Question

In: Economics

Do the International companies deal with ethics and laws ?

Do the International companies deal with ethics and laws ?

Solutions

Expert Solution

The role of international business ethics is very important for business conduct as well as continuity of operations. With improvement in technology making international market accessible to domestic buyers , international business is growing at a rate than never before.

But with growth and expansion in business , it a mandatory requirement for laws and ethics to protect consumers from exploitation in order for companies to maximize profits and maximize consumer surplus, so that they are in a position to charge the highest price consumers are wiling to pay.

Primary motive of international business ethics lies in the fact that most cultures and nations have entirely different standards of both law and ethics. So it is mandatory for any business that is wishing to expand its operations into foreign markets, that to understand, analyze and study all rules and ethics and also respect and follow the law of the land of the nation they are conducting operations.

The Foreign Corrupt Practices Act (FCPA) was implemented in 1977 in order to prevent the questionable and unethical practices by many American companies in international business dealings. The law regulates, governs and maintains ethical business practices by MNCs and strives to hold up a better image for the involved company and country of origin.

Thus in conclusion International companies abide by the ethical code of conduct and laws in order to ensure that business operation is unhindered and that they don't violate any laws that could lead to loss of international market opportunities.


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