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Chapter 15 –- Globalization (pp. 565 – 597)
The final chapter of the text starts with a case study (pp. 565 – 570). This last case study is about a
fictionalized company accused of having its goods produced in sweatshops in various Third World
countries. Needless to say, we have heard of that before with large and well-known companies and
brands. The ethical dilemma is: What should be done about this?
Article: “The Market at the Bottom of the Pyramid” by C.K.Prahalad (pp. 570 – 584)
In this article, Prahalad talks about the emerging markets in the Third World. As people gain access to
currency, even if it is only a small bit of currency, they desire products that will make their lives
Article: “The Great Non-Debate over International Sweatshops” by Ian Maitland (pp. 584 – 597)
Maitland’s article about sweatshops in Third World countries (however sweatshops can occur
anywhere in the world that workers are being exploited, including the exploitation of immigrant
groups in the U.S.) points out that no one believes that sweatshops should exist.
Aside from the physical conditions within sweatshops, Maitland cites unconscionably low wages,
immiseration (wages and working conditions that still keep workers in poverty conditions despite
their hard work), a widening economic gap between the rich and the poor throughout the world, and
the potential (or actual) collusion with repressive regimes.
However, it is hard to figure out how to get rid of sweatshops. Everyone likes economic advantage,
and if the people who manufacture our goods live out of the country, we are unlikely ever to see the
harsh conditions under which they work, and of course, as the old saying goes, “out of sight, out of
mind.”
Further, even if those with economic power get upset enough about this situation to try to change it, it
is difficult to figure out what standard to use. Some would suggest the First World standard, but of
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course, if it had to pay home country wages and benefits, no company would ever have located its
factories in the Third World.
Some suggest a “living wage” standard — but how does one know what a “living wage” is? What
about if it is still high enough that the company would pull out of a Third World country and move its
operations back to its home country? Would the workers, who are now unemployed, really favor that
over their previous conditions? Further, paying higher wages than the type of job demands in a
country in which it is situated, runs the risk of “brain drain” — wherein skilled workers in that country
will take assembly-line jobs precisely to make more money than they would in their skilled or
professional occupations.
The last standard proposed is what is called the classical liberal standard. Although the word “liberal”
is in that title, it is perhaps the most conservative of the standards, in that this standard proclaims that
a wage is ethically acceptable if it is freely chosen by informed workers. If you are out of work long
enough in a country where no social welfare programs exist, what low-wage would you be willing to
work for?
Maitland eventually concludes that it is ethically permissible to pay market wage rates in developing
countries as long as those wages are freely accepted by informed workers. His great concern is that
anything more than this could discourage needed foreign investment in these third world countries.
Discussion Questions
1) You look around your house and notice many items “made in China.” You have heard many
stories about the low wage rate and seemingly harsh working conditions there. How long do
you spend wondering about the moral rectitude of your purchasing decisions? Do you alter
your purchasing criteria? Why or why not?
2) You go to a third world country and notice many of the same brands you know from home.
Can you think of any possible explanations for this type of market penetration, and if so, what
do you suppose is happening?
3) You decide to donate money to a charity that operates in the poorest countries in the world. If
you were asked to suggest five uses for such donations, what would you suggest?
Resources for further study — Film, Literature, and the Web:
Sweatshop Watch — http://www.sweatshopwatch.org/
The World Bank — http://www.worldbank.org/
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Test Item File
Quizzes on the introduction are included in this test bank for the reason that the introduction
elucidates exactly what its title implies – an “Introduction to Ethical Reasoning.” If students do not
grasp this concept, i.e., that ethical theories exist and that one can reason through ethical problems in
business by considering and applying ethical theories, they will not succeed in a business ethics
course.
Multiple Choice Quiz for the Overall Introduction.
1) Which of the following is not an actual ethical theory?
A) consequentialism
B) deontology
C) utilitarianism
D) principalism
Correct answer: D
2) Which of the following is a criticism of utilitarianism?
A) It does not account for justice.
B) It is based on utility.
C) It is deontological.
D) It deals with social contracts.
Correct answer: A
3) “Duty” is a key component of the philosophy of:
A) John Stuart Mill
B) Immanuel Kant
C) Aristotle
D) John Locke
Correct answer: B
4) According to social contract theory, society is established by _________.
A) the government
B) force
C) agreement
D) virtue
Correct answer: C
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5) Which pair of philosophers are social contract theorists?
A) John Stuart Mill and John Locke
B) John Locke and John Rawls
C) John Rawls and James Johns
D) John Stuart Mill and John Rawls
Correct answer: B
6) Consequentialism is a type of philosophical theory that __________.
A) is concerned with sequences
B) is concerned with duty
C) is concerned with the results of actions
D) is considered to be out of date
Correct answer: C
7) The two types of Utilitarianism are __________.
A) consequence and rule
B) consequence and end
C) end and good
D) act and rule
Correct answer: D
8) Immanuel Kant can be classified as a(n) __________.
A) uilitarian
B) social contract theorist
C) aristotelian
D) deontologist
Correct answer: D
9) John Rawls is most concerned with __________.
A) Justice
B) Deontology
C) Virtue
D) Socioeconomics
Correct answer: A
10) Virtue ethics places an emphasis on a person’s __________.
A) character
B) position in society
C) results
D) will
Correct answer: A
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True/False Quiz for the Overall Introduction.
Indicate whether each of the following statements is True or False.
1) Industry brings job and pollution.
Correct answer: True
2) Deontology focuses on rights.
Correct answer: False
3) Utilitarianism need not be selfish.
Correct answer: True
4) John Stuart Mill is a utilitarian.
Correct answer: True
5) Jeremy Bentham is a utilitarian.
Correct answer: True
6) Immanuel Kant is a social contract theorist.
Correct answer: False
7) John Locke is a social contract theorist.
Correct answer: True
8) Virtue theory ethics emphasizes character.
Correct answer: True
9) Aristotle’s philosophical system includes moral virtue.
Correct answer: True
10) Rawls begins his theory with a natural-rights position.
Correct answer: False
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Multiple Choice Quiz for Chapter 1.
1) A corporation is __________.
A) a real person
B) a group of people
C) stockholders
D) an artificial person
Correct answer: D
2) A business need only be concerned about __________.
A) money
B) people
C) the environment
D) there is no settled answer
Correct answer: D
3) Milton Friedman is __________.
A) a Nobel Prize winning environmentalist
B) a Nobel Prize winning economist
C) a Professor of Business Administration
D) a company that makes industrial products
Correct answer: B
4) R. Edward Freeman is __________.
A) a Nobel Prize winning environmentalist
B) a Nobel Prize winning economist
C) a Professor of Business Administration
D) a company that makes industrial products
Correct answer: C
5) H.B. Fuller is _________.
A) a Nobel Prize winning environmentalist
B) a Nobel Prize winning economist
C) a Professor of Business Administration
D) a company that makes industrial products
Correct answer: D
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6) Milton Friedman’s claim that businesses can have no explicit social responsibilities is best
explained as an example of _________.
A) deontological reasoning
B) virtue theory ethics
C) consequentialist theory
D) social contracting
Correct answer: C
7) The Stakeholder Theory holds that:
A) The rights of all who may be affected need to be considered in making business
decisions.
B) Anyone with stake in a corporation’s behavior should be rewarded with a
corresponding proportion of ownership.
C) Capitalism has long outlived its usefulness.
D) Virtue theory ethics alone is suitable for the 21st Century.
Correct answer: A
8) Resistol is __________.
A) a toxic substance
B) the theory that we should resist change
C) a company with business in Central America
D) an organization concerned with corporate ethics
Correct answer: A
9) When did the modern business corporation emerge as one of the most important innovations
in human history?
A) in the 21st Century
B) in the 20th Century
C) in the 19th Century
D) in the 18th Century
Correct answer: B
10) H. B. Fuller is best described as a company __________.
A) that believed it was an ethical company
B) that was only concerned with making money
C) that made shoes in Central America
D) headquartered in Europe
Correct answer: A
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True/False Quiz for Chapter 1:
Indicate whether each of the following statements is True or False.
1) H.B. Fuller is a Honduran company.
Correct answer: False
2) Resistol is marketed as an inhalant.
Correct answer: False
3) Milton Friedman is a free market economist.
Correct answer: True
4) Milton Friedman believed the doctrine of “social responsibility” involved the acceptance of a
socialist view.
Correct answer: True
5) Stakeholders are the same as Stockholders.
Correct answer: False
6) R. Edward Freeman is a proponent of “managing for
stakeholders.”
Correct answer: True
7) Modern business is no more complex than in the past.
Correct answer: False
8) “Privity of contract” remains the only recognized relationship that an individual can have with a
business.
Correct answer: False
9) The “Separation Fallacy” holds that those who separate business decisions from ethics are
wrong to do so.
Correct answer: True
10) Stakeholder theory holds that business can be understood as a set of relationships among
groups that have a stake in the activities that make up the business.
Correct answer: True
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Multiple Choice Quiz for Chapter 2:
1) Italian tax authorities are clearly __________.
A) unethical
B) not concerned with collecting the proper amount of taxes
C) representatives of the European Union
D) working within a different cultural system than that in the U.S.
Correct answer: D
2) Kant believed that:
A) There is one categorical imperative.
B) There are two categorical imperatives.
C) There are three categorical imperatives.
E) There are a limitless number of categorical imperatives.
Correct answer: A
3) That contracts are not always followed to the letter seems to violate Kantian principles
because:
A) Kant had extensive personal services contracts himself.
B) Kant believes that people should act only in a way that they are willing to have
followed all the time.
C) Kant was a literalist.
D) Kant held that all human agreements are sacred.
Correct answer: B
4) Which of the following is a primary principle of Kantian Ethics?
A) Virtue must motivate all our actions.
B) We must pay our taxes to the government.
C) Our moral motivation is to be duty.
D) Happiness must be our moral motivation.
Correct answer: C
5) Aristotle __________.
A) was very familiar with modern business ethics
B) formulated a comprehensive system of ethics
C) understood ancient Greek business and the necessity of profit
D) encouraged Italian tax policy
Correct answer: B
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6) Aristotle __________.
A) understood everything except tax policy
B) is considered to have a virtue-driven ethical theory
C) believed that everyone should engage in private business
D) favored utility as the primary ethical principle
Correct answer: B
7) Utilitarian ethics as applied to business __________.
A) requires business people to be an agent of the creation of happiness in society
B) calls upon business people to be useful members of society
C) demands business people make decisions solely on how much profit they will yield
D) states that business must always act inconsideration of justice and fairness
Correct answer: A
8) John Dewey is considered to be in which “school” of Philosophy?
A) Hedonism
B) Virtuism
C) Utilitarianism
D) Pragmatism
Correct answer: D
4) 9) Dewey’s theory of decision making is infinitely adaptable because it is __________.
A) rehearsed
B) factual
C) contextual
D) abstract
Correct answer: C
5) 10) Which of the following is not a dimension of virtue ethics according to Robert C. Solomon?
A) Reliability
B) Integrity
C) Community
D) Judgment
Correct answer: A