Ethics
Many ethical principles extend across cultures and nationalities. However, what is acceptable in one country may not be in another, such as the nature of working conditions to forms of promotion. Firms have to be sensitive the beliefs of local populations and whether it is ethical to export cultural norms and values.
The tourist industry is an example of the effects of globalisation and the reduction in barriers. By 2020, it is forecast that there will be 1.6 billion international tourist arrivals worldwide. These tourists will spend over US$2 trillion. These figures represent sustained average annual rates of growth of 4.3 per cent, far above the maximum probable expansion of 3 per cent per year in the world's wealth.
Tourism employs one in ten workers worldwide, around 250 million people. At current growth rates, this could rise to over 400 million by 2015. Globally, tourism accounts for roughly 35 per cent of exports of services and over 8 per cent of exports of goods. These figures would make tourism the world's largest employer and arguable its largest business in terms of income.
There are consequences to the globalisation of business activity. As tourists, you and I often seek out destinations, which are new, exciting, and relatively unexplored; difference is the change we are seeking. The fastest growing markets in terms of annualised growth for travel and tourism demand are Angola, Mexico, Turkey, China and India. Tourists bring 'cultural baggage' with them when they travel. We often look to experience different cultures and sights, but seek hotels that offer traditional home luxuries and an environment that mirrors our domestic lifestyle. We also bring enormous wealth with us and this can distort employment patterns within countries as local employees seek the higher rewards offered by the tourist industry. Areas of high tourist activity in relatively poor communities tends to encourage the development of less acceptable 'industries' such as prostitution and the crime' industry', which frequently accompanies this.
We also tend to export our cultural norms and values. Western tourists are prepared to walk around even town centres in beachwear, when local populations regard modesty as a virtue and/or a religious requirement. The tourist industry can be regarded as unethical in its aims and operations.
Of course, the tourist industry is not the only cultural export. Many people learn to use English, not just in the classroom, but in the words of millions of pop songs broadcast across the world. Fashion trends are 'exported' through videos and on the worldwide web. Pop stars, film celebrities and, increasingly, sports icons such as Michael Jordan, Rafael Nadal, Cristiano Ronaldo and David Beckham endorse multinational brands and set fashion directions.
The export of cultural values will affect the aspirations and dreams of local populations. This inevitably will have implications for the political development of a country as the 'new generations' demand economic, cultural and social reform.
Cultural and ethical issues within international marketing extend into employment practices of multinational corporations, including how they treat local employees. Whether the local population perceives them as a foreign or local firm may influence purchasing decisions and attitudes to further expansion, especially by government.
Ethical and policy considerations for multinationals, acting in international markets, will include some of the following:
- Does the firm understand the societies and cultures in which it operates?
- Does it offer local staff similar terms and conditions to those offered in other parts of the business?
- Does it provide equal opportunities for local employees?
- Is the firm aware of the norms and values of the local communities?
- Do the firm's operations have a negative effect on the local and/or national community?
- Does it encourage local suppliers?
- Do local customers and suppliers trust the firm?
- Is ite regarded as a foreign or 'local' firm?
An actual example may help provide a suitable example for an examination.
