Is MNCs Promotion of Globalization Good or Bad?

Since 80`s, the world economy has become integrated and connected through the process of globalization. However there has been debates on whether globalization has brought about good or harm in the modern society. MNCs have played a great role in promoting globalization- a shift toward a more integrated and interdependent world economy (John, 2006). Multinational Corporations do not function in a vacuum but within societies and societies consist of individuals. Inherent, in human nature are a set of principles that guide the thinking man. Collectively, these principals are often referred to as morals. Modern business approaches look beyond the need to manage time efficiently and make profits. Businesses are increasingly looking into ways of improving the relationship with customers through adherence to certain codes of conduct considered as desirable hence the application of moral theories in business (Shaw & Barry, 2015). This can be argued from the perspective of various ethical theories such as utilitarianism, virtue ethics, and deontological.
The utilitarian approach was develop by Jeremy Betham. The theory assess an action in terms of it consequences. That is, the benefit and cost to all stake holders at an individual level. It aims at achieving the greatest good for the greatest number. Jeremy argued that the right action are those that produce the most pleasure for most people and wrong actions consequently are those that do not. He used the phrase “Greatest good for the greatest number” (Shaw & Barry, 2015). If an action satisfies the greatest number of people, then it is justifiable. The flaws to this kind of approach are quite obvious-that there is no protection for the minorities. Globalization provides operational economies of scale, technological and productivity improvements through cross border specialization and the utilization of global factors of production and technology. Further, it makes countries, especially the developing ones to benefit from increased Foreign Direct Investment (FDI). Utilitarianism however undermines actions leading to these positive results and the negatives of globalization such as increased competition to the domestic investors due to establishment of MNCs to the host countries. According to this approach, MNCs promotion of globalization can be considered a good thing by considering the benefits to the majority.
According to Deontological point of view, molarity of an action should be based on whether that action on itself is right or wrong given a set of rules rather than the consequences of the action. This framework depends on predetermined rules and policies for the proper functioning of a system in the environment. The flaws to this approach is that it ignores the consequences of the decision taken. These rules may be in conflict with personal desires (Shaw, 2016). Multinational corporations are governed by a set of rules, codes and conducts. Some nations have used other types of multilateral treaties to promote codes of conduct for multinational firms. Such guidelines comprise of a set of recommendations requiring employment of citizens of the host country, information disclosure, combating bribery, consumer interest, promoting science and technology as well us ensuring human rights are upheld. MNCs` Adherence to these guidelines means that the citizens will benefit. According to deontological approach, globalization is a good thing.
Primarily, virtue ethics may be identified as one that emphasizes the virtues or moral character, in contrast to deontology approach that emphasizes on duties and rules or the utilitarian approach that emphasizes on consequences of actions. Virtue ethics is a form of non-consequential theory (Shaw & Barry, 2015). The theory proposes that a person should always strive for perfection by continually engaging in actions considered as virtuous (Hooft, 2015). From a business perspective, this implies that an MNC should look from within and identify the specific values that can motivate its actions towards ethical excellence. The main motive of MNCs is profit maximization which is achieved through behaving like a monopoly. By exploiting economies of scale, MNCs set competitive prices which kick off local firms from the market. This results to host country’s economy being dominated by multinational corporations which can threaten to exit anytime resulting to collapse of the economy. Therefore MNCs do not consider the social implications of their actions such as pollution, moral erosion and unemployment since their focus is not on morality. Considering this approach, MNCs promotion of globalization is a bad thing.
From the discussion, there is the realization that the strongest moral theories for application in business are non-consequential based theories. In this case, virtue ethics and deontological are the strongest. In business, one cannot consider consequences alone when discussing moral issues. Virtue ethics is subjective and promotes self-reflection whereas deontological approach ensures that MNCs adhere to the predetermined standards for the common good. Therefore globalization can viewed as a good thing based on Utilitarian and deontological approach. However MNCs should ensure that they consider ethical issues surrounding their operations rather than just focusing on profit maximizing.

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Carolinemakenamutwiri answered the question on February 16, 2019 at 12:32