Multinational Enterprises' Corporate Ethics
He Jin
University of Northern Iowa
The Legal Social and Environment of Business
Thomas N Bower
November 14, 4016
Multinational enterprises have had a great impact on the world's politics, economy and society. The expansion of multinational enterprises in the world has even changed the lifestyles and values of many countries and regions, and has promoted the world’s economic and social progress greatly. However, at the same time, multinational enterprises have a lot of negative impact on global activities. Many people argued that some of the multinational enterprises of using economic means to destroy environment, and cause commercial bribery, brutal exploitation of developing countries' workers, concealment of product defects and misleading consumers. The issue of multinational enterprises’ corporate social responsibility and corporate ethics is being more and more people's attention.
The Debate on Ethical Issues
There is a long-standing debate as to whether enterprises should be socially responsible and have a good ethic. From the history of enterprise development, social responsibility and corporate ethics is not the birth of the enterprise mission, the existence of enterprises in order to obtain economic benefits, to maximize profits, which is Nobel laureate in economics-- Milton Friedman insists that maximizing profits under free and fair competition is the main purpose of corporate social responsibility. The opponents argue that as the times have changed, the social expectations towards enterprises are changing. The enterprises are no longer independent entities that are accountable to shareholders alone, but also they are responsible for the larger society that builds and sustains them (Robbins, 1997). Corporate ethics not only means that the behavior of employees should be consistent with ethical standards and ethical standards, but also means that the corporate's operation philosophy, purpose and management policies should also be consistent with the community's universal values and principles.
Multinational Enterprises' Corporate Ethics
For multinational enterprises, the issue of corporate ethics is even more complex. As the scope of transnational enterprises transcends national boundaries, it transcends the legal and cultural aspects of a single country. The question then arises as to whether there should be a standard of ethics that is universally respected by all enterprises in different cultural contexts. In many countries, for example, bribery is a common phenomenon, and some government officials have low wages and are accustomed to receiving a certain amount of compensation from their own public services. In some countries, government officials may even rigorously enforce a large number of laws to prevent or impede legitimate business practices until they gain profits. The local cultural tradition seems to have been accustomed to this behavior, for local businessmen, to take this means to complete the enterprise as soon as possible in an effective way, they do not believe that the use of bribery to achieve goals is a shame. But such behaviors may be unacceptable to other sociocultural traditions of other countries.
Therefore, for the difference between the definition of ethical and unethical based on different cultural backgrounds, there are two different opinions to set the standard of judging multinational enterprises' behaviors. One view is that each society's moral and ethical concepts must be considered reasonable and ethical. For multinational enterprises, this means that managers must only follow the ethical values of business of their place (Steiner, G& Steiner, J, 2002). For example, if bribery is acceptable in a country as a means of operation, then even if the conduct in the home country is illegal, multinational enterprises can still act in accordance with local rules. It means that every society's ethics standards and values are reasonable and must be respected. Another view is that there is no cultural and national influence of the basic moral norms (Cullen, 2000). Regardless of cultural diversity, there are always universal values and norms that cannot be violated for all societies, and any enterprise must obey and abide by these norms. The worrying result, however, is that, since there is a certain degree of subjectivity in the selection of these universally applicable ethical norms, managers who think they are familiar with the right and ethical behavior can easily integrate foreign cultures moral system is regarded as low-level or immoral (Cullen, 2000), especially when multinational enterprises are large-scale, well-funded and have strong control in developing countries, cultural imperialism is easy to find breeding ground for these multinational enterprises. A Thai businessman once complained to his American partner that we have become a country for thousands of years and our culture has been over 3,000 years and I hate Americans telling us what my enterprise is doing is unethical. As a result of this discrepancy, so far, the ethical behavior of multinational enterprises is still controversial.