ETHICAL BEHAVIOUR AND INTERNATIONAL BUSINESS

1. What does the statement “all capitalism is crony capitalism” is referring to? Do you agree with this statement or not? Give an example.

To identify what the statement “all capitalism is crony capitalism” we first have to understand the word crony. The Merriam-Webster online dictionary defines it as “a close friend especially from long lasting”. When stating that “all capitalism is crony capitalism” the legendary Indian reformer that said so was describing the Indian capitalism as one that benefits those long lasting friends and implies favoritism; in other words, corruption. In this way, I believe this is true in modern capitalism as independent wealth is the main goal and one has on the side only those who regardless of sharing my ideas are willing to support my ways, without considering other elements such as abilities.  

An example of this is the concentration of wealth perceived in modern economies and the widening gap between rich and poor as the concentration of wealth is a result of stronger and narrower relations between the powerful institutions of society such as media, the government and corporations. Crony capitalism can be described as the kind of capitalism that is regulated by the strategic alliance of powerful institutions to dominate the market and take advantage of their shared resources to control aspects such as the publication of news when a company is involved in a conflictive situation.

2. What is a Banana Republic? Why the author is comparing India with a Banana Republic?

A Banana Republic is a country that works under cronyism. Cronyism, as defined by the Merriam-Webster online dictionary, is “partiality to cronies especially as evidenced in the appointment of political hangers-on to office without regard to their qualifications”. In this order of ideas, a Banana Republic is corrupted, it’s a country in which power is delegated to people based on favoritism and not on people’s knowledge and abilities. Under a crony capitalist economic regime, the people that are in the powerful lane delegate power only to those friends from whom they can benefit; being on the right end of the banana.

The author compares India with a Banana Republic because of the consolidation of corporate power that has been occurring during the last 20 years in independent India with the media on the right end of the banana because of its incredible power to influence the market, to the point that the dominant media is now corporate and big businesses ranging in industries beyond their own and with incredible margins of profit.  

3. Why is it problematic that in the business world “The Media” becomes a corporation?

The problem with media becoming a corporation is that the objectivity of the reports and their credibility is lost as they control how the news is told.  In this way, the honesty of journalist is almost lost as they can be influenced on how to tell the story and journalist who are honest find it hard to work in the complex media- corporate business field. The quality of the job of the media stumbles as sources are not taken care of and ethical standards let a lot to wish for. The interests of the media shifts from a veridical source of information to monetary benefits and growth and in this way the liberty of press is questioned as the media becomes a source of corporate control.

4. In this situation, what behaviors are considered unethical for corporations, journalist and the state?

What is considered unethical for corporations, journalists and the state is to merge strategically in order to take advantage of each other’s power and influence in the market. While doing this, they jeopardize the credibility of the media and the liberty of press. By merging, corporations have the access to control what is published about them in the media and have influence in the political arena, leading to corruption. Corporations are not supposed to use unethical competition techniques in the market like controlling the media, journalists are supposed to be honest and tell the stories as they are and not let themselves be corrupted by power, and the state is supposed to be the guardian and its agents may not use their political influence and power to benefit from any business opportunity regardless of its effects on society.

5. What can The Media, Corporations and the States do in order to behave ethically and in the benefit of the people and not their own interest? Give at least 5 good ideas.

      - Corporations should develop a strong Public Relations department to deal with any eventuality that may arise in a legal, structured and ethical way.

<!   - The state should prohibit media-corporate mergers and reinforce the controls on unfair competition.

 

<!   - Implement legal control on state agents so that they won’t benefit from business opportunities because of their political power and influence.

<!   - The media is to remain independent in order to assure transparency, honesty and veridical information.

<!    - The media should implement rigorous controls to guarantee trustworthy sources and transparency of the information, as well as establish severe sanctions (firing) to those journalists who, as the document says, choose to become stenographers.