• Allocate resources to their most highly valued use
• Distribution in this manner will produce the greatest good
for the greatest number of people
• Improve poverty
• Reduce conflict between nations

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 Counter view
• Create a “race to the bottom”
– Lowest wages, lowest environmental standards,
lowest health and safety, lowest equal rights and
lowest level of self-determination

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 Does creation of mobile jobs support
the poor
• As jobs are exported lower level jobs
disappear in one country but appear in
another because people will have to choose
between economic death or a low paying job
• Reduces people to an economic equation and
disregards theoretical benefits such as
community

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 Behavior in other countries
• Use of contract labor as a means of avoiding
responsibility

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 Impact of Trade barriers
• Regulation bars access to markets (tuna,
hormones in beef)

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 Impact of Global Organizations
• World Trade Organization
• World Bank
• International Monetary fund
– Agenda - if you embrace western capitalism then you receive
support
• Defense
– Regulation seems to increase environmental, worker, and
consumer protection
– Thee organization were created by governments in the countries
regulated
– These organizations are courts or arbitrators trying to resolve
conflict. This is best done in private rather than in public forms.
Remember they are not legislative bodies

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 Set of moral principles that distinguish
what is right from what is wrong.

 Evaluates human practices.

 Prescriptive advice on how to act morally.

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 Branch of ethics that examines ethical rules and
principles within a commercial context.

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• In places
 Islam Islam,theethics governs
highest emphasisall
onaspects of
ethical values
life.
in all aspects of human life.

•  The Prophet (P.B.U.H) said:

• "I have been sent for the purpose of perfecting

good morals."

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HONESTY:

 Secret of success in business.

 Islam encourages truthfulness in business

transactions and raises the status of a truthful
merchant.

 Allah blesses business dealings if both the buyer and

the seller are true to each other.

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“HONESTY IS THE ONLY POLICY”

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Trust is a moral virtue and duty incumbent on a
Muslim in the performance of his affairs.

 It demands sincerity in work, avoid fraud, deception,

and other dubious means in selling his merchandise.

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 Treat people equally.
 Traders should moderate
in all things without profitable side party.
 fair or equal treatment of all our customers.
 consider fair and unbiased and gives the right to
the right.

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Islam puts certain conditions and restrictions to
obviate the chances of bitterness between the
employer and employees.

Fair wages on time.

good working conditions.
suitable work and excellent brotherly
treatment
should be provided to the workers.

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what Islam allow:
 seller has right to place Profit as much he
wants but when there is alternative.

 If there is monopoly in some product then

the profit margin need to be small.

what ethics says:

 In any situation your profit margin
should not be double than your cost.

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 Bribery. (Al-Baqarah: 188)
 Usurping others’ property. (Al-Baqarah: 188)
 Fraud. (Al-Imran: 161)
 Stealing and Robbery. (Al-Maida: 38)
 Income from sources of vulgarity. (Al-Noor: 19)
 Gambling. (Al-Maida: 90)
 Wine and its business. (Al-Maida: 90)
 Interest. (Al-Baqarah: 275)
 Hoarding of foodstuff.

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WHY ISLAM PROHIBITS SUCH TYPE
OF BUSINESS ?

Islam prohibits certain type of business due to the

“concern to protect health and life”
(Zinkin 2005).

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The Prophet said:

“ A truthful and trustworthy merchant

is associated with the prophets. ”

(Al-Tirmidhi, Hadith 50)

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