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It is therefore important to come up with solutions to Multinational ethical dilemmas. Free resources to assist you with your university studies! So, men are holding more management positions than women. ETHICAL ISSUES IN MULTINATIONAL CORPORATIONS Introduction A multinational is defined as an enterprise operating in several countries but managed from its home country. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Not neglecting trade organisations such as United Nations as well as international agreement between companies. How can Multinationals perform in an ethical and socially responsible way? What is the duty of the multinational organisations in the countries businesses are located or situated? The “perfect” code, to be applicable to any business and in any country or culture, should consider ethical, cultural, and managerial issues. Corruption scandals that sometimes make headline news in Western media can often be worse in developing countries. Ethical relativism means that doing business in a country by following strictly to its culture or ethics for example if bribery is a culture or ethics of doing business in a specific host country then in order to survive the multinational companies have to follow the local culture or ethics for example if a company wants to do business in a Muslim entry then the business they do must be hall. They are trying seriously to prove that they are a green organisation as when strawberries are purchased from Wal-Mart, they are despatched in plastic packages. Multinational organisations undergo a dynamic and complex global market, where right and wrong could be interpreted as widely different (Donaldson 1985, 1989). Study for free with our range of university lectures! The difficulty with any code of ethics, whether organizational or international, is enforcement. In fact, there are over 70 percent of women working at Wal-Mart, but only a small amount of those women are managers. The concept of ethics to business decisions encompasses all aspects of business management and operations in a business organisation. Procedurally, to be useful, an ethics code needs to meet certain minimal standards of construction. There has been an example of women who has been deprived of promotion and training opportunities that have been put forward to men. Multinational corporations (MNCs) have provoked considerable debate about the issues of "efficiency" and "social justice." Globalization, Multinational Corporations, and Corruption. The boost of world trade in the midst of global partners and the rise of foreign direct investment mandate that everyone works in the direction of a better understanding and a regular ground of precepts upon which to base choices can help promote and advance a number of businesses and social contacts worldwide. In: McDonald F., Tüselmann H., Wheeler C. (eds) International Business. The increased presence of MNCs in the International Political Economy has led to the startling reality that companies can be political entities and their influence as political actors can be sizeable, both in positive and negative capacities. Apart from protecting the image of the company, it is a multinational organisation and so should live up to standard and expectation. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. If you continue browsing the site, you agree to the use of cookies on this website. Women have also allegedly been underpaid than men. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Ethics is one of those terms when mentions, a lot of things come to mind so as a result, Ethics could be define in various ways. PBS states that the open door policy operated by the Wal-Mart management does little or nothing to help employees in a difficult situation. Ethical relativism means that doing business in a country by following strictly to its culture or ethics for example if bribery is a culture or ethics of doing business in a specific host country then in order to survive the multinational companies have to follow the local culture or ethics for example if a company wants to do business in a muslim country then the business they do must be halal. Every company has got problems and the companies that thrive are usually organisations that detect ethical problems early enough and create a solution for them. 12-hour workdays, minimal pay, and indifference in protecting workers from toxic chemicals are common in some developing nations. On the contrary, the positive ethical practices of an organisation are highly important (Etzioni, 1988 Kotter and Heskett, 1992) this would normally boost the image of such an organisation as they tend to have an edge over others in a very competitive market. MNE in India. As part of our 25th Birthday celebrations Ethical Consumer asked its readers to vote for who they thought was the least ethical company over the last 25 years.. Nestlé 'won' with 15% of the vote, finishing just above Monsanto (14%) and the UK's number one tax avoider Amazon (12%). Reference this. Raiborn and Payne developed a model code of ethics that, at the time, was not specifically envisioned as being applicable for nondomestic as well as domestic operations. Do you have a 2:1 degree or higher? Business ethics is the study and evaluation of decision-making by … SO “in February 2004, a federal judge ruled that Wal-Mart should pay workers for overtime hours” (Hoover’s Handbook) the case was pending for a while but then Wal-Mart then maintained their policy was against such work, hence, managers who were involved in such atrocity were punished by getting fired. Looking for a flexible role? Wal-Mart has been accused of being very selfish as the organisation has claimed that they were worried that they would have more than enough product for customers in the future but it was discovered that it was for their own bias interest as they claimed it was something they did as company’s obligation. Multinational companies are sometimes faced with issues that tend to present challenge to them between balancing their interest in profit-making and expectations and interests … Do not automatically assume the worst behavior and insult the actors by addressing them only with a sense of “don’t do this; don’t do that.” Lastly, as indicated by Ferrell and Fraedrich (1994), the code should help the MNC achieve its objectives while benefitting the countries in which production facilities are located or products/services are sold. These organisations must be aware of and must conform to the host country’s domestic laws. Actually, “Wal-Mart recently introduced workplace diversity initiatives, intended to prevent further gender bias.”( usgovinfo.about.com). However, by acknowledging that the lowest end of the continuum is adherence to the letter of the law, MNCs would agree to accept a defined minimal ethical stance. The requirements in these areas consist of (but are not restricted to) providing local, raw materials, equity participation, preferential treatment to local sources. Wal-Marts policy states that every employee should be paid for every mined worked for, so they have actually bridged a statement of policy they made. A company operating in the international business arena is subject to a multiplicity of ethics codes. Differences would probably be most pronounced between operations in developed and developing countries as well as being dependent on the degree of power the. Multinational organisations must realize that, the culture of an organisation could have an effect on the behaviour of an employee within an organisation. For our purposes, companies must address issues in at least two of these categories to be considered to be engaging in CSR. (www.usatoday.com), In January 2004, The New York Times reported on an internal Wal-Mart audit conducted in July 2000, which examined one week’s time-clock records for roughly, 25,000 employees. For instance, Wal-Mart, the largest buyer of fish worldwide depending on the species, now retails ten fish products with the blue MSC label, including and Pollock and wild salmon. Wal-Mart is an organisation that should take sole responsibility of their ethical status. For Wal-Mart to survive, they would have to prove that they care about their employees by treating every employee ethically right, this would help control and probably stop the criticism and encourage even more customers globally. They have noticed that by selling trash that has been recycled, millions could be saved, costs wise like transportation costs etc (www.usatoday.com) Wal-Mart is said to be fully promoting the group of companies that want to trade carbon dioxide credits. 17th Sep 2020 Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. The end result should be to aid trade and enhance in profit and a make standard of living better. Labour Union Opposition: Wal-Mart is an organisation without unions. As suggested by the Theory Y management style, treat the actors as though they naturally would do the right thing. It is believed to be largest company in the United States of America. Additionally, codes should be positive in tone. The main argument of the survey is the fact that in the scientific approaches 1) Some Ethical Issues Confronting MNCs Child and/or Forced Labor Safety and Security Concerns Duration of Work Week 2. 1) Some Ethical Issues Confronting MNCs Child and/or Forced Labor Safety and Security ConcernsDuration of Work Week. Ethical Issues in MNCs. and Values IAp a military ethical climate and discuss strategies to mniplfment the elements. It is wise to handle all issues in an ethical manner. Discriminating between gender, disabilities age and sex. There should be a vast opening for fair employee opportunities in training and promotion, timely payment of salaries and a decent working environment. Or is it strictly businesses that would benefit the organisation alone? From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. According to Hill (2014) a multinational corporation (MNC) can be defined as a firm that engages in foreign direct investment (FDI). Wal-Mart has created fourteen maintainable value networks made up of suppliers’ employees and environmentalists. In a business organisation, investors should always get their moneys on time. (Holtzapple and Recce 2003) they defined ethics as “The general and abstract concepts of right and wrong behaviour were derived from philosophy, theology, and professional societies.”In the same way, (Martin and Sherry, 2000) in their terms say ethics means moral principles through ethical, cultural and religious irrespective of the situation or circumstance. 1. Wal-Marts vice president for communications responded that company auditors had, determined that the methodology used was flawed, and the company “did not respond to it in any way internally.”. But sometimes there is a … Is it fine for a multinational to fall prey to the same practice w… Global corporations must recognize the need for a uniform code of business ethics for protecting their citizens, their national interests, and the global environment. Ethics as a philosophy is defined as the discipline concerned with what is morally good and bad, right and wrong. Ethical issues may be related to employment practices in many nations. Getz suggests that control of the host is the basic right that must be recognized and respected by the MNC. The results of our readers poll for the least ethical companies. MNC wields in a given locale. Now customize the name of a clipboard to store your clips. The theoretical standard of behavior reflects the highest potential for good, reflecting the spirit of morality. Ethical Issues Associated With Multinational Corporations and other kinds of academic papers in our essays database at Many Essays. Organization of MNE. Matt Kistler, vice president of product and packaging innovation says they were working differently from the way they used to as a company. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Arise when a manager makes decisions consistent with differing national environments Political systems Legal systems Economic development levels Culture What is ethical and normal in one environment may not be so in another February 20, 2016. History and Evolution of MNE MNE Structure. In the area of environmental protection, MNCs should collaborate with the host country in producing and increasing national and international environmental security standards, as well as notifying the host of any possible environmental impact of the goods manufactured, services executed, and/or processes made use of. 2003 Multinational Corporations and Global Responsibility 969 cally. It cannot be expected that all multinational corporations would have the same standard of behavior for each of the issues nor that a single MNC would have the same standard of behaviour in different locales. . Justice reflects impartiality, sound reason, correctness, conscientiousness, and good faith. No plagiarism, guaranteed! an organisational culture could affect the behaviour of employees in an organisation. As a result, employees who cannot pay for their health insurance have to rely on the government i.e. the money offs are usually not enough. the state or their spouses from their tax. This is an unethical practice that Wal-Mart has been accused of getting away with. There are procedural and substantive aspects of building such a code. these charges were denied by Wal-Mart denied. ETHICAL ISSUES IN MULTINATIONAL CORPORATIONS Introduction A multinational is defined as an enterprise operating in several countries but managed from its home country. All work is written to order. Ethical Values and Business Ethics in Multinational Companies in India in Context of Globalization: An Empirical Study Hardeep Singh1+ and Bikram Pal Singh 2 1 Ferozepur College of Engineering and Technology (FCET), Ferozepur (Punjab) INDIA 2 Global Institutes, Amritsar (Punjab) INDIA Abstract. … Encouraging ethical behaviour in multinational corporations. Information personal to customers should be kept sacred and not be used for personal gain. The Multinational organisation that would be discussed in the course of this essay would be Wal-Mart. Resistance to investigation as well as lack of transparency. There is always the question of what the ultimate structure of an organisation would be, this is vital as it would help aid the smooth running in the production of goods and services. This is not an example of the work produced by our Essay Writing Service. Brooks (1989) showed that a Canadian corporation might be affected by a total of twelve codes of ethics, all of which exist within the legal environment. Wal- Mart failed to offer equal employment opportunity to women, even though there are more than seventy percent of women working at Wal-Mart, only a few of these women are mangers, as a result the men are on the frontline within the company. How should they, and society, respond to these issues? These standards are combined with four values (integrity, justice, competence, and utility) that should be considered core, regardless of the society in which the MNC operates. Cite this chapter as: Dhanarajan S. (2002) Multinational Companies and Ethical Issues. Government Rules and regulations in regards to duties, taxes restrictive and monopolistic trade practices and unlawful activities like bribing and corruption should be adhered to. 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