2.2. Environmental standards

nation states lost their capacity to regulate them [3, 4]. Corporations took advantage of regulatory arbitrage, relocating to low tax jurisdictions and lax regulations on labor and environment. Multinationals structured global value chains by relocating purchase, sales, support and product development activities to locations where they could be done better, faster or cheaper [5]. In domestic business environments, national laws and traditions establish a shared ethical framework on what businesses can and cannot do. A French company operating in France knows that it must comply with well-established labor, environmental and governance rules backed by reliable enforcement mechanisms. However, in its overseas operations, the company often faces substandard regulatory frameworks and weak enforcement mechanisms, which present the opportunity of obtaining benefits through practices that would be unacceptable at home. Many dilemmas arise about the moral legitimacy of capturing such benefits.

In this chapter, I review the challenges that economic globalization and technological change

First, I will present the new set of moral dilemmas that arise in labor standards, marketing practices, environment, corruption and human rights, as companies operate across diverse cultural and legal frameworks. Second, I will review the answers that governments, corporations and civil society actors have developed to assist managers in international decision making. Third, I will review how business ethicists have adapted moral frameworks such as libertarianism, utilitarianism, deontology and virtue ethics to address the specific challenges of

In the 1960s and 1970s, companies in developed economies began to relocate production facilities and contracting in emerging countries to cut labor costs [6]. Offshoring raised the number moral dilemmas in the issue of sweatshops [7–10]. Some argue that sweatshops violate duties of justice because the company offers lower pay and working conditions to employees in the host country for the same kind of work. Others believe that sweatshops ought to be encouraged because they are a necessary first step for economic development in emerging

Child labor is an especially critical issue in such debates. Managers from a Western multinational would not even think about hiring children in their home country since it would be both illegal and offensive to the moral sense of the community. In some emerging economies, however, child labor is common and even essential for the subsistence of the child. Does this

Other dilemmas involve differences in worker safety standards. The SS United States was one of the most luxurious cruise ships of the 1950s. In the 1990s, the company decided to have it refurbished which required removing asbestos from the vessel. Conducting the task under US

are posing to multinational corporations (MNCs).

2. The moral dilemmas of globalization

make hiring children morally acceptable?

global business.

104 Globalization

2.1. Labor standards

countries [11].

Technological progress triggered exponential growth in human ability to alter the environment. While this has countless benefits, it also raises a number of dilemmas about the use of natural resources in societies with poor environmental regulations [12].

Texaco was accused of making irreversible damage to the Ecuador rainforest because of the use of low standards in the 1970s and 1980s. A similar case happened in southern Argentina's shale gas field of Vaca Muerta. Protests have arisen against the activities of oil companies YPF and Chevron for using allegedly low environmental standards in fracking [13].

In the late 1990s, the Finnish company Botnia planned the construction of a pulp mill in the city of Fray Bentos (Uruguay), on the shores of the Uruguay River near the border with Argentina. The project was heavily resisted by environmental advocacy groups. Botnia was accused of making extra profits by following lower environmental standards than in the home country.

Another frequent international environmental dilemma is related to toxic waste. It is estimated that a considerable part of China's arable land is polluted with lead, zinc and other heavy metals exported from developed economies. Old computers that are discarded in the United States usually end up in China, where the cost of disposal is 90% lower [14]. Some emerging economies have sought to attract foreign direct investment by lowering environmental standards, in a phenomenon known as "race to the bottom" and the creation of countries that work as "pollution havens".
