Question

1. How do ethics differ in multinational companies versus pure domestic U.S. companies?

2. MNEs try to maximize profits. How do MNEs attempt to maximize profits and minimize profit volatility/risk at the same time?

Answer 1

1.  In some countries, child labor is acceptable and normal, but is frowned upon in the United States. If a multinational company is discovered to have used child labor, it could end up being a public relations nightmare and lead to a decline in domestic sales.

many MNCs tend to think of moral or ethical dilemmas on a societal level as opposed to Americans that view dilemmas on an individual level.

2. Maximizing profits and minimize profit volatility/ risk at the same time by:

A.) Operational effeciency

Implement efficient operations in your international business locations to eliminate waste and reduce production costs.

It can reduce operational costs by outsourcing some of your production activities.

B.) International Marketing

Advertise aggressively to achieve international brand recognition while maintaining sensitivity toward the different cultures in your target markets by employing cross-cultural and multicultural marketing strategies. Multicultural marketing takes to account particular cultural differences of specific groups to avoid the misrepresentation of your ad messages.

C.) Strategic Pricing

Adopt proactive pricing strategies for your products in each country to enhance your sales and maximize profits. Because you cannot apply uniform pricing for your products in international markets due to disparities of economic conditions in different countries, targeted pricing that factors the specific conditions in your international markets helps you optimize sales and profits.

D.) Flexible product design process

Maintain flexibility in your product design processes to be able to satisfy the varying tastes and preferences of customers in your international target markets.