Ethically Responsible

Topics: Corporation, Multinational corporation, Globalization Pages: 14 (4877 words) Published: September 10, 2010
Running Head: How Ethically Responsible Should Companies Be For the Adverse Affects They Have On Countries They Enter To Do Business

How Ethically Responsible Should Companies Be For the Adverse Affects They Have On Countries They Enter to Do Business

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Changes in the business environment have presented a number of challenges to establish ways of doing business. Thus, managers realized that the survival and growth of firms today and in the future relies on their aptitude to operate globally. Third world countries seek to attract American MNCs for the jobs they provide and for the technological transfers they promise. However, when these MNCs entered into countries to do business particularly in the third World Countries, many American condemn them (Hofffman & Frederick, 1995) for exploiting the resources and workers of the Third World. MNCs are blamed for the poverty and starvation. How ethically responsible should these companies be for the adverse affects they have on countries they enter to do business is the question being posed. The Multinational Companies shall be used as a model on this study to help provide an analysis as to what, how, and why these companies should be ethically responsible.

The premise of this discussion begin in an ethical question how (ethically) responsible should companies be for the adverse affects they have on countries they do business (Donaldson, 1989). This argument will run through a series of rationalization using the knowledge drawn on the aspect of multinational corporations operating in various nations particularly in the Third World.

( Barnet & Muller, 1974). For we knew the fact that the Third World needs multinational companies to provide the much needed jobs, technologies, and a means to improve the life of its people. Nevertheless, while the First World multinational Corporations (MNCs) considered the hope of the third World, it is also considered as the menace of the third World, and poses moral dilemmas on the inconsistency of the issues with regards to exploitation of labor force and resources of the Third World.(De George, 1986) While MNCs are a means for improving the standard of living of the underdeveloped countries, they were also accused for the poverty and starvation such countries suffer, they were even criticized for draining and transferring jobs from the United States to the third world which led to global economic crisis last 2008. American MNCs usually pay at least as high wages as local industries, yet critics blame them for paying workers in underdeveloped countries less than the pay Americans workers for comparable work. When American MNCs pay higher than local wages, local companies criticise them for skimming off all the best workers and for creating an internal brain-drain. Multinationals are presently the most effective means available for the Third World growth, although, it has also demean local cultures and led to the tinsel of American life and the nastiest aspects of its culture. MNCs locate their enterprise in a safe environment to protect them from destruction such as upheavals and exclusions by socialist regimes, thus, being criticised that MNCs thrive in countries with strong, and often rightwing governments. (Barnet & Muller, 1974. p. 502). These ideologically based standpoints are the conflicting dilemmas American MNCs faces brought by differing views. Though not all claims that lead to these dilemmas are equally justifiable, neither are they all morally mandatory. According to De George (1986) we can separate those MNCs that behave immorally and reprehensibly from those that do not elucidate the true moral responsibility. The term ‘social responsibility’ embraces a multitude of internal and external relationship of the corporation’s. (Encyclopaedia of Professional Management, Vol. 2, p. 848) Discussion

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References: Barnet, R., Muller, R., (1974).Global Reach: The Power of Multinational Corporations. New York,. Simon and Schuster)
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Cranston, M. (1973). What are Human Rights? New York. Taplinger
De George, T.R
De George, T. R. (1986) Business Ethics, 2nd ed. New York. Macmillan.
Donaldson, T. (1989). The Ethics of International Business. New York. Oxford University
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Hoffman, W.M. & Frederick, R. E. (1995) Business Ethics: Reading and Cases in Corporate Morality.3rd Ed. New York. Mc-Graw-Hill, Inc.
Hoffman, W.F, Lange, A.E, & Fedo, D.A. (1986) Ethics and the Multinational Enterprise. New York University Press of America
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Louma, J.R. (1978). “A Disaster That Didn’t Wait”. New York. The New York Times Book Review.
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Social Responsibility of Business. Encyclopedia of Professional Management, Volume 2, (1990)
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