Globalisation is ‘the process of transformation of regional phenomena into global…thorough communications’ (8). Due to globalisation organisations trade and communicate on an international level through integration. Causing the ‘Flattering of the Globe’ (9) as said by T. L Friedman mentioning how the world is becoming a smaller place, people argue globalisation has affected people worldwide for the best and for the worst.
Multi-national Corporations (MNC’s) have been affected positively because they can operate in Less Economically Developed Country (LEDC) allowing them to cut costs resulting in a more prosperous profits. A MNC is an organisation that ‘operates internationally in more than one country’. The advantage of operating globally is firstly that the country accommodating the MNC benefits through job opportunities which will assist the economy and this can show a reduction of the gap between the MEDCs (More Economically Developed Country) and LEDCs. However MNCs can exploit the international workforce in LEDCs, because regulations in LEDCs differ from MEDCs so MNCs such as Nike use this to their advantage. Nike is a MNC that has been seen as operating in an unethical manner worldwide. So the ethical argument begins here towards the ethical considerations that MNCs face when operating in LEDCs around the world and how globalisation has actually affected Nikes business ethics. This essay will look at different aspects of ethics towards Nike and the reaction to globalisation. And whether Nike have helped or hindered LEDCs economies.
The meaning of ethics is based around the difference of right and wrong as described by Aristotle in his ‘doctrine of mean’. There is no universal definition of ethics as Peter Singer proves by asking a simple question of ‘why should I act morally?’ (5). It is impossible to have a fixed answer to the question because it is dependant on what an individual’s perception of ethics is.
Aristotelian ethics is termed by ‘self realization’ (10) and explains how a ‘person acts in accordance to their nature and realizes his full potential’ and also how ‘nature does nothing in vain’. So a person will be bad because of the un-natural upbringing. Naturally everyone is good, so for someone to be unethical it is the un-natural means that cause this. So relating to Nike and the individuals making the decisions, have they had an un-natural upbringing that has made them act unethically globally? Morally have they not developed or matured enough? As explained by Kohlberg and his analysis of the levels of moral development (1) (appendix A)
Nike in LEDCs is in a situation where they are not forced to be ethical on how they should treat their workforce. With the workforce unaware of their rights and how they should be treated puts Nike in a predicament and questions Nikes business ethics due to globalisation.
Globalisation can be seen as affecting Nikes ethics in a positive way for both company and employees in the LEDCs. Nike moving into a LEDC leads to employment opportunities, e.g. The Nike plant in China employees 4000 people meaning an extra 4000 employed in that country. Deontological ethics which is the ‘Science of duty’ (7) meaning that some actions are obligatory regardless of the consequences would see this as ethical behaviour displayed by Nike globally. Nike are accomplishing their duty by contributing to their Corporate Social Responsibility (CSR) by providing jobs. Kantianism also follows deontological ethics and believes that consequences are irrelevant to how ethical someone is (1).Kantianism(1)argues the outcomes are irrelevant because someone can have bad intentions but can result in good consequences, this does not make the situation ethical due to unethical intentions. Regardless it has to be considered the argument can work both ways, intentions could be good but the outcomes could be bad which would be acceptable to Deontology/Kantianism. Nike is following their ethical duty according to Deontological ethics by providing employment in those LEDCs where employment is scarce and the economy is deprived.
Another view to show that Nike is behaving ethically is if we look at it from a Hedonistic view point. Hedonism means the ‘minimising of pain and maximizing of pleasure’ (11) and believes that the majority people pleased is the most ethical. Relating it to Nike, exploiting and making 4000 employees unhappy in the China plant is this better than making millions of customers unhappy because they can’t deliver or deliver the product at a low price. So according to Hedonism ethics Nike is operating ethically because it is opting to please the majority and doing what it sees as the ‘greater good’ (1). So in the point made above globalisation has affected Nike’s business ethics in a positive way . To add to Hedonism there is Cyrenaic Hedonism(7)view point which looks at instant gratification rather than deferred gratification. (12) (Appendix B) This viewpoint looks at the short term affects or pleasing people only with the thinking of ‘here and know’ and that tomorrow is another day and we should worry about that when it comes. ‘A man hath no better thing under the sun, than to eat, and to drink, and to be merry…’
You could say that Nike looks at its company way of life using this view point because of the way it is acting. It doesn’t necessarily means that they are behaving unethically; it just means that they are only living for today which a lot of people do in general so you cannot hold it against a company for its way of life. However Nike is currently till this day polluting the environment, it may not of had a great impact yet but more than likely it will have a detrimental effect on them same employees and environment causing further problems with global warming in the long-term (13). There isn’t a problem with Nike according to Cyrenaic Hedonism, but it is unethical behaviour because of the selfishness because they are not considering the future when it comes to it affecting other people because of their current actions. This leads to the Consequentialist view point of how Nike is behaving unethically because it is not thinking of the consequences of their actions.
There is the point of how they are providing jobs for LEDCs but this does not mean they are helping LEDC. Nike is simply increasing the gap between the LEDCs and the MEDC in the long-term. So all the LEDCs are consumed in an evil cycle of global capitalism where the rich stay rich and the poor remain poor(3). Bringing us back to the argument of ‘good’ and ‘bad’ and we can link this to Consequentialist way of thought, where the most ethical path is not following intentions but what the consequences of their actions are. So if we were to see Nikes ethics from a Consequentialist point of view it would seem that they are not following business ethics due to globalisation because of the consequences of their actions being negative in the sense that the people in the LEDCs are working slave labour with no option but to take Nikes employment ‘offer’ up(2). With the wages Nike provides to the workforce it is something that maintains them but not remove them from the poverty cycle. If they really wanted to follow business ethics globally they would pay wages that will actually benefit employees and that will make a difference to their economy. This could be associated with Utilitarianism point of view which is a type of Consequentialist theory. And it mainly focuses on once again the utility of the action and motives (1).
As Bentham quoted as utilitarianism is ‘the greatest good for the greatest number’, this relates to the perception of Hedonistic views. So Utilitarianism and Hedonism do complement each other well hence creating Hedonistic Utilitarianism(14). The two individuals surrounding Hedonistic Utilitarianism are Bentham and Mills. Bentham’s view around Nikes business ethics is ‘the greatest happiness for the greatest number’, as previously mentioned, it is better to please millions of Nike customers at the cost of a few thousand employees be given pain. Mill however would argue it is the quality of the pleasure and pain that is crucial for Nike to be following business ethics globally. Mill would rather see millions of Nike customers unsatisfied with the Nike products than to see thousands of Nike employees going through slave labour. So Nike needs to not only consider the quantity of their business ethics but additionally the quality of their ethics. As Mill would say globalisation in Nikes scenario has caused Nikes business ethics to be unethical because of the pain and frustration the Nike workforce is going through due to Nike not considering the consequences. However the argument could once again be perceived from a different angle, as i have stated previously about Hedonist views and how placing 4000 employees in suffering may be justifiable to some because of the pleasure the millions of customers may get when they have the ability to purchase the Nike product or purchase at a low price.
In this moment in time Nike is attempting to display their business ethics globally due to a plummet in sales and profit. This was due to the bad media coverage Nike received about their poor wages, poor working conditions, Sweatshops, child labour…the list goes on. Conveniently their interest in CSR only increased when profits decreased(15+16). This according to Virtue Ethics school of thought is seen as unethical behaviour. Virtue ethics does not look at motives or consequences like Deontology and Consequentialist but rather it looks at the moral character of a person or in this situation the moral character of Nike. Virtue Ethics would label Nike for its attempt of having a new approach to CSR as ultimately unethical. Even if Nike is benefiting their employees worldwide, because of the sudden pull towards CSR to someone who thinks from a Virtue Ethics perspective, it doesn’t matter, because they have still got a bad moral character and their approach towards CSR and ethics are for the wrong reasons and are only there for their overall personal gains which is profits. However Consequentialist and Deontological views would not agree with the Virtue Ethics approach to ethical behaviour, Consequentialist main thought is the outcomes and deontology is the ‘science of duty’.
In this essay i have mentioned different view points and how they would perceive MNCs such as Nike and judge it according to their beliefs as being ethical or unethical globally. The main schools of thoughts being Deontology, Consequentialist and Virtue Ethics. Nikes situation could be looked at with a non-cognitive attitude, meaning that the statements made cannot be determined whether they are right or wrong universally, and the answer is dependent on personal beliefs(Appendix) ‘there is nothing either good or bad, but thinking makes it so'(17)
Once again thought needs to surround the fact that ‘one mans terrorist, is another mans savoir’. The world is discouraging with Nikes operations but at the same time those same people may be supporting Nike by purchasing their products. This shows the world is a hypocrite so you cannot judge ethical behaviour especially globally because of the level of diversity. Even though there is an understanding of natural Law, which is like unwritten rules that have been passed from generation to generation and that go without saying. Overall I think that Nike is not helping the people of LEDCs regardless of the employment provided and the only reasons for them to operate abroad is to maximise their own benefits even if it means to ruin someone’s life and to keep them LEDCs poorly developed. The points made about Nikes unethical behaviour above can be argued depending on the ethical view point but in my opinion some of the acts carried out by Nike such as slave labour are seen as universally wrong and I am unable to understand how they have managed to justify it till this day. If Nike really wants promote CSR they should attempt to eliminate poverty by intervening in the poverty cycle for these LEDCs.