Ethical Standards

As organizations become global, they need to clarify their own ethical standards. Not only will they need to understand the rules and regulations of each country, they will also have to determine what norms of conduct they will work to establish for their organizational members, and what constitutes acceptable and unacceptable behavior. Peter Eigen, chairman of Transparency International, states, “Political elites and their cronies continue to take kickbacks at every opportunity. Hand-in-glove with corrupt business people, they are trapping whole nations in poverty and hampering sustainable development. Corruption is perceived to be dangerously high in poor parts of the world, but also in many countries whose firms invest in developing nations.”72 Left unaddressed, political corruption can become embedded in organizations. Transparency International finds bribery most common in public works and construction and arms and defense corporations as compared with agriculture.73 The accounting and governance scandals of 2001 to 2002 (Enron and WorldCom), followed by an almost uninterrupted series of major ethical lapses in global financial services/banking, pharmaceutical, and government sectors (to name just three), have created public demands for transparency, accountability, regulations with teeth, and heightened expectations that firms should be expected to behave in socially responsible manners. Some companies, Hewlett-Packard, H&M, Tesco, Loblaw, and Apple, for example, have responded by requiring that they and the participants in their supply chain adhere to a set of specified ethical standards. Further, they are committed to working with their suppliers to ensure they reach these standards.

The politics of globalization and the environment have created opportunities and issues for organizations. The United States’ Obama administration was committed to the introduction of new green energy initiatives, but the election of Donald Trump has placed U.S. progress in this area in doubt.

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The desire to reduce the world’s dependence on foreign oil and coal has meant subsidy programs for new technologies and opportunities for businesses in those fields. It has also led to an explosion of energy recovery methods, such as fracking, which bring with them their own ethical issues. Some organizations are restructuring themselves to seize such opportunities. For example, Siemens has reorganized itself into three sectors— industry, energy, and health care—to focus on megatrends.

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