Business Ethics in the Global Age

Abstract

Globalization of the world economy encourages borderlessness, a phenomenon in which the internationalization of markets diminishes the political, technological, and cultural sovereignty of nation states. As economic globalization progresses, the interdependent relationship it engenders among nations creates friction. Any political solution must be based upon sound economic logic and ethical principles. Post-war history has seen the emergence of two distinct economic systems: Western classical capitalism and the Japanese market economy. By utilizing market efficiency as a criterion for comparison, we see a fundamental difference in the basic elements of these respective systems. Japanese companies prioritize people while their Western counterparts prioritize returns to shareholders. Furthermore, Japanese labor unions are companywide and work within a cooperative model of labor management. Western unions are industry-wide, based upon craft, and work within a confrontational model. These differences are rooted in ideology -- the Japanese, guided by the market principle of competition, favor group oriented activity; while the West, heavily influenced by the class principle, favors individualism. The former produces stronger results, because it is more consistent with economic rationality and ethical ideals.