Global Business and Ethics
Global Business and Ethics
Globalization is not just the operation of a business in a foreign country but that they divide their activities in different countries. The business produces their product or good there and exports the good to other countries such as The United States. Globalization affects the world because it enables large operations to buy a manufacturing plant in another country and produce goods at a lower hourly wage that is a custom to the native people of their country. When American companies outsource their goods to another country there have been ethical issues that become evident due to globalization. An example would be the Bhopal Case in involving Union Carbide Plant in Bhopal, India.
Background
Union Carbide produces Sevin a widely used agricultural pesticide Union Carbide wanted to manufacture the Sevin in India. According to DeGeorge (2005) “Sevin is made from methyl isocyanate (MIC), which is kept in large vats in liquid form, prior to turning into pesticide” (¶6). In 1973 India had a Foreign Exchange Regulation Act this allowed 40 percent foreign ownership of companies located in India. India allowed an American company Union Carbide to own 50.9 percent of the company and Indian Government keeping the remaining 49.1 percent of company shares. On December 3, 1984 liquid from one of the tanks turned into a gas form and escaped through the plant’s vents. It created a poisonous cloud that rose silently above Union Carbide plant. Approximately 3,800 people died and several thousand other individuals experienced permanent or partial disabilities the perception from the India’s government was outrage.
Ethical Perception
The Indian government did benefit from Union Carbide and their partnership with the company. When they joined as stakeholders in the company their country received benefits. The main benefit was the sevin the plant produced was sold in India and increased crop yields by about 10 percent, providing food for additional 70 million Indians. Union Carbide also employed a large population if Indians who lived in surrounding small villages. The jobs provided security and food for their families.
Risks