Questions
11.1 What are the major challenges GE faces in adopting a green strategy while keeping all of its
stakeholders happy?
11.2 From the standpoint of environmental impact, do you think it is more important for GE to
reduce its carbon footprint or to develop products that fit their Ecomagination strategy
of being energy efficient?
TEACHING TIPS: Have students visit the corporate Web site of GE (www.ge.com). The
site contains additional information on the firm’s ecomagination program.
LOOKING TO THE FUTURE
Dealing with Ethical Dilemmas in the Global Economy
The more companies expand abroad, the greater the likelihood they will have hard decisions to
make on how they should operate in a socially responsible manner. Most large MNEs choose to
make a difference in the countries where they operate. Social media will certainly reinforce this
trend as it forces socially responsible companies to be transparent.
CLOSING CASE: Anglo American PLC in South Africa: What Do You Do When Costs
Reach Epidemic Proportions?
Anglo American PLC is a mining conglomerate that operates in 45 countries. Founded in 1917
as the Anglo American Corp. of South Africa and now headquartered in London, Anglo
American is the largest producer of gold in the world. With a South African workforce of
more than 105,000 permanent employees, the firm is one of the largest in the region.
Heavily affected by the HIV/AIDS epidemic, Anglo American was one of the first
companies to establish a proactive, comprehensive strategy to combat the raging effects
of the disease on its workforce and production systems. Along with many other MNEs,
Anglo American also joined the Global Business Council on HIV/AIDS, an organization
that focuses on (a) alleviating the effects of AIDS throughout the world and (b) protecting
the rights of infected workers. In response to the failure of its AIDS prevention policy,
the company announced in 2002 that it would be providing free antiretroviral therapy to
HIV-infected employees at its South African operation. Previously the company had
developed AIDS prevention education and awareness training to employees because the
disease was so widespread among its workforce and was having financial consequence
for the company. Anglo American now spends an estimated $4,000 per year per employee
on the drug treatments, and estimates that it will cost the company $1 billion or more
over 10 years. There are many challenges facing the company such as getting the drug
manufacturer to provide lower costs, employee compliance with the program, and
criticism from various constituencies that the company isn’t doing enough to help solve
the problem. Given these problems, some have suggested that the company would be
better off stopping the program rather than pouring more resources into it.
Questions
5-3. Because such a large percentage of its workforce consists of migrant workers who are more
likely to acquire and spread HIV/AIDS, should Anglo adopt the policy of not hiring
migrant workers? Should the South African government close the doors to migrant
workers?
Migrant workers pose a special problem, not only in terms of infection rates, but also because of
the widespread prevalence of the disease. This situation poses a moral dilemma for
5-4. What role do pharmaceutical companies play in responding to the HIV/AIDS epidemic in
South Africa? Given that HIV/AIDS drugs can be exported from India at a lower cost
than from the pharmaceutical companies themselves, should Anglo just import the drugs
to be used for their employees?
ADDITIONAL EXERCISES: Global and Societal Challenges
Exercise 5.1. Ask students if they believe that it is better for a country to encourage (a)
international trade activities or (b) inward foreign direct investment. Then have them
discuss the impact of foreign direct investment upon the international trade activities of the
triad nations (West Europe, Japan, Canada, and the United States) as compared to the impact
upon the BRICs (Brazil, Russia, India, and China). Finally, repeat the first question
regarding their general beliefs. If positions have changed, explore why. (LO: 4, Learning
Outcome: To discuss some key issues in social activities and consequences of globalized
business, AACSB: Analytical Skills.)
Exercise 5.2. Choose two to five countries that are economically diverse. Then lead the class in a
comparative discussion of the impact of foreign direct investment upon those countries.
What MNEs are headquartered in or have subsidiaries based in those countries? Conclude
by asking the students to discuss the societal effects of foreign direct investment upon those
and possibly other countries. (LO: 4, Learning Outcome: To discuss some key issues in
social activities and consequences of globalized business, AACSB: Dynamics of the Global
Economy.)
Exercise 5.3. During the late 1980s and throughout the 1990s, China was routinely cited by various
governments and NGOs for human rights violations that included torture, beatings,
imprisonment, and even the executions of political dissidents. At the same time, inflows of
foreign direct investment into China from firms headquartered in democratic societies in
West Europe, North America, and Japan were increasing at record rates. Ask the students to
debate this phenomenon from an ethical perspective. Do they believe that China is a special
case, and if so, why? (LO: 2, Learning Outcome: To demonstrate the cultural and legal
foundations of ethical behavior, AACSB: Ethical Understanding and Reasoning Ability.)
Exercise 5.4. Multinational enterprises are increasingly subject to demands from both national and
local governments to implement comprehensive social programs, engage in improved labor
relations, and meet increasingly rigorous environmental regulations. Ask the students to
explore the strategic options they feel are available to a firm such as Newmont Mining in
Indonesia that has extensive property and capital assets at risk. Suggest they consider both
proactive and reactive alternatives. (LO: 3, Learning Outcome: To discuss the importance
of social responsibility when operating internationally, especially in the area of
sustainability, AACSB: Dynamics of the Global Environment.)