Part 5 – Global issues and international business

Synthesis
Globalization has seen international businesses operating in a variety of different locations, serving many differing markets. As previous chapters have shown, managing in different national environments and adapting to their cultures and ways of doing things are hallmarks of the successful international manager. However, globalization has also given rise to global issues and phenomena, which are now rising up the agenda. This part looked at the range of global challenges and the implications for MNEs’ strategies and operations. Chapter 13 focused on ecological challenges. We found that, although industrialization had brought huge benefits in both economic prosperity and human well-being, environmental degradation and pollution continue to take their toll, threatening future prosperity and health. Governments and businesses can act to address the problems, especially in reducing the greenhouse gas emissions which cause climate change. Although most pay lip-service to goals of sustainable development, many organizations have been reluctant to embrace them in practice, fearing that economic costs will reduce competitiveness. This thinking is now shifting towards a view that short-term costs can lead to long-term benefits, for both businesses and societies.

This theme of the business in society was the subject of the next chapter, Chapter 14, on CSR, where we uncovered a variety of approaches to business-society relations. The view that the company’s role is exclusively economic is giving way to a broader view of the firm in society, although we found that among companies which now recognize social and stakeholder interactions, approaches are highly varied. Some see CSR as an added-on activity, involving charitable giving and activities, while others take a more fundamental view of CSR, involving a company’s whole culture and strategy. As global issues such as climate change impact on business activity everywhere, the likelihood is that companies will increasingly address global issues, whether out of ethical motives or business considerations (or both).

Rising to the challenges of global issues was the subject of Chapter 15, on global governance. The challenges highlighted included peace and security, human well-being and climate change. The challenges both envelop and transcend individual countries: single governments and single firms can have little impact on their own, but co-operation leading to the setting or rules and norms is taking place is a wide variety of settings. National governments are working with UN agencies, bringing in NGOs and corporate players. Numerous dimensions of the international business environment are affected, from accounting to telecommunications. This collaborative approach is also being directed towards finding solutions to the wider societal issues, including poverty and climate change. Evolving regulatory frameworks are now resonating with CSR in individual companies.

Reflection and discussion

1. What types of measures to improve environmental protection and respond to the threat of climate change are highlighted in these chapters?


2. Give examples of companies’ CSR strategies resting on the ‘business case’ for CSR. How successful would consider their approaches?


3. In what ways are global governance mechanisms impacting on international business? Give examples from the chapters. Looking at the list, which are beneficial, in your view, and which are detrimental to international business?

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