XYZ Construction, Inc. and Asian Business Expansion

Satisfactory Essays
When investigating the possibility of doing business in Asia the owners of XYZ Construction Inc. must look at both the social and ethical issues that might arise along the way. The moral challenge for businesses in the United States it hard enough when balancing profit interests against the needs of workers, customers, governments and special interest groups. The moral challenge is even more severe for multinational companies who need to live up to moral potentials both in the US and in host foreign countries. In developed countries, the moral prospects of the host country are as stringent as in the US. With third world host countries, though, the moral expectations are frequently more lax and multinationals are enticed to lower their standards when circumstances allow (SKS 7000-Executive Concepts in Business Strategy, 2011).

Australia, Singapore, and India all have corporate governance regulatory systems that are based on corporation legislation that presents for mandatory minimum standards dealing with matters such as directors' duties, members' remedies, and shareholder rights at meetings, and default rules for company foundations. These obligatory rules may be compulsory by civil actions brought by injured parties and criminal proceedings brought by the respective regulators. These minimum obligatory requirements cannot successfully deal with issues relating to matters such as board role, structure, and make up. These purposeful matters are dealt with by codes of globally documented corporate governance best practice sanctioned by a variety of stock exchanges and directed at listed companies. This comprises an appearance of self-regulation because it is not compulsory for companies to follow the best practice principles. The universal approach is to necessitate listed companies to reveal in their annual reports the corporate governance practices they have agreed to throughout the relevant year. The listing rules set out comprehensive endorsed practices, and companies are required to state the degree to which they have taken on these practices. Those companies that go away from the suggested practices are required to make clear why they have done so (Kimber & Lipton, 2005).

The underlying principle behind this approach is to make sure that the market is knowledgeable about a company's corporate governance practices. At the same time, there is also acknowledgment that suitable practice may differ from company to company. In particular, smaller listed companies frequently find it hard to meet the terms of requirements such as foundation of several board committees where they have comparatively small boards (Kimber & Lipton, 2005).
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