Contents

Introduction: 3

Link between Economic Globalization and Sustainability: 3

Ethical Issues in Economic Globalization: 5

Relevance for Business – Threats & Opportunities: 6

Threats: 6

Opportunities: 7

Ethical and Sustainable Response: 7

Conclusion: 8

Bibliography. 10

Introduction:

Economic globalization refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies (Shangquan). As we understand the modern economy is spreading its reach to all parts of the world with advancements in communication and transportation technology, people are getting more awareness about brands and products that are popular in different parts of the world. There is tremendous surge in the commerce transactions and flow of goods,thus making the shift in power from military based to commerce based dominance.  Developing economies like China & India are likely to replace the existing power houses USA and Russia in terms of their dominance globally and in their highly concentrated domestic market. As economies compete to gain power over the other, a lot of impact on environment, people – both within and outside its borders, political landscape and social setup is seen to sustain this growth and desire to dominate the globalized economy. In this quest are we breaching ethics or gaining the lost glory, are we trying to build a sustainable future or growing at the cost of somebody else’s sustenance – these are some harsh realities that need a lot of moral thinking to understand how economic globalization is impacting these social norms both locally and globally (Shangquan).

Link between Economic Globalization and Sustainability:

            For an economy to globalize it has to be sustainable in terms of the capital holding to sustain this growth. At the same time for it to benefit the society and the environment in future, this growth has to ensure that it adopts sustainable practices to reduce carbon footprint, pollution, man-made disasters and resource disparity. The industrial revolution in the 18^th and 19^th century had seen some very important inventions and though the major trade was carried out in the western part of the world it has still given rise to many sustainability issues like the concerns over usage of Atomic bombs. The rampant industrialization required lots of energy to supply manufacturing hubs. A point to understand here is that, had there been efforts earlier to foresee how these would impact the natural resource depletion, then by now we might have seen major break-through in using sustainable energy sources. With modern growth shifting to China, India, Brazil – the need for energy resource again is the issue leading to impact on the environment and now expecting these economies which are in their growth stage to come up with solutions. The issues of environment sustainability become important with rising greenhouse gas emissions, depleting forest cover and pollution of water bodies due to increased discharge of waste into rivers from industries.

            Movement of people from one place to another also burdens the resources of that particular country as the rate of consumption is higher. Better job prospects, improved standards of living and better wages are some of the key reasons which force people to migrate. The average temperature of earth is rising by a margin every year and this is slowly reaching the threshold value. If we don’t take strict actions in sustaining our environment then this effect is going to be permanent and reversing it would become impossible. Technology has played a key role in fuelling this growth yet at the same time this technology can be a cause of concern for the human settlement. Take the case of Fracking to extract shale gas. There have been instances where impact on groundwater has been reported and is a posing a serious question on the sustainability issues within the neighboring areas of drilling activities. Global economies are also indirectly spreading the reach of rising terrorism. Either through flow of illegal money for spreading operations to other countries or leveraging the social media to identify targets, are all ways through which the sustainability of peace in a country or across the globe is at risk (Frankel).

Ethical Issues in Economic Globalization:

With globalization came the interaction of multiple cultures and ethnic groups. Though at the hindsight it might seem all beneficial to learn from each other, some of the political issues make it more complicated. A stronger country trying to dominate the weaker one either by exploiting the cheap labor available or the lack of development to use the abundant natural resources thus, using it for its economic growth. The early years of 1900 saw lot of migration of labors working for the multiple European colonies. Present times have also seen dumping of large amounts of garbage in countries where there is high poverty or less governance to monitor such issues. Their locals are being exploited by multinationals either to setup coal mines, refineries, plantations or medical experimentation. All these being fuelled by the growing nature of the economy that is getting globalized and it’s the power of capital that decided how soon the country can advance with the expansion of its industries across the globe. Another point is on the technology advancements where lots of low level jobs are getting automated and this is impacting the people who are part of the unskilled labor community. Now ethically this needs to be looked up as we as humans like science and technology and with visible economy gains we tend to come up with better ways of doing things but does it ethically call for making these set of people jobless is a question to ponder (Rodrik, D. , 2011).

Work place bias can also been seen as an ethical issue due to globalizing economy. With migrants moving to countries with better job prospects, we have seen bias against their culture, gender and ethnicity. Whether it the issues with being an African descent or the Asian vs American and Women vs Men supremacy, all have seen specific instances where ethics are compromised at the name of globalization. Even religious matters have been dragged into this economic pursuit. Banning burqa’s or restricting immigrants from Asia- especially China &India are all instances where ethical aspects of corporations have been in scrutiny. The balance of power is moving towards the east and natural & energy resources are going to be keys for countries that want to dominate the globe. The rising unrest in Middle East, China’s patrolling in the South China Sea and waters of Indian Ocean, USA’s special focus on terrorism are some of the examples of how geo-political powers are shifting and in the quest of promoting economic co-operation and globalization, the moral and business ethics are being tweaked to suit the political motives.

Relevance for Business – Threats & Opportunities:

Threats:

The major threat is to the weaker nations. The prominence of multi nationals is killing the domestic market in some countries and this is not only impacting jobs and livelihood of the people but also their sentiments. Some instances of local collaboration have given rise to employee unrest, bad working conditions, below standard pay and lack of amenities at the cost of leveraging cheap labor. This threat is further more for the environment and natural resources as rising costs of food and water will impact the livelihood badly in the poorer sections of society. With increasing consumer spending inflation is also going to go high and with population exploding in the South East Asia region, lack of medical amenities is going to hit the economy of these developing nations.  Intense competition is making products redundant very early and with this many businesses shut shop early leading to loss of jobs and pressure to perform. Across globe operations have made working hours longer and in turn impacting the health of the employees. The surge in data generation is slowly making people’s lives less personal and thus exposure to risk and misuse from any part of the world (Ezcurra, R., & Rodriguez-Pose, A. , 2013).

Opportunities:

Opportunities are more in terms of reach and market share. It doesn’t take decades now to go global and expand organically. What is popular in one part of the world is instantly recognized by the other part and with a click of a button products and services become accessible. A major advantage is that technology isable to reach far off places and help people in need by making education, agriculture, medicine and goods now reachable. With economy globalizing, skills are getting diversified and lot of cross culture interaction is giving rise to innovation. Flow of money is bringing in capital and employment in developing countries in large numbers. Globalizing economy is paving way to more commerce based relations and less of physical power. Knowledge sharing has never been so easy and reachable as it is now. Space explorations are the next area to conquer and already leading countries are collaborating to explore this black space and identify a second planet to share the burden on earth due to its depleting resources. Religious tolerance is gaining as people understand each other’s culture and trying to imbibe what is best for the community as a whole. In times of disaster and war it is easy to provide relief and assistance as countries are now globally unified and communication mediums are getting standardized. It also good for the markets due to intense competition which leads to benefits to the end consumer as quality is high and prices are competitive.

Ethical and Sustainable Response:

We must understand that sustainability is relative and ethical is subjective. If a business is helping the people by providing employment for the long run it is sustainable for the employees but through this if it is impacting the environment by polluting it then the question is sustainability relative to what – the people or the environment. A logical and obvious answer to this would be that it should benefit both but businesses are run to make profits and not for emotions. Imagine how many of us can forgo laptops and phones just because they contribute to the e-waste. The best way to look at this is to grow and in the meantime figure out a way to do it better so that even the environment is also benefited.

The second point of ethic being subjective is that even though we understand that men can endure more physical work than women, does it qualify as a reason to reject women employees in heavy machinery area – again a situation of ethical dilemma where the economy needs more people to be hired but these people are preferable men which again raises the issue of women employment. And ethics can get further complicated when multiple cultures interact as in the case of global economy. Well it is acceptable to hug a female counterpart in one part of the world, but in the other part it might be seen as disrespect for the women. Having policies that monitor and educate employees on these issues can be solution to handle this. Developing sensitivity towards other cultures and beliefs can make it easier to work with diverse people and leverage each other’s skills and intellect (Ehrgott, M., Reimann, F., Kaufmann, L., & Carter, C. R. , 2011).

Conclusion:

            Economic globalization can be measured on ethics and sustainability across multiple parameters like GDP, Environment, Income Distribution, and Macroeconomic Interdependence etc.., GDP of nations that are developing will grow year on year but so will their levels of environmental dumping. Income distribution in countries like South African and India is very wide depending mostly on the political ruling and the type of policies adopted by them. In a country like China which is more communist in nature the wealth distribution is mostly under the government control, which keeps tighter control of the money flow among its citizens. All these countries are ethical in their own backyards but in a global scenario this changes the dynamics of doing business in one country over other. The sustainability of business is on aligning the needs of one country with the other which calls for alteration in policies and the need to strategize politically than ethically. Eventually both ethics and sustainability currently are in the political agendas of major countries and thus economic globalization will be a medium to share these ways of ensuring ethical sustainability of the people, environment, businesses and the globe.

Bibliography

Ehrgott, M., Reimann, F., Kaufmann, L., & Carter, C. R. (2011). Social sustainability in selecting emerging economy suppliers. Journal of Business Ethics, 98(1), 99-119.

Ezcurra, R., & Rodriguez-Pose, A. (2013). DP9557 Does economic globalization affect regional inequality? A cross-country analysis.

Frankel, J. (n.d.). Globalization of the Economy.

Lambin, E. F., & Meyfroidt, P. (2011). Global land use change, economic globalization, and the looming land scarcity. Proceedings of the National Academy of Sciences, 108(9), 3465-3472.

Rodrik, D. (2011). The globalization paradox: democracy and the future of the world economy. New York.

Shangquan, G. (n.d.). Economic Globalization: Trends, Risks and Risk Prevention.