Ethics in Our World

The connection between International business and ethics

Introduction

International business has really helped countries become more interconnected, it has helped countries thrive, and has helped with their economic growth. However, there has been many unethical acts from businesses. Two very important ethical issues that will be discussed below are child labour and animal testing. These ethical issues affect billions and are found all around the world. We will discuss the impact of these ethical issues on the government, consumers, and businesses.

Child Labour

Background Information

Child labour is a controversial ethical issue that occurs worldwide and exists in almost every industry. Child labour is the employment of children who are under the legal age. It generally prevents children from attending school. Children often face harsh working environments, and are treated unfairly. The International Labour Organization estimates that 215 million children between the ages of 5-17 work in dangerous conditions. Child labour is more prominent in developing and under-developed countries, and more than half of the world’s child labour occurs in Asia and the Pacific (Child Labour Public Education Project). Child workers, businesses, consumers, and the government are all involved in child labour. Child labour still occurs because consumers, businesses, and the government allow it to occur.

Cost/Benefit Analysis for Child Labour

Consumer

COSTS

1) Consumers face ethical dilemmas due to child labour. They must decide on whether they should buy products from certain companies that use child labour. This may make some consumers uncomfortable about purchasing from certain companies, and may make them feel guilty about supporting child labour if they purchase products from certain companies.


2) A consumer's decision against purchasing from companies that use child labour will result in less product option and variety for them. There are many examples of consumer boycotts which stand up for the issue of child labour. For example, the Nike global boycott has made remarkable changes in the treatment of its workers over the past 20 years (TheGuardian). These consumers stood up for child labour by not buying products or associating with companies like Nike. There has also been another form of protest for Primark, after they were exposed for using child labour. The War on Want supporters protested against this ethical issue in front of a Primark store (Mail Online). These forms of protests limits their options, and they may also have to purchase products from companies that are more expensive, which are both costs of child labour to the consumer.


3) Child labour also affects consumers as it may lead to low quality products. Since children are inexperienced and not educated enough, the products they make may not be up to par. This affects consumers as the products they buy may not last them as long as they wish.


BENEFITS

1) Child labour provides consumers with cheap products. Businesses can sell their products cheaper to consumers when they use child labour because they pay their child workers indecent wages. To illustrate the unjust wages, Malawi's tobacco farms pay children approximately $0.17 for 12-hour working days (Rabin). This benefits tobacco consumers because they get their tobacco for cheaper as the tobacco company is maximizing their profits by giving less money to their employees. Consumers love cheap products because it allows them to purchase more goods for less.


2) Child labour allows consumers to have access to a bigger market. Since child labour occurs more often in developing countries, it allows for increased international trade and globalization. To demonstrate, NAFTA allows free trade between Canada, the United States, and Mexico. Canada and the U.S. take advantage of the elimination of trade barriers and the cheap labour in Mexico. There are many children working illegally in Mexican fields to provide food for Americans (Hawley). Most of the food that can be grown and harvested more effectively in Mexico due to the weather and with the cheap labour, results in increased trade between Mexico and the rest of North America. This benefits consumers as they get more product variety from other countries.

Government

COSTS

1) Child labour results in less educated youth and society. One of the major drawbacks of child labour is that it often prevents children from attending school (Child Labour Public Education Project). . This affects the government as they don't have educated citizens which is necessary for a nation's economic growth.


2) Child labour has led to many deaths. For instance, the NHRC issued a notice to the Odisha government for the death of two child workers who died to a fire (Post). Child labour is disadvantageous to the government as it threatens their image and makes their country seem unsafe. Child labour also makes the government appear irresponsible and uncaring of the safety of their citizens.


BENEFITS

1) Child labour allows developing/under-developed countries be internationally involved through globalization, and helps them gain trading partners, as well as international connections.


2) Child labour benefits the government as it allows countries to gain more money, and a higher GDP through exports. For example, the Uzbekistan government wanted to increase the child labour rates. They increased the rates of forced labour for a year's harvest, because it would provide them with an estimated $1 billion to the country. Apparently, in the Agren district of Uzbekistan, parents had to either pay a fee for their children to not work in the harvest, or remove them from school (Doward). The Uzbekistan government benefited from child labour as it provided their country with a lot of money.

Business

COSTS

1) Child labour may result in less sales for a business. Many consumers may not buy products from a business if they use child labour because it is a major ethical issue. There have been many boycotts from consumers against businesses that use child labour. This also brings ethical criticism for certain businesses, which doesn't do the business any good.


2) Businesses will have unskilled, and uneducated employees while using child labour. Therefore, businesses cannot have their employees do highly skilled tasks, and the tasks must be easy to learn. This limits businesses with products they can make or services they can offer.


3) Child labour often results in unhappy employees for businesses. This may result in inefficient workers, which costs the business time and money. It is important for businesses to have satisfied employees and a positive work environment to thrive. Unhappy employees are not as productive, and do not have the incentive to work harder if they have no reason to.


BENEFITS

1) Child labour allows businesses to gain more profit. Since businesses spend less money on employees' wages, they have more money for themselves. Also, since they can sell their products for less, they can sell more products, which increases their revenue.


2) Certain businesses such as garment manufacturers in Central America's free trade zone, factories in Mexico, and Asia's export processing zones prefer to hire female children because they tend to have nimble fingers (Maquila Solidarity Network). This allows them to sew and make the garments easier than adults, and increases the efficiency of the business.


3) It is also said that businesses benefit from child labour because their child employees are less likely to complain than adults. Children will not complain as much about their unjust working conditions because they are not educated about their rights. Also, children are less likely to organize unions (Maquila Solidarity Network). This benefits the business because they don't have to worry about their employees protesting against them.

Animal Testing

Background Information

Scientists test new substances that are used in products on animals for the harmful effects it can have on humans. Mice and rats are the most commonly used animals for toxicity testing. Animals are exposed to a test substance, either by being forced to eat it, breathe it, have it rubbed on their skin or have it injected. Animals are observed for toxic effects such as vomiting, diarrhea, skin and eye irritation and many other harmful effects. After experiments are conducted on the animals, they are then killed so their organs can be examined for side effects. It is estimated that between 14 and 70 million animals are used in experiments each year. It has impacted people/business the most in developed countries because some argue that it is unethical and cruel.


Cost/Benefits Analysis for Animal Testing

Government

Benefits

1) Increases GDP

- the more consumers know about the product's safety, the more they will be able to purchase products without second guessing it

- a high GDP represents an improving quality of life and animal testing is beneficial for this because companies are able to provide consumers with necessities that are harmless

- since medical research uses animal testing, this corresponds to the total spending on pharmaceutical, which represents 10-20% of health care costs

2) Informative

- advances the knowledge about different drugs and substances and this helps the government identify what drugs and substances its country will be exposed to


Costs

1) Taxes

- the funding of animal testing is done through a countries taxes, which means that if there isn't enough money being generated the government will not be able to pay for animal testing

2) Laws and regulations

- the government has to impose laws and regulations that will limit animal researchers from certain experiments

- some scientists break the laws , due to the restrictions they have

3) Protests

- since governments require animal testing before products are exposed to the public, those who stand up for animal rights may protest so the government imposes laws that animal testing should not be done

- People for the Ethical Treatment of Animals (PETA) protests to eliminate or reduce the use of animals in product testing. They also recommend boycotting companies that continue to use animal testing



Consumer

Benefits

1) Improve health and medicine

- accurate way to learn about the drugs used for medication

- human lives are saved because of the tests that have been done on drugs that are able to cure illnesses

2) Identifies effects

- animal research has helps identify the effects of substances that are being tested

- helps identify the toxicity level of a substance and how harmful it can be for humans

3) Reduces human experimentation

- testing chemicals on humans puts a level of high risk for humans, which is why it is easier to test substances on animals

- since animals produce quicker than humans, animal testing can be done faster on animals than in humans


Costs

1) Human reaction

- animals do not always have the same reactions as a human, which can hurt a human because the side-effects are not similar to the animal

- side-effects can be sever for a human than an animal

2) Sense of guilt

- the cruelty of animal testing makes consumers feel guilty due to the treatment of the animals

- makes consumers feel uncomfortable about purchasing the products

3) Limitation of products

- if animal testing is frequently used in a company's products consumers will not purchase their items

- animal testing will result in less product option and variety for consumers








Business

Benefits

1) Product creation

- allows businesses to create new products, without it harming humans severely

- for example: when creating a new shampoo, researchers rub it on their skin to see the reactions

2) Product safety

- testing cosmetics on animals indicates that the products are safe

- develops a sense of trust from consumers, since they will be able to buy the product more often

3) Provide data

- if consumers report to the company about the damage that their product has done to their body, the company can provide evidence that it used animal testing to see the side-effect of the product

- companies use the fact that the products have been tested


Costs

1) Animal testing is expensive

- animals need to be fed, housed, cared for and treated with drugs

- animal testing may occur more than once over the course of a month, which means that additional costs are incurred

2) Loss of customers

- if a company reveals to their customer that they use animal testing, customers will think of it as being unethical

- customers will not purchase products from the company, which effects their profitability and reputation

3) Animal VS. Human reaction

- substances that are used in animals are never identical to what occurs naturally in human beings, which hurts the business by only selling selective products

- fact: from the pharmaceutical sector 9 out of 10 new drugs that have been tested in animals is unsafe and ineffective in humans