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International social responsibility has benefits like goodwill, attractiveness, and royalty of various stakeholders (government, suppliers, employees, and brand reputation like consumers) connected with the company. There are challenges on how the companies operating abroad should behave in the host countries. Moral universalism is used to address these situations. Ethnocentric is an approach applied by a company in its home country regardless of the host country’s system of ethics while ethical relativism adopts the local code of ethics in whatever country it is operating. MNC on human rights was discussed by former president Bill Clinton which includes a ban on forced labor, abuse, discrimination, a company to provide a healthy and safe work environment, and to pay at least the prevailing local wage. One of the Electronic Industries Code of Conduct (IECC) which comprises of Hewlett, Dell, IBM, Intel, and other companies has agreed to the following policies:
* Banning of the forced and child labor and excessive overtime. * Requiring the contract manufacturer to follow some basic environmental requirements. * A company must audit its overseas suppliers.
Codes of Ethics
* Provide a safe working environment.
* Do not use a child or faced labor.
* Do not regularly require more than 48-hour work weeks. * Pay the wages sufficient to meet the workers’ basic needs. * The international code of conduct is composed of International Chamber of Commerce, the Organization for Cooperation and Development, The International Labor Organization, and the United Nations Commission on Transnational Corporations.
Ethics in Global Management
Globalization has increased the ethical issues facing organizations. Attitudes toward ethics are rooted in the culture and business ethics. Ethics has not yet globalized in most of the countries. It is difficult to reconcile the consistent and acceptable behavior around the world with MNC. The international business ethics refer to the business morals or conduct for MNCs in their relationship with individuals and entities. The behavior is based on the culture and generally accepted ways of doing business in each country or society. These norms are broadly accepted guidelines from religion, professional organizations, philosophy, and the legal system. The approach to the dilemma varies among the MNCs from different countries. American approach treats everyone the same by making moral judgments based on the general rules. In Japan and Europe, they tend to make their decisions based on the shared values, social ties, and their perceptions of their obligations.
The highest ethical standards are practiced by the Canadians, British, Australians, and Germans. In underdeveloped countries there is dictatorship where bribery is a generally accepted practice. Some researches carried out shoes in most of the business entities, political, and business practices. These are affected by corruption. Those countries in Western Europe, Canada, and Australia have the least corruption while those countries in Africa have the highest rate of corruption. The biggest challenge of MNC is their attempt to define corporate-wide ethical postures their greatest variation of the ethical standards around the world. Due to this, some acts are considered illegal or unethical in some countries while in other countries they are acceptable. Bribery
MNC has the challenge of refusing to go along with countries accepting the practices such as bribery or being subject to criticism at home for using unethical tactics to get the job done. Large companies have declined to participate leading to a difference in the way they take the moral stand because of their visibility, potential impact on the local economy, and their ability to afford such a stance. The upper limit of the ethical standard...