Ethical Issues in Globalization and International Marketing.

ABSTRACT:

The globalization of markets and increase in the productivity made several marketers and business persons to concentrate more on the ethical issues in cross-cultural settings. This article is mainly intended for ethical analysis and making decisions over the international marketing scenario. This paper provides few guidelines which may serve marketers in the area of marketing ethics. It is also used to assist out the marketers to behave in an ethical fashionable way. The local marketing conditions may differ out along from place to place, but some global marketing ethical principles should be applicable to all markets along the world. This Paper suggests creating a standard uniform code of ethics that will provide a solution to the problem of diversification in different cultures by implementing strategies in international marketing.

Keywords: Globalization, International Marketing, Ethical principles.

INTRODUCTION:

Globalization and international marketing ethical issues are allied with one another. Steady increase in globalization lead to few problems which include ethics. From 1950 to 2000, world trade expanded almost 20-fold, far outstripping world output, which grew by six and a half times (WTO, 2001). Globalization refers to the process in which different cultures, societies and economies throughout the world will be connected and integrated through by a global network of transportation, communication, trade and business. This term is sometimes referred to as a economic globalization where several economies of the nations are combined through by a foreign investments, trade, capitalization, migration and many other factors. And it may be referred through by various other related terms. Increase in the globalization may result in many problems including ethical ones as both are related through in one way or the other. From past four decades the global trade increased by seven times where imports, exports, trade and foreign investments played a major role in its increasing extent and surveillance.

Even the cross border investments of small and medium ranging businesses are also increased almost five to six times in its productivity, yearly outflow and development along from the past 25 years and this meant that different persons are working along different geographical, social and marketing boundaries along worldwide. This shows out alternatively the related problems along with the change of different environments including ethical problems, financial and marketing personnel problems along locally and globally. If this trend continues the prophesies about globalization by Levitt will become reality in 2020. (Recep Yücel, 2009) To manage out this trend fairly and situational there is a need to create universal ethical principles and norms.

Theoretical Framework:

Globalization:

2.1.1 History:

According to Friedman (1999), globalization is:”The inexorable integration of markets, nation States and technologies to a degree never witnessed before”.

Globalization is a term which was proposed and under veining its extent and development from thousands of years. But it significantly accelerated from 1980´s after the demolishment of USSR. The word globalization is first employed in oxford dictionary in 1930. In considering the history of globalization, some authors focus on events since the discovery of the America in 1492, but most scholars and theorists concentrate on the much more recent past (www.globalpolicy.org).It was not until 1960´s the term is widely used by economists and other social scientists. Since from its evolution the term is inspired to numerous and conceptive wordings and definitions dating back across the movements of different trading and cultural perceptive. United Nations termed the word globalization has many meanings and ways to define. According to it when using the term globalization in economical context it may refers to the one which cuts out the boundaries or barriers in between different nations and establish out the smooth and efficient way for their trading and exchange which may include capitals, services, labor etc.

Tom.J.Palmer described globalization as “The diminution or elimination of state- enforced restrictions on exchanges across the borders and the increasingly integrated and complex global system of production and exchange that has emerged as a result. Roughly economic globalization is world trade and financial marketing integrated together.

Globalization in other terms may refer as the process of forming global institutions. The global institutions are those which may be operated as that considering the entire world as single place. They may be distinguished from others in various terms such as in functioning at regional, national and international where each level may represent a different scope and set of social relationships.

2.1.2 Dimensions of Globalization:

Globalization is the term which may be represented in various dimensions and it related to almost every fields of daily life. It differs from profession to profession i.e. for example it differs from some marketing staff to an engineer.

Dimensions for globalization are as follows: (www.globalpolicy.org)

Economics-Related to globalization in trading, finance, money, corporations and banking.

Political-Related to science, governance, wars, peace, IGOS, NGOS, regimes.

Sociology-Related to communities, conflicts, classes, nations, agreements.

Psychology-Related to individuals as subjects and objects to global action.

Anthropology-Related to overlapping of cultures, adapting, clashing, merging.

Communications- Related by considering information as knowledge and tools-internet.

Geography- Everything provided it can be anchored to as space.

We do not consider globalization as some purely economical, industrial or some financial term which may relate or revolve through problems like free trade or some expanding role of financial and industrial markets. We consider globalization as a multi dimensional term and in fact it is a spectrum of four processes.

Building the global economy

Formation of world opinion

Democratization, or the creation of a global economy

The emergence of global political institutions.

Building the global economy is the process where when once got up in the longer run its evolution related to international and interregional trade is primarily a function not of actual and growing gnp but will potential for structural change. The rapid emergence of global financial markets over the past two decades and they particularly effect the foreign exchange field and other forms of international investment will lead to reduce the influence of even major governments on their economy and in global economies and might loosen out the links between economic and political power has been broken out. According to Kongar, globalization has three dimensions. These are political, economic, and cultural aspects of globalism (www.kongar.org).

Formation of the world opinion is the process where the working of the world system and all its conditions and actions of the participants are oriented to a common set of problems coming out from responsive to common aspirations and emerging out from world-wide problems. It is a process of social construction which contains both the reality and the values. Reality helps us to make sense of the world and values help us to keep priorities which we can accept some and to reject parallel.

Democratization is the process in which one can define in narrow and the broadest terms. In broader term one may be defined it as a learning process in which humans can try to learn itself in the condition of `equality under law`. Similarly in narrower context we can define it more precisely as accumulation of conditions necessary for possible emergence of a global community, community of democracies and a global level association of a democratic character.

Global Institutions:

The emergence of global institutions is the process which shows up to what extent the global institutions will sort out the effect of globalization. When comes to globalization in international business it splits out to two faces one in markets and the other in production.

The globalization of marketing side is the one in which merging of historically distinct markets in order to convert it into a huge global market and globalization of production refers to the merging of goods and services from although the world to take advantages in several national conditions like the difference in cost and quality factors etc.

As markets globalize and increasing in cost factor and productivity, several globalized institutions are formed to manage out the matters related to this such as to manage, regulate the policies and to form several multinational treaties to govern the globalized business system. From past 55 years more number of global institutions has evolved to perform these tasks they are, “General Agreement on Tariffs and Trade”(GATT) and its successor, the “World Trade Organization” (WTO); the “International Monetary Fund” (IMF) and its twin sister, the “World Bank ” and the “United Nations” (UN). All these institutions were created by voluntary agreement between individual nation-states, and their functions are enshrined in international treaties. (Hill, ibid: 9) All the above institutions play a major role in developing international business ethical rules and regulations. World Trade Organization is mainly responsible to guide and focus on all the countries who signed the treaty. Till date W.T.O has more than 145 nations and its purpose is to develop multinational agreements between the country member states. (www.imf.org).

Global Business Strategies:

Theodore Levitt (1983: 92-102) has argued that, due to the advent of modern communications and transport technologies, consumer tastes and preferences are becoming global, which is creating global markets for standardized consumer products. Local companies deal with overseas business investment and trade, managers must identify that managing international business vary from managing local business. We can observe that each country is unique, in culture, laws, legal systems, political factors and economy of country. Despite widespread globalization, still there are many big and enduring differences between the countries (Hill, ibid:. 19-37).

Marketing strategies change from country to country as there is difference in culture and other factors. If we assume marketing strategy used in India may not be applied in Sweden and the strategy implemented in Sweden is not implemented in USA because of difference in various factors among countries for instance if we consider advertising in Germany it is illegal to use comparative advertising (Cateora & Graham,2005: 483). Kuwait government controlled TV network to allows only 32 minutes of advertising per day in the evening (Sunil Erevelles and his colleagues,2002).

According to Barlett and Ghoshal (1989), firms can use four strategies an international strategy, a multi-domestic strategy, a global strategy and a transnational strategy. Company use international strategy focus on transferring skills and its products transformed from different overseas market and give less importance to local markets. Organizations implements multi domestic strategy alters their marketing and business strategy to local or domestic conditions. Companies implement global strategy focus on acquire cost reductions produced from experience curve effects and local economy. Company implement transnational strategy involves a parallel focus on declining of costs, transferring skills and products.

Ethical Problems in International Marketing:

Research in Marketing Ethics is defined as “the systematic study of how moralstandards are applied to marketing decisions, behaviors and institutions” (Laczniak andMurphy 1993).

2.2.1 History of Ethics:

Ethics is related to the field of philosophy concerned with morals and values. Ethics is divided into five branches: Meta ethics, Political ethics, normative ethics, virtue ethics and practical philosophy.

Meta-Ethics: It focuses more on the grounds used to justify moral judgment than moral creating moral judgment. This ethics is just descriptive.

Political-Ethics: It is concerned more on testing good society and the origins of political power such as government.

Normative-Ethics: It is related to the developing theories which decide the actions done by human are right or wrong. Deontological ethics, utilitarian ethics and virtue ethics are all normative.

Practical-Ethics: This ethics uses ethical principles and theories in practical environment such as, medical ethics, business ethics etc.