Ethical Challenges Faced by Multinational Businesses

I. Introduction: Ethical challenges faced by Multinational businesses

A business organization that expands internationally does not only need to understand the organizations goals, vision, strategies, policies, or missions but must also take into consideration various ethical and legal issues in the international business (Kline, 2010). Companies that organize for expansion into the foreign markets must also handle severe ethical and moral challenges to ensure success (Gurnani, 2015). The most prevalent concerns in international business include human rights, the political arena, religion, the environment, supervisory oversight, trust and integrity, bribery and corruption, equal opportunity and workplace diversity, outsourcing, child labor, and working standards and conditions.

Cultural consideration also contributes to breaking or building companies businesses globally. Every country has its historical culture, traditions, customs, and code of ethics. In some countries where women are not given the same rights as men, gender can be an issue. On the other hand, cultural events and religious holidays can also hinder some businesses operations at some point in time (Kline, 2010). Compliance with cultural and ethical values is essential for the multinational corporation to attain a competitive advantage.

II. Working Standards

A. Unrealistic and conflicting goal influence drives managers to overwork without compensation.

Data from the recent surveys in the United States indicate that about 50 percent of multinational company workers presume no ability to determine their working schedule. Due to extreme expectations by most international companies, some workers have to undergo longer working hours that ultimately affect their health due to stress and fatigue (Hill & Hernndez-Requejo, 2006). This, in most cases, contributes to low labor productivity below the potential. Overwork can be defined as the increased risk that an employee will feel the signs of work stress and fatigue, which ultimately hinders the long or short-term productivity rate of firms or workers. Studies on the relationship between hours of work and Labour productivity indicate a massive decrease in productivity as the working hours per week increase (Gurnani, 2015). There are several instances in which irregular and long hours of work are linked to a range of mental health, risk of injury, and physical fitness that hampers long-run capacity to be productive at a place of work amongst several multinational businesses.

B. Health and Safety standards do not align with companies standards in domestic countries.

For instance, most work conditions in foreign countries are not favorable compared to the United States. Employees usually work for long hours within hazardous and uncomfortable environments. Even though the United States established the Occupational Safety and Health Administration, which has significantly minimalized workplace injuries, it needs money to comply with some regulations and rules (Kline, 2010). As a result, most international companies fail to apply their home Occupational Safety and Health Administration standards and instead accept the poor work conditions of the host country.

Workplace condition has a critical impact on the workers health outcomes due to the significant amount of time they spend in workstations. The type of work done and the work environment can expose workers to many hazards (Gurnani, 2015). Such threats include moving parts, cutting tools, and heavy objects, while some include long working hours, high levels of noise, and bacteria. Exposure to hazards can cause disease and occupational injuries affecting social, physical, and mental wellbeing in various levels of severity, from fatality to minor injuries.

III. Workplace diversity and equal opportunity

A. How do cultural differences affect workplace diversity and equal opportunity?

Much progress has been achieved in the United States towards establishing a diverse workforce and equal opportunity for different cultures within the country. The United States has further strives to create a force of different genders, backgrounds, and races. The policy of equal opportunity for anyone who deserves a promotion at a place of work or who wants to earn a raise. However, some foreign states do not mind employee diversity and equal opportunity (Hill & Hernndez-Requejo, 2006). As a result, some of the policies brought about by multinational companies in the United States to ensure equal opportunity and recognition of diversity are not well received.

B. How can company policies help in reducing diversity and equal opportunity issues?

Through their practices and policies, multinational companies can enhance equal opportunity in the workplace within the host countries (Kline, 2010). For instance, these companies can directly promote gender equality within the host countries through employment policies in the foreign affiliate and spillovers in labor markets. In Bangladesh, studies have reported downstream business partners of multinationals in the garment and textile industry had over 50 percent of female administrative employees, a unique phenomenon compared to any other local company.

Moreover, it has been evident that most local companies that share suppliers with multinationals hire more women. Multinational companies can influence diversity recognition and equal opportunity enhancement by setting good examples within their host countries. Additionally, promoting equal opportunity for all groups in host countries is key to developing a sustainable and lasting business and is also the right thing (Gurnani, 2015). Based on the businesses domestic countrys values and norms and those of the stakeholders and customer base, outcomes in host countries can be positive if the policies are appropriately put in place. Finally, the inclusion of womens skills, energies, experience, and talents in multinational companies requires the combined effort of all the stakeholders, policymakers, civil society, and the business sector.

IV. Child Labour

A. Why do countries turn a blind eye to child labor?

Due to cutthroat competition, increasing wealth division, and unstrained market forces between countries, over 300 million children are exploited in hazardous working conditions worldwide. According to the report by a representative of Austria, several countries have turned a blind eye to the challenges of child labor (Kline, 2010). Nevertheless, economic progress depends on an educated and well-trained workforce. As a result, governments must ensure that education from the primary level is funded and cut down on military spending. Also, there should...

VI. Environmental issues

A. Why do firms export pollution?

Citizens of both emerging economies and rich countries produce unbearable CO2emissions. Multinational businesses probably spread a considerable portion of such emissions due to their sheer size because multinationals are generally known for a massive share of economic activity (Al-Khatib et al. 2005). For instance, as from international trade literature, multinational businesses dominate external transactions, most of which are within the firm (Kline, 2010). As a result, it cannot be surprising to establish that international companies produce a colossal carbon footprint. However, probably the footprint size is larger than many would preempt. According to Lpez et al. (2019), if United States Multinationals CO2 emissions outside the United States were to be measured in the form of CO2 units, the United States would be ranked as the 12th top emitter within the globe. As a result, united states multinational foreign operations would become a larger CO2 emitter than the whole Australian or United Kingdom economy.

According to research findings, pollution activities are exported to countries with weak environmental policies. The impacts are economically huge.

B. Pollution in countries that lack environmental regulations to increase profitability.

In general, environmental regulations require companies or activities that contribute to pollution to undertake lessening activities that may increase costs for businesses. Hence, the regulatory variance across sectors, jurisdictions, or firms can result in changes in the relative cost of production. Such shifts could result from variances indirect costs (Kline, 2010). For case in point, the European Union Emissions Trading System that regulates close to 12000 installations of carbon emissions in Europe is approximated to have increased the mean material cost for the controlled firms in cement, iron, power, and steel sectors by 6 percent to 9 percent. Increased relative costs come from higher indirect costs due to induced policy changes to input costs (Hill & Hernndez-Requejo, 2006). For instance, even though the European Union Emissions Trading System does not directly regulate electricity production, consumers of electricity in Europe pay higher charges for electricity because the electricity producers pay the price for carbon emissions (Al-Khatib et al. 2005). Variances in environmental regulations can, as a result, modify the competition between companies by relatively altering the costs of production.

VII. Conclusion

A. Summary of ethical challenges and the impact on the firms image

Some business activities that are frowned upon or considered illegal in the United States are usually tolerated or allowed to operate in several foreign countries. Nevertheless, corporations that enter the global markets with a developed code of ethics have a better opportunity of attaining a positive international image that contributes to high profits and

a more substantial market share.

In foreign trade, multinationals front of the global market, ethical and social issues, and marketing ethics are complex and lengthy. Every nation is unique in-laws, culture, child labor, diversity, and workers rights. Before committing, firm planning for operations in a foreign country…