Running header: GLOBALIZATION
1
Globalization
Crystal Baca-Slater
University of Central Oklahoma
Author Note
This paper was prepared for The Individual, The Organization and Society, Dr. Nate Cottle
2
GLOBALIZATION
Globalization
Globalization of business includes the globalizing of politics, culture and law.
Globalization is not a new process. Globalization began when explorers, intent on colonization,
began to expand their kingdoms bringing with them new ideas, plants, food and even diseases.
We are now in a rapid stage of globalization due to technological advancements and the
transition of an industrial economy to an information economy. The most difficult challenge a
company can face is the challenge of balancing the pursuit of profit while maintaining company
business ethics. This paper considers the affects of globalization by exploring the following
topics:
1. Purpose of Business in Society
2. Globalization Redefining Corporate Social Responsibility
3. Corporate Role in Global Governance
4. Challenges of Leadership in a Global Arena
Purpose of Business in Society
According to Lawrence and Weber (2011), “Every modern company, whether small or
large, is part of a vast global business system” (p. 4). Capitalism and business have always been
about filling a need in society while earning a profit. Therefore, there is a belief that “companies
can and should contribute to the global problem solving” (Pies, Beckmann, and Hielscher, 2010,
p. 266). Globalization has expanded the role of business in society, a role that was already
considered one of the largest institutions. This expanding role has created unique implications,
both positive and negative, for businesses.
Globalization Redefining Corporate Social Responsibility
3
GLOBALIZATION
Corporate social responsibility has been shifting since it was first coined a term in the
1970’s. Prior to that, we defined the idea of corporate social responsibility as business ethics.
There are many factors which influence corporate social responsibility: “political and social
structures, the activities of NGOs and corporate cultures, and societal expectations of leaders and
historical tradition” (Trengblad and Ohlsson, 2010, p. 653). The continued globalization of the
world economy creates an expectation for firms to operate as global citizens and is complicated
by legal governance and world cultures.
Corporate Role in Global Governance
As companies expand their corporate footprint in a global economy there are many
obstacles to overcome in order to be effective while maintaining their corporate citizenship.
These obstacles include cultural differences; culture is global but not uniform. Cultural
differences can make adaption difficult especially when it comes to understanding expected
norms. Many of the countries that firms operate in may not have a formal government and a
global government and regulations are lacking. As a corporations role expands in the global
economy they “learn to act as corporate citizens in global processes of rule-setting as well as in
global rule-finding discourse, then they will contribute to strengthening global governance”
(Pies, Beckmann, Hielscher, 2010, p 267).
Challenges of Leadership in a Global Arena
In addition to the challenges of conducting business in a global economy, many business
leaders struggle with making decisions in this global context. The competing demands of
globalization can bring ambiguity to the decision making process and frustrate the leaders.
There are competing business cultures to accommodate as well as a lack of governance and
4
GLOBALIZATION
uniform business ethics. This can lead some global leaders to a crisis of moral decision making.
According to Thompson, “Globalization adds complexity to what is already a complex aspect of
human functioning at the individual, interpersonal, societal, and cross-cultural level” (2010, p.
17).
As technology continues to bring us together and increase our global economy, businesses
and business leaders will continue to both find new challenges and opportunities. The role of
business will likely continue to expand in our society as firms lead the charge of globalization.
Corporate social responsibility will become more refined as uniformity and homogeny
strengthens. Leaders will continue to face challenges in making ethical and moral decisions
while corporations continue to expand and define a global governance structure.
5
GLOBALIZATION
References
Lawrence, A. T. & Weber, J. (2011). Business and Society: stakeholders, ethics, public policy
(13th ed.). New York, NY: The McGraw-Hill Companies, Inc.
Pies, I., Beckmann, M. & Hielscher, S. Value Creation, Management Competencies, and Global
Corporate Citizenship: An Ordonomic Approach to Business Ethics in the Age of
Globalization. Journal of Business Ethics, 94(1), 265-278. doi:10.1007/s10551-0090263-1
Tengblad, S. & Ohlsson, C. (2010). The Framing of Corporate Social Responsibility and the
Globalization of National Business Systems: A Longitudinal Case Study. Journal of
Business Ethics, 93(1), 653-669. doi:10.1007/s10551-00900246-2
Thompson, L.J. (2010). The Global Moral Compass for Business Leaders. Journal of Business
Ethics, 93(1), 15-32. doi:10.1007/s10551-010-0624-9