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According to Al-Emadi & Al-Asmakh (2006), global marketing ethical issues and social responsibility influence one another. They expound by indicating that when firms expand to international markets, diverse problems are experienced especially in regard to ethical and social aspects. Mishra & Suar (2010) define the wave of globalization which is enticing firms to take their businesses international. Although the process has been going on for a significant period but has now there is chance to increase market share.
The dilemma of moving into an international market is grounded on the dimensions of political, economical and even cultural differences. There are diverse dimensions of globalization (Al-Emadi & Al-Asmakh, 2006; Mishra & Suar, 2010). Although it can receive diverse interpretations, the key dimensions and thematic categories of factors influencing effectiveness such as economics, politics, sociology, anthropology, communication, geography and psychology. In this paper, focus is turned to the social dimension.
Al-Emadi & Al-Asmakh (2006) and Mishra & Suar (2010) are of the opinion that what is considered normal in one country may be in conflict with another. Consequently, there is diversity and complexity in decision making when expanding to foreign territories. Companies such as XYZ Construction Incorporation which wants to expand to Asian countries will have tough decisions to make. In this paper, a critical review of ethical and social issues that XYZ will have to contend with when expanding to Asia.
Social and ethical issues to be considered
A plethora of studies have been presented to describe the issues concerned with social ethics in regard to internationalization of business activities. For instance, Lee (2009) indicates that corporate social responsibility (CSR) has increasingly become very concept in many organizations with national or international scope. However, Asia is a region that is huge and assuming that XYZ is focusing on multiple countries as a base of its business expansion, then the complexity of the social ethical conditions become even more complex. Lee (2009) and Steenkamp (2001) posit that some of the most common social and ethical considerations that should be considered by an expanding organization are: human rights, environmental regulations, employment practices and corruption.
Al-Emadi & Al-Asmakh (2006) argue that in some nations, ethical issues may be associated with employment practices. Amaeshi, Osuji & Nnodim (2008) exemplifies by indicating one of the notable companies that set base in Asia and which was faced with ethical dilemma in respect to employment practices was Levi Straus.
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Another crucial ethical and social aspect that XYZ should consider is human rights. In many developing countries such Thailand and India, human rights are very essential for better work productivity and consequentially increased market share. Rights such as freedom of association, assembly, speech ad politics are essential to any one organizations if it is going to receive acceptance from countries it has set base (Mishra & Suar, 2010). As alluded in the previous description, working conditions in Asia has not been very favorable as accidents have often occurred taking lives.
Corruption is another ethical aspect that has flourished in developing countries such China where case of corruption may hinder effective productivity (Mishra & Suar, 2010; Steenkamp, 2001). Another social ethical aspect that should be significantly considered is environmental conversation. Due to the increasing activism of environmental conservation, multinational organizations are required to initiate measures to conserve the environment. In other countries such as Nigeria in the case of Shell Oil Company, the environmental pollution proved to be very expensive in terms of compensations and clean up (Steenkamp, 2001).
Cultural diversity and consideration during expansion to Asia
Cultural diversity is one aspect that has been equally studies by a plethora of scholars and researchers (Steenkamp, 2001). According to Mishra & Suar (2010) cultural diversity has been found to have a significant impact on international business operations. They expound by adding that Asian markets can easily be comprehended through groupings such as demographic groups. For instance, Lee (2009) conducted a study on the behavior of female and male adolescents towards green purchasing behavior. His findings indicated that female respondents had a significant positive attitude towards environmental concern and conservation. Additionally, they believed in environmental responsibility. In other words, they favored organization which observed their environmental responsibilities. However, the male adolescents had significantly higher self- identity in regard to environment protection.
Mishra & Suar (2010) also indicate that organizations intending to expand to Asia have to understand that they need to understand cultural differences between home and foreign countries. For instance, due to cultural diversity, most Asian countries are inhabited with Muslims who do not eat some food staffs or uphold some behavior. However, to understand the value of cultural diversity, Al-Emadi & Al-Asmakh (2006) has indicated that the Hofstede dimensions can be used. These dimensions include: individualism, uncertainty avoidance, masculinity and power distance. These are the dimensions that can easily help organization expanding to any international such as XYZ to understand the cultural differences/ diversity and hence make a decision on which country to invest in. However, the Hofstede cultural model has been criticized by diverse scholars who suggest that its approach is narrow in scope and hence cannot capture some of the unique relationships in regard to cultural diversity and influence on consumer behavior. This is the tool that XYZ can use in studying the cultural diversity of Asian countries and its home country. While applying this tool, there three cultural concepts that boost understanding of the market: strength of ethnic affiliation, the concepts of ethnic identity and situational ethnicity. According to Al-Emadi & Al-Asmakh (2006), these trends can be used in developing market segments.
In summary, social ethical issues that XYZ should consider are diverse. However, environmental conservation, avoidance of corruption, implementing human rights and employment practices are some of the best issues to observe. In respect to cultural diversity, the organization can use Hofstede’s culture model in deciphering which country has relative favorable expansion opportunity. Studies such as Lee (2009) and Mishra & Suar (2010) have exemplified how culture and demographic groupings can influence business performance.