(dictionary.com). Given these fundamental standards, a code of ethics should address the following five major issues, consolidated from the various international codes previously discussed organizational relations (including competition, strategic alliances, and local sourcing), economic relations (including financing, taxation, transfer prices, local reinvestment, equity participation, and fiscal policies), employee relations (including compensation, safety, human rights, non-discrimination, collective bargaining, whistleblowing, training, and sexual harassment), customer relations (including pricing, quality, and advertising), industrial relations (including technology transfer, research and development, infrastructure development, an organizational stability/longevity), and political relations (including legal compliance, bribery and other corrupt activities, subsidies, tax incentives, environmental protection, and political involvement). Organisations that have made a cautious effort to be truly ethical must evaluate and measure the rules and regulations governing the countries in which businesses are carried out. It is believed to be largest company in the United States of America. 17th Sep 2020 Utility indicates the quality of being useful and, philosophically, providing the greatest good for the greatest number (or the least harm for the greatest number) (Raiborn and Payne, 1990). the state or their spouses from their tax. Many may suggest that pay and work conditions need to be similar across nations, but no one actually cares about the quantum of this divergence. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Wal-Mart is an organisation that should take sole responsibility of their ethical status. Are they demonstrating a sense of social responsibility? Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. It is wise to handle all issues in an ethical manner. Moving things from one location to the other would be the least of its problems. Encouraging ethical behaviour in multinational corporations. Looking for a flexible role? ETHICAL ISSUES IN MULTINATIONAL CORPORATIONS Introduction A multinational is defined as an enterprise operating in several countries but managed from its home country. It should be: clear and understandable to the average person; comprehensive in indicating the extent of its provisions; and enforceable by specifying the ramifications of improper actions (Raiborn and Payne, 1990). Study for free with our range of university lectures! No public clipboards found for this slide. There is always a tendency for ethical issues to arise in a global market and multinational organisations are no exceptions. The practical standard represents an extreme diligence toward moral behavior. Globalization, Multinational Corporations, and Corruption. Corruption scandals that sometimes make headline news in Western media can often be worse in developing countries. Multinational Corporations (MNCs), have raised questions about the role of business in global governance. Multinational organisations undergo a dynamic and complex global market, where right and wrong could be interpreted as widely different (Donaldson 1985, 1989). If you need assistance with writing your essay, our professional essay writing service is here to help! Ethical Issues in MNCs. Ethical Issues Associated with Multinational Corporations Navigating the boundaries between right and wrong can prove tricky for companies that operate in several nations and across cultures. The requirements in these areas consist of (but are not restricted to) providing local, raw materials, equity participation, preferential treatment to local sources. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. OVERVIEW What is MNE? Using Kohls and Buller’s continuum concept, the four specified and named levels of behavior are merely points of a continuous whole as shown in Figure 1. Also the company need to manage its employees in a rather decent way in other to avoid law suits from them as well. Meanwhile they need to develop and enforce their own codes of ethics specifically directed at the issues related to a multicultural, multinational business environment. Discriminating between gender, disabilities age and sex. Euro). The results of our readers poll for the least ethical companies. The end result should be to aid trade and enhance in profit and a make standard of living better. With regard to technology. MNCS should avoid interfering with improper political activities, intergovernmental issues nor pay bribes to public servants. If the country is a developing country, it could be helpful if some research is carried out by the host country and it would save a lot of costs as well if local personnel are and local resources to every reasonable extent. Management Some people think itâ s better to be unethical Other people donâ t know how to make sense of their ethical choices. There is always a tendency for ethical issues to arise in a global market and multinational organisations are no exceptions. MNC should also endorse a non-discriminatory employment policy, provide sufficient training for local employees, value workers’ rights to organize for collective bargaining, discuss with with workers’ representatives on labour matters, and have an objective of stable employment. Special Ethical Issues Facing Multinational Corporations: Appropriate Responses. “Wal-Mart is the nation’s largest employer of women, but unfortunately they are being treated without dignity and respect.” (www.arkansasnews.com) discrimination is definitely a big problem in Wal- Mart. Acting in accordance with ethical and cultural values is crucial for a multinational company to win clients’ support and business and to achieve a competitive advantage in a particular market. There are procedural and substantive aspects of building such a code. Free resources to assist you with your university studies! They have created a policy that states that the less packaged as these could be recycled and also could save more. The MNC is not above the regulations, laws and jurisdiction of the host and should use suitable international disagreement resolution mechanisms when necessary. Companies may buy products from factories employing children.Eg. The paper "Legal and Ethical Issues Affecting Multinational Corporations in East Asia" states that emergence of East Asia as a centre for international trade establishes the region as a centre of interest for multinational corporations and the organizations’ need to understand trends. Such issues include transfer, promotions, employment of new staff, the environment and labour issues. Our academic experts are ready and waiting to assist with any writing project you may have. 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. The model code envisioned four specified standards (derived from a set of standards developed in accounting) of behavior in four areas of values. You can view samples of our professional work here. code of ethics at selected branches and representative offices of multinational companies. 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. Looks like you’ve clipped this slide to already. Wal-Mart claims that in a bid to keep operating costs down, employees’ wages can only be so much. (www.brainyquote.com) Authors from different parts of the world have also defined ethics in a lot of different ways. Cite this chapter as: Dhanarajan S. (2002) Multinational Companies and Ethical Issues. There were 60,767 missed breaks and 15,705 lost meal times. How can Multinationals perform in an ethical and socially responsible way? 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. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Getz (1990) classified Multinational organisations into three categories: Multinationals must think about its responsibilities in relation to a number of other things such as political engagements, regulations and laws, developmental and economic policies. , “Wal-Mart’s ultimate defence is that it offers lower prices and somehow that justifies all sins.” (www.usatoday.com) .Wal-Mart also has got an expensive health insurance care and again Wal-Mart employees cannot manage to pay for its health insurance. The paper explores the ethical issues which multinational companies are fronting when doing business abroad. 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. 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