Multinational Company Case Study

Should a multinational company reduce its ethical standards to compete internationally? With technology revolutionizing the way businesses compete and obtain resources, the globe is appearing smaller every day. This allows businesses to outsource activities to other countries and save money on production costs and to expand their global reach by opening facilities anywhere in the world. Expanding internationally can be seen as a benefit for many companies however, if the business does not have a strong code of ethics, could cost the company a lot more than the benefits received. Governments of underdeveloped nations may not carry the same legal restrictions than the company’s home country. This could be seen as a temptation to cut costs by

Third world countries are the most likely to be taken advantage of for their natural resources. This is a difficult dilemma because many agricultural businesses buy land in these poor countries because it is much less expensive and are able to grow crops for exporting. Buying cheap land is not an ethical problem but it does diminish the amount of good land for the locals to grow their crops.

Lastly, wage issues are a large ethical dilemma. U.S. businesses in third world countries are likely to pay their employees much less than what they would pay an American worker. This double standard makes it appear as though the value of American labor is higher than that of the third world worker for the same job. However, others suggest that this wage difference is necessary in order to not negatively affect other indigenous businesses and the local

First, companies must always respect core human values that all are entitled to. This should set the base for all business decisions and define the company’s minimal ethical standards. Second, local traditions should be respected. In Japan it is tradition to exchange gifts when conducting business. Some Western companies have had trouble doing business in Japan because the gift could be seen as a bribe. Most now tolerate the tradition, but to stay within their code of ethics have set specific limits to what can be given as a gift. Lastly, Thomas reminds us that context matters. Some practices are wrong in any setting, while others may be acceptable in a certain setting but unethical in another. Sometimes large machinery used everyday in a country like the U.S. is required for a job in a poorer country. The machinery is safe in qualified hands, but in the poorer country workers may not be suited to operate the