Ethical Issues in MNCs

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
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Ethical Problems in MNC by Khurram

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Ethical Issues in MNCs

Arise most often in the context
of:
Employment practices
Human rights
Environmental policy
Corruption
An
MNCs
perceived
obligations to society

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Ethical Problems in MNC by Khurram

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moral

Employment Practices
What standards should be applied?
Home nations
Host nations
Other
Should the MNC adapt its policies?
Standardize?
Hiring practices, labour relations,
diversity
issues,
employment
conditions are some specific issues
that require careful thought
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Human Rights
A manager can assume as universal
her/his views on freedom of:
Association
Speech
Assembly
Movement
Political repression
What is the responsibility of an MNC
to uphold different standards of
human rights?
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Repressive Regimes
Is it ethical for MNCs to operate in
countries with repressive regimes?
Is inward investment an agent for
change?
What is the limit beyond which inward
investment would not be justified
under all circumstances?
What if competitors from other nations
invest and you dont?

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Environmental Policies
Locally

mandated

environmental

standards may be inferior to those an MNC

knows it can achieve
Tragedy of the commons: a resource held
in common by all, but owned by no one, is
overused

by

some,

resulting

in

degradation.
If a decision is legal but unethical, should
it be taken?
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Corruption
Government

officials may ask for

bribes for an MNC to get things
done
Is an MNCs manager who agrees a
corrupt manager?
Should an MNC ever accede to
bribery demands?

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MNC Power and Moral

Decisions

MNCs have power over a host

country
They can move production away
Along with power arise obligations
(?)

Power is morally neutral

How it is used is what matters
Perceptions of how it should be
used and of its impact vary
Company view
Host country view
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Determinants of Ethical
Behaviour in MNC

Organization culture
Personal ethics

Decision making processes

Leadership
Unrealistic / realistic performance
goals

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Ethical Problems in MNC by Khurram

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Ethical Decision Making in

MNCs

Hiring and promotion

Organization
culture
leadership
Decision-making processes

and

Stakeholder perspectives

Ethics officers
Codes of ethics

Moral courage:
Walk away from
unethical decision
February 20, 2016

profitable

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