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GLOBALISATION AND BUSINESS ETHICS
Law, Ethics and Economics
Series Editors:
Christoph Luetge, University of Munich, Germany
Itaru Shimazu, Chiba University, Japan
Law, Ethics and Economics brings together interdisciplinary books which deal with
at least two of the three constituents. Among other subjects, this series covers is-
sues in ethics and economics, law and economics, as well as constitutional issues in
law, economics, philosophy and social theory. The focus is on theoretical analysis
that goes beyond purely normative considerations, thus aiming at a synthesis of the
desirable and the feasible.
Also in the series:
Deliberation and Decision:
Economics, Constitutional Theory and Deliberative Democracy
Edited by Anne van Aaken, Christian List and Christoph Luetge
ISBN 978 0 7546 2358 8
Globalisation and Business Ethics
KARL HOMANN
University of Munich, Germany
PETER KOSLOWSKI
Free University Amsterdam, The Netherlands
CHRISTOPH LUETGE
University of Munich, Germany
Edited by
© Karl Homann, Peter Koslowski and Christoph Luetge 2007
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system
or transmitted in any form or by any means, electronic, mechanical, photocopying, recording
or otherwise without the prior permission of the publisher.
Karl Homann, Peter Koslowski and Christoph Luetge have asserted their right under the
Copyright, Designs and Patents Act, 1988, to be identified as the editors of this work.

Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham, Wiltshire.
Contents
List of Contributors vii
Introduction ix
PART I GLOBALISATION: CONCEPTS AND PROBLEMS
1 Globalisation from a Business Ethics Point of View
Karl Homann 3
2 Concepts of Globalisation:
The Institutional Prerequisites for the Integration of World Markets
Michael Ehret, Michaela Haase and Martin Kaluza 11
3 Diagnoses of Our Time:
Theoretical Approaches to the Globalised Age
Manfred Prisching 27
4 Globalisation as a Gendered Process:
A Differentiated Survey on Feminist and Postcolonial Perspectives
Silvia Bauer and Tatjana Schönwälder-Kuntze 57
PART II GLOBALISATION, BUSINESS AND CORPORATE GOVERNANCE
5 Globalisation of Corporate Governance:
The Difficult Process of Bringing About European Union Internal and
External Corporate Governance Principles
Klaus J. Hopt 81
6 Transparency and Integrity: Contrary Concepts?
Frits Schipper 101
7 Tangible Ethics: Commitments in Business Organisations
Eberhard Schnebel and Margo A. Bienert 119
PART III GLOBAL JUSTICE
8 A Theory of Global Justice Focusing on Absolute Poverty
Elke Mack 145
Globalisation and Business Ethics
vi

Martin Kaluza, M.A., Department of Philosophy, Freie Universität Berlin,
Germany
Prof. Dr. Dr. h.c. Peter Koslowski, Professor of Philosophy, especially Philosophy
of Management and Organisations and History of Philosophy, Free University
Amsterdam, The Netherlands
PD Dr. Christoph Luetge, Chair for Philosophy and Economics, Ludwig-
Maximilians-Universität, München, Germany
Prof. Dr. Elke Mack, Institute for Christian Social Ethics, University of Erfurt,
Germany
Prof. Dr. Georg Marckmann, MPH, Institute for Ethics and History of Medicine,
University of Tübingen, Germany
Dr. Michael Neuner, Department of Business Studies and Economics, University of
Applied Sciences Ludwigshafen/Rhine, Germany
Globalisation and Business Ethics
viii
Prof. Dr. Manfred Prisching, Department of Sociology, University of Graz,
Austria
Dr. Frits Schipper, Department of Philosophy, Free University Amsterdam, The
Netherlands
Dr. Eberhard Schnebel, Württemberger Hypo Bank, Stuttgart, Germany
Dr. Tatjana Schönwälder-Kuntze, Chair for Philosophy and Economics, Ludwig-
Maximilians-Universität München, Germany
Matthis Synofzik, Institute for Ethics and History of Medicine, University of
Tübingen, Germany
Introduction
Karl Homann, Peter Koslowski and Christoph Luetge
We are confronted with the problems of globalisation daily. Globalisation has become
a common phenomenon, yet one that many people experience as a threat not only to
their economic existence, but also to their cultural and moral self-image. Some join
protest organisations like ATTAC and others. Their protests regularly lead to violence

of financial markets, which enables or dramatically facilitates direct investment
in foreign countries. A flood of mergers in the year 2000 is a good indicator both
Globalisation and Business Ethics
x
for the globalisation of financial investment as well as for the global integration of
structures of production.
This development is also accompanied by ecological dangers and increased
migration. Globally acting corporations often promote Western ideals and images
of consumption in marketing and distribution, and they are supported in this role
by the globally dominating position of Western mass media. Some authors regard
‘consumerism’ as the intrinsic Weltanschauung of the West, as its global ideology
which, in other parts of the world, breeds counter-ideologies like Islamism.
Globalisation of markets and production, in another regard, greatly diminishes
the efficiency of national politics, in particular, national economic and labour market
policy, as these markets are not nationally organised any more and can only to a
limited extent be controlled through national legislation and politics.
Globalisation also has normative and cultural dimensions. However, these
dimensions are often discussed quite independent from – or even in direct opposition
to – its economic dimensions. We have tried to avoid this fruitless split between
normative and economic considerations in the present book, by choosing authors
with competences in both domains.
The normative dimension of globalisation includes questions of the cultural self-
images of man, the consequences of accelerating processes of modernisation on
human identity, the increasing insecurity and the human capability to cope with it. It
also includes the problem of winners and losers of globalisation – and the question
how the winners might possibly compensate the losers for their losses or improve
their situation.
A final question is how philosophical ethics can contribute to the processes
described here. Can ethics set limits to global business, indeed, is this the task it has
to fulfil? Or can the processes of globalisation, at least in principle, also be thought

legislation on Corporate Governance, which already incorporates a number of ethical
aspects.
The next two chapters are concerned with ethical questions within corporations.
Frits Schipper takes a closer look at the relation of two central concepts in
management ethics: transparency and integrity. He shows that these two concepts
are not necessarily in opposition to each other, but can also be considered as
complementary.
Margo Bienert and Eberhard Schnebel analyse the role of commitments in large
corporations. They show how social values form an important part in the functioning
of multi-national enterprises. Bienert and Schnebel distinguish between different
types of communication that are used, and they cite practical examples for this.
The third section, ‘Global Justice,’ is concerned with ethical problems related to
developing countries. Here, the focus is not only on the relation between industrial
and developing countries, but also on the relation between developing countries and
multinational corporations.
The first chapter, by Elke Mack, aims at constructing an ethical theory that is
adequate for dealing with the problem of extreme poverty. She discusses theories of
justice by philosophers like Thomas Pogge and John Rawls as well as theological
approaches. Mack envisages different scenarios in which different means of poverty
reduction can be put to use, ranging from market interaction to transnational
structures of governance.
Like Mack, Bernhard Emunds discusses ethical aspects of the institutional
framework for international business. Emunds argues that international financial
markets could serve the ethical purpose of achieving greater justice between industrial
and developing countries, if certain institutional changes were made, especially in
the banking sector.
In the final chapter of this section, Georg Marckmann and Matthis Synofzik focus
on a particular detail of global justice that has been getting quite a lot of attention
in recent years. Marckmann and Synofzik explore strategies for providing people
in developing countries with essential medicines – both at fair prices and in a way

Chapter 1
Globalisation from a Business Ethics
Point of View
Karl Homann
It can be safely said that, despite all differences in detail, one important result of
the ongoing discussion about business ethics is that the framework of both formal
and informal rules is very important for the ethics of individual actors. The rules of
a society have great impact on its members’ behaviour. However, it is still a very
controversial question how actors can be led to act in moral ways under conditions
of competition.
The first part of this chapter will give an overview of the challenges that
globalisation holds for the framework and for the implementation of ethical norms.
The second part will deal with the role of corporations in the development of a
framework of governance for the global society. The third part discusses the question
of implementation of ethical norms.
The Problem Situation
Globalisation must now be regarded as a fact. But for business ethics, this fact poses
a severe problem: a legal framework that would be able to govern the interactions
within the global society in both an efficient and ethical way is only beginning to be
developed. At best, first steps to this can be made out, namely the UN Charter, the
World Trade Organization (WTO), the International Labour Organization (ILO), the
International Chamber of Commerce (ICC), the Kyoto Protocol and others. In many
parts of the earth, even these first steps have yet to be acknowledged or accepted.
At the same time, competition is becoming more and more intense. How can
individuals act ethically under these conditions? It is beyond dispute that the social
framework or social order is important for acting ethically, yet this question can
be rephrased under conditions of globalisation in the following way: Who is going
to develop the social framework for the global society? The nation states and their
organisations of cooperation are mainly hindered by the fact that these states compete
against each other, e.g., for investment and for the masterminds. Thus, the problem

3
New players enter into this vacuum. The two most important are non-governmental
organisations (NGOs) and multinational corporations (MNCs). This chapter will
focus on the role of corporations in designing the new social order for the global
society. Which are the factors that force the MNCs – explicitly, in part, but in any
case implicitly – into a political role?
With his ‘Global Compact’ initiative, UN Secretary General Kofi Annan has
called on the MNCs to cooperate in the realisation and promotion of human rights,
better working conditions and protection of the environment: It is clear that for Kofi
Annan the community of nation states cannot do these jobs on their own. Thus he
implicitly recognises the competence of corporations for efficient governing global
processes of coordination. And he implicitly recognises too that to initiate a good
development, it is futile to accuse MNCs of ‘only’ maximising shareholder value.
By contrast, the three big players, governments, NGOs and MNCs, even today
continue to each define themselves mostly in opposition to the other two, and the
resulting self-perception leads them to act accordingly. But currently, the MNCs are
probably the only ones to have the resources necessary to integrate those four billion
people into the global society that are more or less still excluded today. Development
aid provided by government and administration has, to a large extent, failed. The
industrialised countries come nowhere near the promised 0.7% of the GNP for
development aid, and their financial situation is not improving.
2 Cf. Patzig (1986/94, 1996); Förster (1992).
3 Cf. Luhmann (1997).
Globalisation from a Business Ethics Point of View
5
However, the MNCs still hesitate or even refuse to accept their new political role.
From experience, I can speak of four reasons:
The call to take on political responsibility is often phrased in a semantics
that forces MNCs into the role of opponents. ‘Sacrifices’ and ‘taming of
capitalism’ are called for. But corporations cannot make sacrifices, and

order of global society. But why should they accept this task, which is laden with
so many difficulties? Maybe they should rather resist this task, because it has to be
fulfilled by other actors?
The Question of Implementation
In philosophy there have, since Greek antiquity, always been two paradigmatic
answers to the question of how to implement normative claims: Insight and interests.
1.
2.
3.
4.
Globalisation and Business Ethics
6
Both these answers recur in the ethical discussion about globalisation, mostly in
certain mixtures, but sometimes also in ‘pure’ form:
If insight is to be the key to implementation, this can be called a cognitivist
position, broadly speaking. This view has been held by Plato and Kant, and in
contemporary theory by J. Rawls, J. Habermas, H. Jonas – and, with regard
to globalisation, by Höffe (1999). In Höffe’s argument, this view recurs with
exceptional clarity:
For Höffe, human beings enter society with certain fundamental, pre-
social rights, i.e. human rights. Human rights need to be guaranteed by the
state with its monopoly on the use of force. In a second step, the state is
characterised as a ‘qualified democracy,’ which implies social policy. As the
problems on the level of global society retain the same structure as those
within the nation state, i.e. a prisoners’ dilemma structure, a ‘global state’
(‘Weltstaat’) must be erected. This global state has – in Höffe’s words – to be
so powerful as to be able to stand up to multinational corporations and their
strategic alliances as well as against the national interests of great powers,
even superpowers.
4

2.
Globalisation from a Business Ethics Point of View
7
Their interests face up to scarce resources, and they conflict many times, of
course. But still, actors also share common interests: They are interested in a
social order. This problem can be modelled as a dilemma structure which can
only be resolved by establishing a social order. This is the classic argument
of social contract theory from Hobbes to Buchanan, which refrains from
formulating normative prerequisites for a social order. Rather, social contract
theory analyses the systematic conditions for complying with rules, and these
conditions can only be non-normative, individual expectations of advantages
and benefits. In other words: the process of choosing rules for global society
cannot be seen within a framework of a) how to comply with rules, and
especially not of b) pre-established norms, as those cognitivist approaches
try.
But why might corporations be interested – or develop an interest in – the shaping
of a social order for global society?
Corporations cannot be expected to make ‘sacrifices,’ but they can invest – in real
or human capital, but also in the social order as a prerequisite of long-run benefit.
At the moment, the lack of an adequate social order for global society still keeps
two-thirds of humanity, four billion people, outside of productive interactions. An
economist regards these four billion people as assets, as factors which can bring
about wealth and prosperity, if conditions are set adequately. At the moment, these
four billion people are regarded rather as a threat to the prosperity of the industrial
nations. This way of thinking is clearly based in a zero sum paradigm, and it
leads to political reactions which eventually make those people threats. It is in the
corporations’ vital interest to develop this potential, not by making ‘sacrifices,’ but
by investing in the fundamental conditions of sustainable profits: the social order.
This is a mutually beneficial activity, for the ‘poor’ as well as for the ‘rich,’ thus also
for the corporations themselves.

This ‘must’ might be misinterpreted: However, it is not a moral ‘must,’ but a
‘must’ derived from the sustainable, long-run interests of the three players. For
all three, there are incentives for changing their perspectives. Indeed, it is highly
welcome to see that all three players currently are loosening their sometimes radical
opposition against the other two. After all, they all share a common interest in the
social order, and they are increasingly becoming aware of this. The 11 September
2001 has made it clear what costs the lack of a widely accepted, ‘just’ order entails.
Voluntary measures might also change the attitude of critics. There are many
critics who regard the corporations’ political engagement as a threat to the political
culture, even as an official legitimisation of lobbying. They fear that the fox is put
in charge of the henhouse, so that successful lobbyists can enforce their individual
interests by government measures. But in networks based on voluntary cooperation,
the sovereign force is left out. Networks are built on a principle of consensus.
Consequently, the vital and justifiable interests of others will be taken into account,
not by way of morals or of individual actors’ personal properties, but by the structure
in which these processes are organised.
6
Final Remarks
Every morality needs to be based in interests, even for Kant. And every morality had
such a basis as long as it was effective. I have no objections if, in certain contexts,
morals become independent of this basis, such as during the process of education
or in ethical theories. But if morals are turned against interests and are charged
with taming them, then morals are turned against their own basis and consequently
destroy themselves. Morals are made for man, not man for morals.
References
Apel, K O. (2001), Diskursethik als Ethik der Mit-Verantwortung vor den Sachzwängen
der Politik, des Rechts und der Marktwirtschaft, in K O. Apel and H. Burckhart
(eds.), Prinzip Mitverantwortung. Grundlage für Ethik und PädagogikPrinzip
Mitverantwortung. Grundlage für Ethik und Pädagogik eds Apel, K O. and
Burckhart, H., (Würzburg: Königshausen und Neumann), 69–95.

1
order
of an integrated world market has reached a critical phase. The failure of the World
Trade Organization (WTO) to come to an agreement in the Cancún round in 2003
has thwarted the institutional integration of world markets.
Established economic theories maintain that the process of globalisation gives
rise to advantages for all parties. However, these approaches often do not sufficiently
consider the institutional prerequisites for the achievement of such a result. With
our contribution we attempt to highlight the institutional conditions for a global
governance structure which helps to generate the win-win potential promised by
economic theory.
Efforts to establish a global governance structure date back to the first monetary
and financial market conference of the UNO in 1944 in Bretton Woods. One
consequence was the foundation of organisations able to take action on a global scale
(like the World Bank and the International Monetary Fund) as well as the agreement
on a set of world wide institutions. This post-war order was initially erected on the
building blocks of a free trade regime among nations complemented by a welfare
state within the respective nations, which was intended to manage the social costs of
globalisation (Kapstein, 1999, p.94). It is important to realise that first the Bretton-
Woods order was created by developed nations and designed to their needs, and
second the aim was stability and the avoidance of depression, not the management
of globalised relationships between developed and developing countries.
2
1 We make a distinction between ‘institutions’ in the sense of rules and organisations.
See North (1990, p.3).
2 Milner (2005, p.836) points out that all of the Bretton Woods organisations and
institutions ‘were created by the victors in World War II and were intended to help them to
avoid another global depression. (…) They were designed to help the developed countries
create a cooperative and stable world economy in a non-globalized world’.
Globalisation and Business Ethics

trade. By participating in the world trade, a nation can focus on the production of
those goods which it can produce at the comparatively lowest costs (Samuelson
and Nordhaus, 1989, pp.898–910). Therefore, trade enables a nation to concentrate
on those branches of the economy where it is more efficient than others. This is
enabled by buying those products on the international market with respect to which
the nation has relative cost disadvantages.
The argument above is based on opportunity costs. It has been enhanced by
the new trade theory by integrating a value dimension. Specialisation gives rise to
the development of ‘core competencies’ which can be translated into productivity
advantages when used in world trade. Because of specialisation on particular
branches of industry, nations can gain from positive external effects (Krugman,
1993). German manufacturers of investment goods, e.g., could establish themselves
3 This is no one-sided process, but a complementary one with respect to the developed
countries. The expressions ‘developed countries’ and ‘developing countries’ designate relative
positions which leave room for development for both groups of countries.