*****Part I: Case Study: Charles Veillon, S.A. (A) [50%]
- In Zwahlen’s position as Veillon’s newly appointed executive director, what would be your priorities and concerns before hearing the report on child labor (i.e., what challenges does he face apart from the issue of possible child labor in the supply chain)?
- Was Zwahlen’s decision to terminate the suppliers a good decision? Was it morally prudent? Was it consistent with Veillon’s corporate values?
- Which parties are responsible for child labor? Does it make sense to hold companies like Veillon responsible?
- Should Veillon do anything more about the child labor issue? If so, what are its options and what do you recommend?
- In two or three paragraphs state your own theory of corporate social responsibility. Also, how does your theory inform your approach to this case about child labor?
[Background reading: “Save the Children,”ch. 6 from Out of Poverty by B. Powell]
*****Part II: Readings, Cases and Lectures [50%]
- (a) In your view, what is the purpose of the corporation in modern society (“Corporate Purpose and Responsibility”), and what does it mean to be a good global citizen? Do you agree with Genzyme’s broad views about corporate purpose or the narrow view espoused by Friedman? How would you assess Friedman’s claims that managers have a fiduciary obligation to the corporation’s owners and that it’s not prudent for corporations to stray from market forces? (b) What lessons about globalization (international economic integration) and foreign direct investment do you take away from this course? In your answer consider the behavior of MNC’s (e.g., GlaxoSmithKline, Royal Dutch Shell, Unocal, Apple) along with the experience of countries like India, China, Brazil, Bangladesh, and Nigeria. Do you conclude that globalization (and liberal market capitalism) is a force for good or are you skeptical about the long-term effects and the implications for social justice? [Be specific and refer to cases we have studied].
- (a) Is it possible to have universal moral principles for a global world or are we destined for ethical pluralism and cultural ethical relativism? Do you agree with the course’s proposal of moderate universalism based on a set of fourteen universal human rights? Refer to the reading (“Law, Morality, and Natural Rights”) and the presentations on moral theory in your answer, and illustrate with reference to one or more of the cases we have considered. [E.G., regarding Apple and its suppliers — is it reasonable for Apple to apply different ethical standards to different countries?] (b) The “Yahoo! in China” case (along with the Google and Linkedin cases) gave us an opportunity to explore the tensions that arise when a business has operations in places where domestic law appears to be at odds with certain human rights. Is there a universal right to free expression as suggested in the article “Business and Human Rights” (see also UN’s Declaration on Human Rights); if so, how can it be justified and what should have been Yahoo’s (and Google’s) response? [If you disagree with the universality of such a right, what are your specific arguments and what are the implications for doing business in countries like China?]
- (a) “Public Policy and the Manager” reveals how policies originate as responses to an imperfect functioning of the market which deviates from the social optimum. Explain the market failures that trigger government intervention and provide some examples from course cases and lectures. Under what conditions should regulators let markets self-correct? Is this simple economic model adequate for policy decisions or is economic efficiency insufficient as the sole criterion for assessing market failure? (b) Based on your reading of the cases on the pharmaceutical and biotech industries, what is your assessment of pharmaceutical patents as a solution to the public goods problem? Do these patents as currently structured enhance social welfare? Would you adjust that structure? Do you agree with the provisions of TRIPs, and this “one size fits all” approach to global intellectual property rights? Should countries like India be allowed to implement or adjust the TRIPS template to suit their own needs and ideological preferences?
- (a) The Chiquita brands case is about the politics of trade and the practice of protectionism. What role has politics played in the history of Chiquita Brands, and its predecessor United Fruit Company? Is the European Union (EU) banana regime good policy or bad? Is it development aid or protectionism? What concern (if any) should the EU ministers have for the fate of US banana companies like Chiquita? Finally, how do you assess Chiquita’s management of this volatile political situation – how could they have better managed things to hedge the risk of higher tariffs and more restrictive quotas? (b) Is “political neutrality” a plausible guiding principle for major business corporations such as Royal Dutch Shell (see “RDS in Nigeria” case)? Is such an apolitical stance realistic in the era of globalization, and does it enable companies to avoid allegations of ethical imperialism? Is it a suitable reaction to the more aggressive political activism of United Fruit Company (UFC) in the 1950’s (“The Octopus and the Generals”) or ITT in the 1970’s (“Note on Political Involvement and Corporate Activism”)? Is there a way for MNC’s to intervene in local affairs in a way that is morally prudent?
- 5. (a) The Firestone case details the relationship between Firestone and the warlord Charles Taylor. Did Firestone have any other options but to make a deal with Taylor? Do you agree with Firestone’s decision to return in 1992 and make the payments to Taylor and the NFPL? What about doing business there after Taylor was elected president? Finally, we have introduced the “condition-of-business principle” as a basis for making such decisions. Critically assess that principle and discuss how it applies to Firestone. (b) On a basic level, “Going Rogue: Choson Exchange in North Korea” introduces the realities of doing business at the utmost extremes of the world economy. What is it that makes North Korea a “rogue state” and is that a meaningful term? Is Choson Exchange a good idea – what does it hope to achieve? Should companies like Choson engage at all with rogue states, and should it enter into its for-profit space? This case also engages with an influential tradition of political economy according to which trade and commerce “gradually introduce order and good government, and with them, the liberty and security of individuals of the country, who had before lived almost in a continual state of war with the neighbors.” Do you agree with this idea and do you think that trade and foreign direct investment in North Korean will promote peace?
- (a) One of the main themes of the course has been the problem of “institutional voids” (at the macro level) in emerging and frontier markets. Cases such as ArcelorMittal, Firestone, and Blood Bananas have dealt with this topic. Should multinationals avoid doing business in such countries? If not, how can they overcome or coexist with these institutional voids? What problems arise when businesses in the world economy globally influence, shape, and at times perform tasks habitually identified with governments? Specifically, given the low-state capacity in Liberia, ArcelorMittal helped organize a private sector response to the Ebola crisis. What lessons can be drawn from this experience? (b) Another major theme of this course has been the historical contingency and non-linear history of global capitalism. Drawing from the Singer Sewing case and the class presentation on the history of globalization, discuss what can be learned from “Globalization 1.0.” What were some of the complex challenges faced by pioneer 19th century multinational firms like Singer? Why was this company successful in capturing so much of the world market at the time? What could today’s multinationals learn from its experience? Finally, does the current period of globalization have an “Achilles Heel,” and could it end again?
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