Summary chapter 5 Globalization and society.docVIP

Chapter FIVE gLOBALIZATION AND SOCIETY OBJECTIVES ? To identify problems in evaluating the activities of multinational enterprises (MNEs) ? To evaluate the major economic effects of MNEs on home and host countries ? To understand the foundations of responsible corporate behavior in the international sphere ? To discuss some key issues in the social activities and consequences of globalized business ? To examine corporate responses to globalization Chapter Overview Globalization has become a major socioeconomic force and topic of debate in the twenty-first century. While Chapter One examined the forces and criticisms associated with the globalization process, Chapter Five focuses upon the impact of foreign direct investment on home and host countries. Following an explanation of the balance-of-payments effects of FDI, a series of ethical issues concerning the social responsibilities of MNEs is explored. The cultural and legal foundations of ethical behavior are examined, and the challenges of global warming, pharmaceutical sales, and child labor are highlighted. The chapter concludes with a brief discussion of the need for corporate codes of ethics. Chapter Outline OPENING CASE: ECOMAGINATION AND THE GLOBAL GREENING OF GE In 2005, CEO Jeffery Immelt of GE announced a new and ambitious strategy designed to demonstrate that an ecologically conscious conglomerate can cultivate the bottom line while doing its duty towards the global environment. GE surprised both investors and industrial customers who had long seen GE as an ally in the struggle against environmental activists. The new initiative, called Ecomagination, consists of three parts: 1) reducing greenhouse emissions, 2) doubling investment in RD in “clean” technologies, and 3) increasing revenues from those same technologies. With half its markets outside the United States and many countries already enforcing limitations stipulated by the Kyoto Protocol, GE felt it was pursuing its