Introduction The conduct of MNEs in international business depends hugely on how they ensure that, they observe business ethics that reflect the globally accepted principles of right or wrong. In this context, MNEs are thus expected to come up with ethical strategies which guide their course of action in the international business so that their operations do not violate such accepted principles. Nonetheless, a number of ethical issues and dilemmas in international business do manifest, consequently placing many MNEs in extremely difficult positions. Such ethical issues and dilemmas have often been attributed to the diverse political systems, economic situations, regulations, as well as cultures that exist from nation to nation (Tricker & Tricker, 2014). Examples on some of the most common ethical issues and dilemmas in international business include but not limited to the following: Improper employment practices Corruption and bribery Immoral behavior by managers Human rights Corporate social responsibility of multinational corporations Environmental regulations In most attempts of regulating the behavior of MNEs, different public policy regulation strategies are adopted using a couple of frameworks (Kline, 2005). Key among these frameworks includes the one on ethical framework. Body When MNEs operate in international business they encounter diverse political systems, economic situations, regulations, as well as cultures that exist from nation to nation. Ethical issues and dilemmas become entangled in various legal options that the MNEs have to fulfill. Equally, local customs plus the established norms add another layer of complexity to the already souring question of how to act both legally, as well as ethically in an unfamiliar... ... middle of paper ... ...ught to inform themselves sufficiently with the information relating to public policy regulation present in the different nations that they will operate in. Armed with such information, the managers ought to integrate the knowledge on these differences as their guiding rationale towards behaving ethically in every given culture. While failure to pay attention to such differences could result in a number of legal and reputational concerns, paying appropriate attention to them can immensely enhance corporate performance. Consequently, the paper contends that MNCs ought to focus on embracing ethical behavior in their operations irrespective of the nations that they operative in. In doing so, such actions will not only make them to be compliant with regulations in the respective country, but also it will provide them with an excellent image to their prospective clients.
Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2009). Business ethics: Ethical decision making and cases (7th ed.). South-Western College Pub;
When travelling for business between different countries it’s very important to understand the different ethical practices. When looking into the different ethical business practices in organizations we will look at the four largest and fastest developing countries which are commonly known as BRIC; Brazil, Russia, India, and China. There are many similarities between these countries; however India and Brazil seem to have a more favorable ethics rating than China and Russia. While there are similar perceptions on ethical business practices, these ideas are not shared globally. As these four countries grow economically, it’s becoming more important for business leaders to understand their ethical differences.
Bohlman, H. M. (2005). The Legal Ethical and International Environment of Business. Thomson South Western .
Economic activity always has an ethical aspect. No matter what type of business is taking place there is always an aspect of ethics. A business transaction occurs when people exchange a product or service for money. If the exchange is fair then both parties benefit and therefore both parties’ interests are served. Therefore this interaction between parti...
These include following the firm’s own values to the latter, adopting the host country’s values and business practices and abandoning operations in the host country. Organizations should endeavor to integrate their ethical values and business operation practices with universal ethical principles as well as with local cultural norms and business practices for success, (Hamilton, Knouse & Hill, 2008). Firms have a responsibility to respect the host country’s cultural legitimacy for following particular business practices. Firms that adapt their business practices to those of the host culture are likely to encounter low costs of introducing new practices, (Hamilton, Knouse & Hill, 2008). Moreover, incorporating host country values is a source of leverage to the firm since respect of local ethical values and practices enhance the reputation of the firm as one that respects, values and promotes the welfare of the local society and its values and cultural norms, (Hill et al. 2006).
There are many questions surrounding the moral responsibility on corporations, but how can a resolution be reached. In the case study for Timothy & Thomas North America, three models of ethical standards will be cited. From the Stakeholders article, decision-making guidelines will need to be understood for Jonathan Stein, the new Vice President (VP) of International Contracts to have a clear vision of
Business ethics simply can be defined as the application of business values in the business practice of a company (Seawell 2010, p. 2). For a multinational company, business ethics is one of the critical aspects need to be taken into account in business decision-making processes. Failure to give attention on ethics may bring consequences on company’s reputation (Meyer & Jebe 2010, p. 159). The company is expected not only to pursue its own profits but also contributing to the environmental and social welfare of the community where it operates (Svensson & Wood 2008, p. 308).
As the world trends towards a more globalized marketplace, the need for a universal definition of suitable ethical standards and corporate social responsibility is imperative due to the recent upsurge in global welfare issues. If successful, every facet of the business and supply chain would concentrate on not only the maximization of wealth, but the well-being of all stakeholders. However, many multinational corporations (MNCs) are encountering human rights issues resulting from unethical actions from overseas suppliers that conflict with their own code of conduct. These adverse engagements have been shown to cause significant damage and guilt by association to MNCs even though they are not directly overseeing
Ethics refer to a set of values that are applied to the moral decisions and implications that emerge in the business environment. Consequently, these implications are considered to be important for internal, external stakeholders, and the natural environment. Thus, every business is required to abide by a code of ethics, which governs the behaviour and actions of an organization. Alongside with ethics, globalization is a process that enforces integration and interaction among a wide range of individuals and organizations, on an international level. Moreover, the utilization of ethics and globalization is regarded to be quite significant, specifically while devising marketing strategies; as applying such concepts to one’s business can give it
In conclusion, companies that seek to integrate into global markets usually encounter several problems because of the effect of globalization on business practices. The challenges originating from such integration is attributed to the differences in cultures in various societies across the globe. As evident in Google’s dilemma in China, there is no single set of universal ethics that are applicable to all settings and societies across the globe. Companies such as Google need to develop varying ethical standards that are relevant and appropriate to various nations and cultures in the world. This would enable the companies that are integrating into global markets to avoid ethical issues while maintaining effective business practices.
Understanding that the needs of one country differs from what you countries consist of addressing and taking a look at organizations who are MCNs, such as Walt Disney, their goal is to purse prospective consumers around the world and meet their wants in order to gain a profit. In addition, they need to implement the right decision making tools to send their employees overseas and a strategy as to how they will market their products ethically and legally in that particular country. According to the article, “Values in Tension: Ethics Away from Home, ” the author talks about how companies can work through ethical barriers without breaking laws within their own country. The article goes on to say that when we are dealing with countries that have a different set of standards of ethical behavior and various ways of handling unethical behaviors. It is important to understand how to operate within that countries ethics and being knowledgeable of the attitudes towards ethics. Therefore, it would not be considered a wise act to allow the other countries ethics to take precedence nor the host country, we have to remember that in some countries are focused on the consensus rather than the code of ethics. The article also, provides key information as far as balancing and provide three guiding principle within its “Balancing the Extremes: Three Guiding Principles,”
Arnold, D. G. (2013). Global justice and international business. Business Ethics Quarterly, 23(1), 125-143. doi:10.5840/beq20132315
In the business world there are many fundamental aspects and situations that can lead to several issues. In order to find an optimal and professional solution, business decision makers need to apply moral and ethical standards. And it is at that moment in which business ethics perform its role. Business ethics, which is in charge of examine how companies and individuals should act in business situations, is very essential in order to reach a common agreement and to work within the laws of business and solve an arisen dilemma. Working of the hand of ethical business companies, employees, investors, directors, and even individual officers can be beneficiated and obtain most favorable outcomes.
There are a number of issues that affect international business ethics. They include employment practices, human rights, environmental regulations, corruption, and moral obligation of multinational companies. Employment practice refers to the working conditions an employee must work under. This can be very difficult to gauge, because many times the working conditions of a host nation are inferior to those in an organizations home nation. Many organizations have had to fight with these regulations. A good example of this in the trouble Nike found themselves in during the 1990s. There were a number of news reports released about the working conditions of most of its subcontractors were very poor . The Nike Company was not breaking any laws but it did bring into question the ethics of using a sweatshop. After this incident it left a number of questions for the international marketplace. In recent years many companies have cut ties with organizations that use unsafe and unfair labor practice.
Large corporations have been attempting to find a balance between the traditional hierarchical structure and the flexible local entrepreneurial structure for many years. Increasing global competition has made it critical that multinational enterprises be both globally integrated and locally responsive at the same time (Bartlett & Ghoshal, 1988). Sohn & Paik (2004) describe the efforts of Toshiba to achieve a hybrid of centralized control and localized autonomy. Irrespective of the structure chosen, corporations can all be placed somewhere along the continuum between centralized and decentralized management. A centralized structure will be slower to respond to changing market conditions but provides stability and control. A decentralized structure provides autonomy for local businesses to make their own decisions quickly, ; however, the decisions may not align with the parent organizations' strategic objectives and ethics. Many business decisions involve conflict between making money and ethical treatment of employees, customers, and the environment. Centrally managed organizations are more likely to align decisions with a universal corporate code of conduct. Autonomous subsidiaries will make decisions that are reflective of the local cultural values. The risk to the parent organization is that some of these decisions may severely conflict with shareholder values. Treatment of women, children, and respect for the environment are some areas where regional differences exist.