Term Paper on "Communication and Ethics"

Term Paper 5 pages (1594 words) Sources: 1+

[EXCERPT] . . . .

Communications Ethics

Organizational Communications and Business Ethics in Nigeria, India, and China: Case Studies of Halliburton, Bank of America and Wal-Mart

The term 'globalization' is often used as a monolithic phase with a monolithic meaning. But in reality, the process of globalization is a form of dialogue between an international business organization and another nation's economy and needs.

Globalization involves combining existing business organizational structures with that of a new local culture. The tumult that occurs during an organizational expansion into a new economic environment can be difficult, but productive as well. Every organization and every nation faces different challenges, when posed with the need to globalize. When Bank of America made use of the economic value of outsourcing in India, for example, the Bank made use of a large, inexpensive, yet relatively well-educated English-speaking workforce. Wal-Mart made use of a large population experienced in garment manufacturing on a mass scale in China. And Halliburton in Nigeria also initially made use of a lower-cost English speaking former colony, but with less effective results because of a perceived insensitivity to national needs.

The Halliburton example is considered unsuccessful today because the relationship between the corporation and Nigeria ended with the Nigerian government placing an embargo on government contracts. The Nigerian president said in 2004 that his nation "was taking action against Halliburton Energy Services Nigeria (HESN)" oil services company "as a result of negligence in security and safety matters." He observed that Halliburton had exhibited a lack of concern for the local economy and populace of Nigeria. According to the BBC World News, "in 2002, radiation-emitting devices used by the firm to make measurements in oil wells were reported missing in Nigeria's oil-rich Delta region." Although the devices were later found, the misplacement could have put the local populace at considerable risk, and this event was seen as emblematic of a larger government issue -- Halliburton's lack of concern for Nigeria on a long-standing basis. Thus, the federal government decided to place an embargo on the patronage of Halliburton Energy Services Nigeria Limited "arising from its negligent conduct which led to the loss of two ionizing radioactive sources from Nigeria in 2002." Additionally, the company, among other infractions," had refused to cooperate with government authorities in ensuring the return of the radiation emitting sources to Nigeria and the ultimate resolution of the issue. (BBC News, 2004)

The problems of Halliburton in Nigeria show that even a powerful American defense contractor cannot enter into a developing nation expecting to be accepted with open arms, particularly considering the history of British colonialism that has affected the Nigerian national consciousness, if it acts with disregard to the local population's safety and needs. In contrast, "the decision to increase capital" to India on the part of Bank of America recently, was welcomed with open arms as a demonstration of "the bank's commitment to India as a key market in Asia," said Vishwavir Ahuja, country head for Bank of America, in May of 2005. In February, of 2005 Bank of America announced it planned to expand its operations in India over the course of the ensuing business quarter. "The bank, which set up a subsidiary for back-office operations in the southern Indian city of Hyderabad last year, plans to expand into Bombay," and beyond. (Sacramento Business Journal, 2005)

Of course, there are not as many safety and security concerns in India regarding the local population in regards to the banking industry as there are with defense manufacturing. Still, it seems as though, because the company entered into the agreement with a spirit of respect, it has become one of the most popular of "foreign banks" that "are moving more money into India, lured by the rising incomes in Asia's fourth-biggest economy," combined with its cheaper sources of English-speaking and technically experienced labor. (MacDonald & Daga, 2003) Unlike Nigeria, the African nation's economy is not as expanding at nearly as quick a pace, thus highlighting the dependency of the Nigerian nation upon Halliburton.

The use of India's educated yet lower-cost labor pool encouraged Bank of America to make use of India's emerging markets as well as take its outsourcing one step further, enabling it to cut costs by moving more jobs offshore. "India was chosen because it is a leader in information technology and processing and has a large English-speaking workforce and good infrastructure," one Bank of America executive noted. Band of America has also recently been recruiting Informational Technology staff in Bangalore, India's technology capital, and one of the sites of the leading technical educational institutes of the world, not just the developing Asian region. (MacDonald & Daga, 2003)

India's successful linguistic and technical capability and compatibility with Bank of America does not mean that being able to speak English and to have a level of technical fluency and knowledge is necessary for the successful merger and deployment of globalization in all countries and all industries, however. "The world's largest retailer, Wal-Mart Stores Inc., says its inventory of stock produced in China is expected to hit U.S.$18 billion this year, keeping the annual growth rate of over 20 per cent consistent over two years," noted Jian Jingjing in the Asian business trade newspaper China Daily. The trend is expected to continue, company officials noted. "We expect our procurement stock from China to continue to grow at a similar rate in line with Wal-Mart's growth worldwide, if not faster," continued Lee Scott, the president and CEO (chief executive officer) of Wal-Mart. (Jingjing, 2005)

China is Wal-Mart's most important supplier in the world. The overseas procurement home office in Shenzhen, a city of South China's Guangdong Province, has played a key role in the firm's global purchasing business. The firm bought U.S.$15 billion products from China, half from direct purchasing, the other from the firm's suppliers in China." (Jingjing, 2005) Good quality and low price are the major attractions of the retailing giant, two elements that China's cheaper labor market, but dedicated and conscientious employees provide with abundance. "More than 70 per cent of the commodities sold in Wal-Mart are made in China," and experts say Wal-Mart's plan of increasing its procurement from China has granted the firm a positive corporate reputation in the country. Now, not only do Chinese people work at Wal-Mart, but the company's expansion to the nation as a retailer is likely to prove successful, as "buying more products in China" at Wal-Mart means more job opportunities, for the local populace. This helps the firm win not only the government's hearts, "but also the customers' appreciations," added Wang Yao, director of information department under the China General Chamber of Commerce. (Jingjing, 2004)

But even the titan retailing giant had to make some concessions to Chinese labor practices. Under pressure from the Chinese labor federation, the world's biggest retailer, Wal-Mart Stores Inc., said Tuesday it would permit branches union in its Chinese stores if employees requested it. "Should associates request formation of a union, Wal-Mart China would respect their wishes and honor its obligation under China's Trade Union Law," said the Bentonville, Arkansas-based Wal-Mart Company" in a statement, faxed to the news media." (Agencies, 2004) Wal-Mart has no unionized stores in the United States, but as it sourced $15 billion worth of products in China last year it had every interest to be to full compliance with China's Trade Union Law, which states that establishing a union is a voluntary action of the associates." (Agencies, 2004)

Thus, knowledge of the available strengths of the local population, as Bank of America evidenced in India, combined with sensitivity to local culture and political needs, is essential, particularly when doing business with developing nations. As seen in the case of Wal-Mart, concessions may have to be made to this technically, if not in fact, communist nation. If such… READ MORE

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