Ethics involves respecting human rights and local traditions but avoiding corruption.
Corruption is using public power for personal gain.
Bribery is the most common example of corrupt activity.
However...
Gift giving between business associates is common in Asia and some Arab countries.
Bribery: What is it and what's the penalty?
Details here?
If you work for a British firm, you could face prosecution for offering or accepting a bribe.
Stakeholder conflicts.
What would each stakeholder group hope to achieve?
Stakeholders in an international firm
A stakeholder is any individual or organisation that is affected by the activities of a business.
What responsibilities does a MNC have for each stakeholder group?
How might this conflict with other stakeholder groups?
Examples of stakeholder groups:
Shareholders.
Managers and workers.
Suppliers.
Customers.
Communities.
Banks.
Governments and NGO's.
Pay and working conditions.
A major ethical issue involves the complexities of global supply chains and the working conditions of workers in other countries.
Little legal protection for workers.
Very low pay levels.
Little activity by trade unions.
Child labour.
Forced overtime.
Little H&S regulation.
Some western brands publish a list of the factories they use and an audit of their ethical practices.
If you work for a British firm, you could face prosecution for offering or accepting a bribe.
Stakeholder conflicts.
What would each stakeholder group hope to achieve?
Stakeholders in an international firm
A stakeholder is any individual or organisation that is affected by the activities of a business.
What responsibilities does a MNC have for each stakeholder group?
How might this conflict with other stakeholder groups?
Examples of stakeholder groups:
Shareholders.
Managers and workers.
Suppliers.
Customers.
Communities.
Banks.
Governments and NGO's.
Pay and working conditions.
A major ethical issue involves the complexities of global supply chains and the working conditions of workers in other countries.
Little legal protection for workers.
Very low pay levels.
Little activity by trade unions.
Child labour.
Little H&S regulation.
Some western brands publish a list of the factories they use and an audit of their ethical practices.
The Ethical Trading Initiative is a British NGO concerned with the employment practices of multinationals. Details here.
Environmental considerations
MNCs are concerned about their impact on the environment for many reasons:
Pressure group activity and negative publicity.
Environmental issues:
Carbon dioxide emissions.
Waste disposal:
A lack of regulation has allowed some MNCs to dump waste in less developed countries.
Video accusing Unilever over toxic waste in India goes viral. Details here.
Supply chain considerations
Exploitation of 'bonded' labour. Details here.
Child labour.
This is culturally acceptable in some countries.
With little formal education available in these countries, what is the alternative?
Ikea & child labour. Details here.
Marketing considerations.
Ethical issues that a MNC must consider:
Misleading labelling.
Inappropriate promotional activities.
GlaxoSmithKlein (GSK) in China. Details here.
