Question

MNC’s operate in many different countries with many different cultural and ethical norms and environments. Relative to practices in the US should a US MNC relax its ethical standards in order to be more globally competitive?

Answer 1

Yes, A company who is a multinational company and who wants to operate in various other countries should be adapting to the cultural and ethical norms of those countries because it will be providing an additional competitive edge and it will also help in the adaptability of the organisation in the other country and it will also lead to attracting the potential customer of that country which will help in increasing the market share and increasing the overall profitability of the company.

An United States company when it is operating in domestic market is well aware of the demand and need of its existing domestic customer but when it wants to extend its business outside the United States, then there are several other culture and beliefs of people which should be respected by the company in order to survive in those countries and they should be trying to adapt themselves and accommodate those cultures in their business in order to lure those foreign consumers and help the business in order to create larger organisational value through gaining of the market shares

If I had to example it through a company, it would be McDonald's which is a United States company and it has opened its branches in India almost 10 years back, it was not earlier adapting to the needs of Indian people and it was flooding the Indian markets with American burgers but it was not able to gain the adequate market share but once it has modified its burgers according to the needs of the Indian citizens,the sales spiked up and now the retail outlets are very famous in India like it has included Mac aloo tikki which is a specific component of Indian recipes.

So, it can be summarised that multinational corporations should be adopting to different culture and ethical norms in order too increase their competitiveness.