Incoterms 2010 and International Business - 101
International Business: Environments and Operations, 15e (Daniels et al.)
CHAPTER ELEVEN: GLOBALIZATION AND SOCIETY
CHAPTER ELEVEN: GLOBALIZATION AND SOCIETY
OPENING CASE: ECOMAGINATION AND THE GLOBAL GREENING OF GE
In 2005, CEO Jeffery Immelt of GE announced a new and ambitious strategy designed to demonstrate that an ecologically conscious conglomerate can cultivate the bottom line while doing its duty toward the global environment. GE surprised both investors and industrial customers who had long seen GE as an ally in the struggle against environmental activists. The initiative, called Ecomagination, consisted of three parts: 1) reducing greenhouse emissions, 2) doubling investment in R&D in “clean” technologies, and 3) increasing revenues from those same technologies. A new initiative added two additional commitments: 4) reduce global water use and 5) keep public informed. With half its markets outside the United States and many countries already enforcing limitations stipulated by the Kyoto Protocol, GE felt it was pursuing its own best interests to develop a greener company. GE feels that markets exist for cleaner technology and that it can not only help the environment, but also strengthen its strategic position with such a move. The plan has been met with mixed reactions and the big question is: Can GE bring about sufficient ecological and economic results to satisfy a worldwide constituency of customers, shareholders, governments, and societies?
Questions
- What are the major challenges GE faces in adopting a green strategy while keeping all of its stakeholders happy?
Challenges: (1) Address customer needs: Meet growing customer demand for more energy-efficient products with associated environmental benefits, (2) Devise a consistent strategy: Create a strategy to create value from clean tech and environmental challenges innovation that reinforces GE’s business strategy, (3) Promote innovation: Increase innovation in product design around energy and environmental challenges, and (4) Maintain leadership: Build on ecomagination’s initial success (2005-2010) to broaden the strategy and further extend GE’s leadership in clean tech and corporate sustainability. (LO: 3, Learning Outcome: To discuss the importance of social responsibility when operating internationally, especially in the area of sustainability, AACSB: Analytical Skills)
- From the standpoint of environmental impact, do you think it is more important for GE to reduce its carbon footprint or to develop products that fit their Ecomagination strategy of being energy efficient?
The Ecomagination strategy has always been to encourage the development of quality GE products that deliver significant operating and environmental benefits to customers. (LO: 3, Learning Outcome: To discuss the importance of social responsibility when operating internationally, especially in the area of sustainability, AACSB: Analytical Skills)
CLOSING CASE: Anglo American PLC in South Africa: What Do You Do When Costs Reach Epidemic Proportions?
Anglo American PLC is a mining conglomerate that operates in 45 countries. Founded in 1917 as the Anglo American Corp. of South Africa and now headquartered in London, Anglo American is the largest producer of gold in the world. With a South African workforce of more than 105,000 permanent employees, the firm is one of the largest in the region. Heavily affected by the HIV/AIDS epidemic, Anglo American was one of the first companies to establish a proactive, comprehensive strategy to combat the raging effects of the disease on its workforce and production systems. Along with many other MNEs, Anglo American also joined the Global Business Council on HIV/AIDS, an organization that focuses on (a) alleviating the effects of AIDS throughout the world and (b) protecting the rights of infected workers. In response to the failure of its AIDS prevention policy, the company announced in 2002 that it would be providing free antiretroviral therapy to HIV-infected employees at its South African operation. Previously the company had developed AIDS prevention education and awareness training to employees because the disease was so widespread among its workforce and was having financial consequence for the company. Anglo American now spends an estimated $4,000 per year per employee on the drug treatments, and estimates that it will cost the company $1 billion or more over 10 years. There are many challenges facing the company such as getting the drug manufacturer to provide lower costs, employee compliance with the program, and criticism from various constituencies that the company isn’t doing enough to help solve the problem. Given these problems, some have suggested that the company would be better off stopping the program rather than pouring more resources into it.
Questions
- Who are the various stakeholders that Anglo American needs to consider as it adopts an effective HIV/AIDS strategy?
The National Union of Mineworkers still criticizes the company for their working conditions and lack of support for correcting the underlying causes of HIV/AIDS. Anglo American does not believe that the South African government and politicians are doing their part in combating the overall problem. The pharmaceutical companies themselves are not without controversy. Issues over pricing and intellectual property right protection are common concerns. (LO: 3, Learning Outcome: To discuss the importance of social responsibility when operating internationally, especially in the area of sustainability, AACSB: Analytical Skills)
- What are the pros and cons of Anglo Americans’ adoption of an aggressive strategy in combating HIV/AIDS among its South African workforce? What recommendations would you give the company concerning its HIV/AIDS policy?
The pros of adopting an aggressive strategy to combat HIV/AIDS in their workforce include the high costs associated with the disease as it relates to worker productivity, turnover, and other costs. It is cost-effective to have a program in place that increases the wellness of the workforce. There is also an ethical argument that can be made for the program. Anglo American has the resources to combat the problem, and the disease has a devastating effect on the lives of its workers and their families. Furthermore, Anglo American has been a leader in the South African business community and their actions may influence other responsible companies to help combat an illness that has the potential to ruin the country’s economy. On the other side, the cons of the program include the negative reactions the company received from the union and the government, the difficulties of successfully implementing the program, and the unforeseen consequences of additional unsafe sexual practices. In addition, the treatment program is not inexpensive. Student opinions will vary on recommendations; however, it seems reasonable to argue that given the ethical and cost factors, the ART program should continue in place. Better implementation of the program is needed. (LO: 5, Learning Outcome: To examine corporate responses to globalization in the form of codes of conduct, among other things, AACSB: Dynamics of the Global Economy)
- Because such a large percentage of its workforce consists of migrant workers who are more likely to acquire and spread HIV/AIDS, should Anglo American adopt the policy of not hiring migrant workers? Should the South African government close the doors to migrant workers?
Migrant workers pose a special problem, not only in terms of infection rates, but also because of the widespread prevalence of the disease. This situation poses a moral dilemma for discussion. The migrant workers need employment, perhaps even more than the non-migrant workers. Discriminating against them will not solve the problems faced by Anglo American or South Africa. The problem may be lessened a bit; however, a better solution is to seek the cooperation of the South African government in increasing its budget for HIV/AIDS education, prevention, and wellness. (LO: 4, Learning Outcome: To discuss some key issues in the social activities and consequences of globalized business, AACSB: Dynamics of the Global Economy)
11-6. What role do the pharmaceutical companies play in responding to the HIV/AIDS epidemic in South Africa? Given that India can manufacture and export HIV/AIDS drugs much cheaper than they cost pharmaceutical companies themselves, should Anglo just import these drugs to be used for their employees?
The pharmaceutical companies have a unique role to play in the HIV/AIDS epidemic in South Africa and throughout the world because they are the source of the drugs with which to combat this plague. However, the enormity of the epidemic is truly daunting. Given the sheer number of people in need, on the one hand, and the utter lack of resources, on the other, one could easily conclude that there is relatively little that can be done to alleviate the suffering and stop the spread of the disease. Still in all, the pharmaceutical companies can seek to partner with aid agencies, international organizations, governments, and the private sector in their search for acceptable and effective solutions. Pharmaceutical firms will most surely be concerned about the issue of patent protection and generic drugs, as well as the prospect of tiered pricing and significantly lower profit margins. Governments, other members of the private sector, and other stakeholders will all need to be mindful of the tremendous costs and risks that are borne by pharmaceutical firms. Further, given the extent and the seriousness of the problem, a lack of commitment on the part of any stakeholder will be a serious setback in the march toward a community solution.
With reference to the second part of the question, students’ responses to this question can vary. Anglo American initially took the view that this was not just one company’s problem, and called for greater involvement on the part of the South African government. However, this was met with resistance. It would be expected that they will continue to receive pressure from their ethically minded shareholders as well as its own sense of moral responsibility and should agree to import these drugs from India for use by their employees. (LO: 5, Learning Outcome: To examine corporate responses to globalization in the form of codes of conduct, among other things, AACSB: Ethical Understanding and Reasoning Ability)
------
VIDEOS
See full video List here - link
EBOOKS
Incoterms 2010 - Ebook - link
Incoterms 2010 - Guides - link
Incoterms 2010 - Guides - Light Version - link
Incoterms 2010 - Q & A - link
Incoterms 2010 - English Vietnamese - link
Incoterms 2010 - Reviews - link
Incoterms 2010 - Incoterms new 2016 - Made easy e-Guides - link
Incoterms 2010 - Case Study Guides - link
INTERNATIONAL BUSINESS - FREE DOWNLOADS
International Business: The New Realities, 4th Edition, Cavusgil, Knight & Riesenberger
International Business: The Challenges of Globalization, 8th Edition, Wild & Wild
International Business, 15th Edition, Daniels, Radebaugh & Sullivan
International Business: A Managerial Perspective, 8th Edition, Griffin & Pustay
DOWNLOAD Ebooks - here
DOWNLOAD Slides - here
DOWNLOAD Video List - here
DOWNLOAD Test Bank - here
DOWNLOAD Case Study Guides - here
Any Question, email to: ecomftu2012@gmail.com
No comments:
Post a Comment