Complete the sentences with the expressions from the box.
Transparency, bribes, ethics, stakeholders, social audits, stakeholder theory, social reporting, public relations, exercise
1. The company was accused of giving ……… to local officials in order to allow their products into the country more quickly.
2. Voters demanded that there should be greater ……… in the election process so that they could understand it fully.
3. Following the scandals of Enron, Worldcom and others, there is greater emphasis in business schools on the teaching of ……….
4. The management has to be aware of its wider responsibilities to the community, not just employees and shareholders, when presenting new proposals. This is sometimes called ……… ……….
5. There is a risk that companies in industries that are more renowned for polluting and exploiting that caring and sharing could adopt ……… ……… and use it to highlight their more ethical activities, purely as a ……… ……….
6. Auditors should also be required to report to a wider interest group than just the shareholders. These ……… could include bankers, customers and suppliers, potential shareholders, employees and even government departments.
E. Creative Consolidation
Write an article about the importance of socially responsible business in Russia.
2. Make a synthetic review of the article “America’s Hamburger Helper”, supporting it with the information from other sources.
Make a 350-word project on one of these issues for presentation at mini-conference on relevant topic. Prepare to answer the questions after your presentation.
Do the following activities, several of which are not illegal, conform to the basic rules of the society, or not?
Bribing corrupt foreign officials in order to win foreign orders, on the grounds that where bribery is a way of life, you have no alternative if you want to win a contract.
Industrial espionage – spying on competitors’ R&D departments with concealed cameras and microphones, bribing their employees, etc. – rather than doing your own expensive research and development.
Selling supposedly durable goods with “built-in obsolescence”, i.e. which you know will not last more than a few years.
Spending money on lobbying, i.e. trying to persuade politicians to pass laws favourable to your particular industry.
Telling only half the truth in advertisements, or exaggerating a great deal, or keeping quiet about the bad aspects of a product.
Undertaking “profit smoothing, i.e. using all the techniques of “creative accounting” to hide big variations in profit figures from year to year, and threatening to replace the auditors if they object.
“Whistle blowing”, i.e. revealing confidential information to the police or to a newspaper, e.g. that a company is breaking health and safety regulations and therefore putting people’s lives to danger, or illegally selling arms to foreign dictators.
Revealing clandestine information as well as the details of running business in a company after leaving it to its competitors.
➢ Look through the articles and choose one for presentation. Find at least one more article on the same topic and make a synthetic review.
■ 1.6 A. The Mystical Power of Free Trade
By Michael Kinsley
Some people find it hard to believe it really works, but it does.
Free trade is always a hard sell. In all social science, the proposition that comes closest to being scientific, in terms of being theoretically provable and true in real life, is that a society benefits from allowing its citizens to buy what they wish—even from foreigners. But people resist this conclusion, sometimes violently, as in Seattle last week. Why?
A couple of reasons. First, the principle of free trade may be true, but it's not obviously true. In fact, it's counterintuitive. If a factory shuts down because of a flood of cheap foreign products, how is that good? If the middle-class finds itself competing with workers being paid practically nothing and living in squalor in other countries, how can this send the middle-class standard of living up and not down? If another nation is willing to pollute its air and water in order to produce goods for sale in the global economy, how can a country join that economy and still hope to keep its own air and water clean?
There are answers to these questions, but they take a bit of background and a bit of persuading. Students of economics are led step by step through layers of reasoning until the moment they see the light. Skeptics think that the whole routine is like induction into a religious cult and that free trade is more like an article of religious faith than a sound policy recommendation. These skeptics are wrong, but their skepticism is understandable.
The other reason it's hard to sell free trade is that any given example tends to benefit a lot of people in small ways that are hard to identify and tends to harm a few people a lot in ways that are vividly evident. When that factory shuts down, the unemployed workers know they've suffered a loss, and they know why. And it's a big enough loss to stir them politically. It will affect their vote at least, if not cause them to march in the streets.
By contrast, budget-conscious shoppers (maybe those same workers) who are able to save a few bucks on a new sweater are not likely to realize they are enjoying a bargain as a result of global trade or to take to the streets to defend their right to a cheap sweater. Or suppose the U.S. slaps a tariff on foreign sweaters and the foreign country retaliates by raising a tariff on something the U.S. is selling them—the people who would lose their jobs aren't even identifiable for sure, though for sure they exist. Likewise the people who lose jobs because shoppers who have to pay more for sweaters have less money to spend on other things.
It's by considering all these things—the risk of losing your job one way minus the risk of losing it another, the extra money you make if your industry is shielded from foreign competition minus the extra money you pay for goods and services that are protected—that you reach the conclusion that on average, free trade benefits us all. Yes, there are various economic theories about circumstances in which all this may not be true, but their authors win prizes precisely because the circumstances are unusual. In general, the numbers work irrespective of what policies other countries follow. They just get worse if one country's trade restrictions lead other countries to impose more of the same. Trouble is, who's got time for all that math?
Still a half-century of general prosperity in the U.S. has created a climate of toleration, if not enthusiasm, for the free-trade gospel—mostly, indeed, as a gospel of our civic religion rather than out of anyone's buying the math. Alarm about imports tends to ebb and flow with the economy—less in good times, more in bad. So how, in the best times ever, did the World Trade Organization become the global bogeyman? No earnest college kid ever hitched across the U.S. to carry a picket sign against the General Agreement on Tariffs and Trade, the WTO's predecessor, although its function was similar. It took decades for the cia, the Trilateral Commission and the Council on Foreign Relations to achieve their places in the pantheon of political paranoia. The WTO has joined them in just four years. And it is despised across the entire political spectrum, whereas these other groups symbolize evil only to one political extreme or the other.
Part of the explanation is the special nature of the current prosperity, which is widening the income gap rather than narrowing it, as in the past. Part is the growth of global economic forces that are actually impinging on national sovereignty, even though it's the paranoid hysterics who say so. But the WTO isn't responsible for either of these trends, both of which are probably inevitable and neither of which undermines the basic case for free trade or for an organization empowered to promote trade through binding arbitration of trade disputes.
Maybe it's the name. If you call yourself the World Trade Organization, you can't complain much if people dial your toll-free number and gripe about world trade. If a bunch of heads of government plan a triumphalist self-celebration in Seattle, you can't blame party poopers for showing up to horn in on the publicity. But really, the WTO is O.K. Do the math. Or take it on faith.
proposition – a judgment, suggestion (business, politics)
benefit – (from)to bring advantages to someone or improve their way in some way; benefit (v):have the benefit of; reap the benefit of (=use and enjoy the advantages of something you have worked to achieve); be of benefit (be useful or helpful in some way); be on benefit; give sb the benefit of the doubt – to accept what someone tells you even though you think they may be lying
hitch– to ask a free ride from the drivers of the passing cars by putting your hand out with your thumb raised; hitch-hike; hitch (n) - a problem that delays something for a short time: without a hitch
induction– the introduction of someone into a new job, company, official position: induction course; a ceremony in which someone is officially introduced into an official position; induct (v),inductee (n). Compare: induce – to make someone decide to do something, especially something that seems unwise; to cause a particular physical condition; inducement – something such as money or a gift that you are offered to persuade you to do something
stir – mix, move slightly; make someone have a strong feeling or reaction: stir sb’s memory/imagination; to cause trouble; stir (n) a feeling of excitement or annoyance: create/cause a stir; stirrings ( of love/ douby/ rebellion) early signs that love is starting
slap – to hit someone with the flat part of your hand; slap down– criticize unfairly and unkindly so that they lose confidence; slap sth on – to suddenly announce a new charge, tax etc, especially unfairly or without warning
retaliate – to do something bad to someone because they have done something bad to you; retaliation (n): in retaliation for
impose – (a ban/ tax/ fine etc on) – to officially order that something should be forbidden, restricted, taxed; impose a burden/ strain etc on/ upon- have a bad effect on someone by causing them problems; to force someone to have the same ideas or beliefs; imposition(n)
prosperity – a condition of having money and everything that is needed for a good life; prosper (v), prosperous