“In June 2001 a group of six current and former female Wal-Mart employees filed a sex discrimination lawsuit (seeking to represent up to 500,000 current and former Wal-Mart workers) against the company.”(Hoover’s Handbook, pg.907). Ethics as a philosophy is defined as the discipline concerned with what is morally good and bad, right and wrong. There is always a tendency for ethical issues to arise in a global market and multinational organisations are no exceptions. If you need assistance with writing your essay, our professional essay writing service is here to help! Resistance to investigation as well as lack of transparency. The Multinational organisation that would be discussed in the course of this essay would be Wal-Mart. In regards to the challenges of multinational organisations, does it matter if employees are motivated to contribute to an organisation in a society? Business ethics is the study and evaluation of decision-making by … Is the prisoner's dilemma relevant to business ethics… What are arguments in favor of doing so? You can change your ad preferences anytime. . 1) Some Ethical Issues Confronting MNCs Child and/or Forced Labor Safety and Security Concerns Duration of Work Week 2. The open door policy actually helps employees experiencing problems within the organisation to go beyond management. Emotionally manipulating and exploiting vulnerable people. Special Ethical Issues Facing Multinational Corporations: Appropriate Responses. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. 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 practical standard represents an extreme diligence toward moral behavior. and Values IAp a military ethical climate and discuss strategies to mniplfment the elements. “The complaint, filed with the National Labour Relations Board, alleges that Wal-Mart violated federal labour law by “bribing” employees to report on co-workers who favoured a union.” (www.washingtonpost.com). However, by acknowledging that the lowest end of the continuum is adherence to the letter of the law, MNCs would agree to accept a defined minimal ethical stance. With regard to technology. They have been undergoing investigation for using illegal immigrants within their organisation.”In October 2003 federal agents uncovered hundreds of illegal immigrants employed by outside contractors cleaning its stores.”(Hoover’s Handbook, pg907) Hence the company was sued for breaking immigration laws. Such issues include transfer, promotions, employment of new staff, the environment and labour issues. What special ethical issues face multinational corporations? 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. It is believed to be largest company in the United States of America. 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. Labour Union Opposition: Wal-Mart is an organisation without unions. 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. If you continue browsing the site, you agree to the use of cookies on this website. Laws governing certain businesses within an organisation in an individual country could have its variances and inconsistencies, nevertheless when other counties are internationally concerned, the intensity of inconsistency is even more diverse. MNE in India. Wal-Mart has been accused of being very selfish as the organisation has claimed that they were worried that they would have more than enough product for customers in the future but it was discovered that it was for their own bias interest as they claimed it was something they did as company’s obligation. Ethics deal with “what that ought to be”. The concept of ethics to business decisions encompasses all aspects of business management and operations in a business organisation. There has been a serious allegation of Wal-Mart discriminating against women within its organisation. A lot of Wal-Mart employees are therefore not able to make ends meet. For example, Social ethics, political ethics. Free resources to assist you with your university studies! ETHICAL ISSUES IN MULTINATIONAL CORPORATIONS Introduction A multinational is defined as an enterprise operating in several countries but managed from its home country. The conditions in a host country may be much inferior to those in a multinational’s home nation. 1-888-302-2840 1-888-422-8036 On the contrary, the positive ethical practices of an organisation are highly important (Etzioni, 1988 Kotter and Heskett, 1992) this would normally boost the image of such an organisation as they tend to have an edge over others in a very competitive market. The end result should be to aid trade and enhance in profit and a make standard of living better. MNC wields in a given locale. Lastly, the basic standard demands adherence only to the letter of the law and, thus, reflects minimally acceptable behavior. As this help the safeguard of money movements and interests accrued over time are expected on time. The unprecedented globalisation that has taken place over the past century has spurred a massive increase in FDI via Also the company need to manage its employees in a rather decent way in other to avoid law suits from them as well. 17th Sep 2020 According to PBS, “Wal-Mart employs more people than any other company in the United States outside of the Federal government, yet the majority of its employees with children live below the poverty line.”(www.pbs.org), They have also added that the company claims to sell goods manufactured in the U.S only but their products are goods and serviced produced abroad or in overseas and at debated workshops. Now customize the name of a clipboard to store your clips. Euro). PBS states that the open door policy operated by the Wal-Mart management does little or nothing to help employees in a difficult situation. Discriminating between gender, disabilities age and sex. Globalization, Multinational Corporations, and Corruption. In a business organisation, investors should always get their moneys on time. The size of a multinational organisation and power could play a huge impact on the policy issues in a nation, such issues would be felt more by relationships with developing nations as supposed to developed nations. What is the duty of the multinational organisations in the countries businesses are located or situated? It would then be up to each MNC’s management team to seek to move closer to the upper end of the ethical continuum. They rather operate on an open door policy as suppose to relying on the unions, they believe they do not need third parties. SO “in February 2004, a federal judge ruled that Wal-Mart should pay workers for overtime hours” (Hoover’s Handbook) the case was pending for a while but then Wal-Mart then maintained their policy was against such work, hence, managers who were involved in such atrocity were punished by getting fired. This is not an example of the work produced by our Essay Writing Service. Multinational Enterprises 1. In a business that competes mainly in global markets, multinational companies (MNCs) operate in different social, cultural and ethical environments. Discuss the ethical issues associated with multinational corporations. VAT Registration No: 842417633. Government Rules and regulations in regards to duties, taxes restrictive and monopolistic trade practices and unlawful activities like bribing and corruption should be adhered to. Every company has got problems and the companies that thrive are usually organisations that detect ethical problems early enough and create a solution for them. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. The individuals get together on a regular basis brainstorming on how to push products that don’t harm the environment can purchased or made. For Wal-Mart to survive, they would have to prove that they care about their employees by treating every employee ethically right, this would help control and probably stop the criticism and encourage even more customers globally. Looking for a flexible role? The sample consisted of 335 subsidiaries of large multinational companies with more than 50 employees and an annual turnover of more than 30 million CZK (1.2 mil. The requirements in these areas consist of (but are not restricted to) providing local, raw materials, equity participation, preferential treatment to local sources. Many companies do excellently well even when they practice unethical conducts. These are just some things that happen or come under unethical practices. “Members can save as much as 50% on services not normally covered by medical insurance.” (www.ufcw324.org). Are they demonstrating a sense of social responsibility? Information personal to customers should be kept sacred and not be used for personal gain. Multinational companies are sometimes faced with issues that tend to present challenge to them between balancing their interest in profit-making and expectations and interests … ethics in organizations, and conceptual aspects addressed by some field specialists, at the end of the paper we presented a study conducted to identify specific issues of ethics in multinational organizations. multinational companies (MNCs) might be pursuing profit at the expense of vulnerable workforces, the environment and so on. Looks like you’ve clipped this slide to already. Ethical Values and Business Ethics in Multinational Companies in India in Context of Globalization: An Empirical Study Hardeep Singh1+ and Bikram Pal Singh 2 1 Ferozepur College of Engineering and Technology (FCET), Ferozepur (Punjab) INDIA 2 Global Institutes, Amritsar (Punjab) INDIA Abstract. Wal-Mart has accused a different body for this alleged allegation as it maintains the contractors who were given the job to hire employees on behalf of the company did not do their home work properly before employing. The massive differences in culture generate a lot of managerial issues and ethical problems, are no exceptions. The currently attainable standard reflects behavior deemed basically moral by society; this standard is not the mere letter of the law, but rather compels adherence to the law as well as good faith use of common sense as it relates to the law and what is deemed by society to be ethically sound. Human rights responsibilities require that MNCs not discriminate on the basis of religion, gender or race and that these organisations respect the cultural and social objectives, traditions and values of the countries in which they function (Getz, 1990), The relationship between MNCs and the public has two major categories: technology transfer and environmental protection issues (Getz, 1990). Reference this. 1) Some Ethical Issues Confronting MNCs Child and/or Forced Labor Safety and Security ConcernsDuration of Work Week. Wal-Marts vice president for communications responded that company auditors had, determined that the methodology used was flawed, and the company “did not respond to it in any way internally.”. Culture, according to Hofstede is a combination of mental programming that differentiates various groups from others that is seen in the beliefs and values of a society (Hofstede, 1980). According to Hill (2014) a multinational corporation (MNC) can be defined as a firm that engages in foreign direct investment (FDI). The ethical responsibility of a stakeholder is to make known his or her preferences to the companies he or she purchases from or relies on. Meanwhile they need to develop and enforce their own codes of ethics specifically directed at the issues related to a multicultural, multinational business environment. (www.usatoday.com), In January 2004, The New York Times reported on an internal Wal-Mart audit conducted in July 2000, which examined one week’s time-clock records for roughly, 25,000 employees. However, upon review of the other model codes, the guidelines are suitable for operating in the international arena. 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. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Wal-Mart has done very well for itself as it has beaten a lot of other organisations in terms of its discounting retailing. . Which side is more persuasive? Employees rendering over time services to the company have not enjoyed the fruit of their labour as they were not paid for their overtime services rendered. Registered Data Controller No: Z1821391. Ethical Issues in MNCs. It takes a long time for company to build a reputable name, so care should be taken to abide by cooperate social responsibility. It is therefore important to come up with solutions to Multinational ethical dilemmas. Ethical Behavior. You can view samples of our professional work here. This would reduce the allegations laid against the company as a whole. Organization of MNE. Some people think itâ s better to be unethical Other people donâ t know how to make sense of their ethical choices. It is said to be a system that rules and governs the body, a science with rules governing it’s principles whether good or bad, rules in practice of human actions. There were 60,767 missed breaks and 15,705 lost meal times. Businesses should practice building an honest reputation to endeavourer that there is the constant smooth running in an organization. Child and/or Forced Labor "MNCs may directly employ children (legally or illegally) and theyare usually employed in labor-intensive low-skill jobs. It is corrupt for Wal-Mart to ban employees to talk to union representatives given that according to the National Labour Relations Act, employers should not be allowed to put off employees from creating a union for it is their right and should be enforced if need be. (www.brainyquote.com) Authors from different parts of the world have also defined ethics in a lot of different ways. In: McDonald F., Tüselmann H., Wheeler C. (eds) International Business. Multinational organisations have the ability to move about a massive amount of resources globally. If you continue browsing the site, you agree to the use of cookies on this website. Ethical Dilemmas for Multinational Enterprise: A Philosophical Overview Part One: Review Question #1 Multinational Corporations have always been and are currently now under harsh criticism. Differences would probably be most pronounced between operations in developed and developing countries as well as being dependent on the degree of power the. MNCs should also give licenses, in terms of realistic terms and conditions, for using properties and rights. There are procedural and substantive aspects of building such a code. Corporations must not seek to selfishly influence the policy making process at whatever cost as long as such policies are aimed at the good of all people and the environment in general. The Ethical Issues Facing Multinational Corporations Corporate managers are typically expected to maximize the returns of the investors while at the same time augmenting a firm’s reputational capital, circumventing agent-principal conflict of interest and abiding by regulatory standards. Wal-Mart disallows employees from discussing with union representatives. Wal-Mart has created fourteen maintainable value networks made up of suppliers’ employees and environmentalists. On the contrary, the positive ethical practices of an organisation are highly important (Etzioni, 1988 Kotter and Heskett, 1992) this would normally boost the image of such an organisation as they tend to have an edge over others in a very competitive market. Multinational organisations must realize that, the culture of an organisation could have an effect on the behaviour of an employee within an organisation. Company Registration No: 4964706. Study for free with our range of university lectures! 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