Question

“You are a $tockholder (and/or perhaps, a manager) in a large U.S. multinational company (MNC) that manufactures toys in several different countries in Southeast Asia, and sells these toys both here in America, and in many other countries around the world.

Is it acceptable for your company to lower its ethical standards (perhaps those commonly followed in the U.S.) to compete internationally?

International ethical issues commonly confronted by a MNC might include:

[1] foreign countries with liberal child labor laws

[2] foreign countries with liberal environmental standards

[3] foreign countries with lower product quality standards

[4] foreign countries with lower worker safety requirements

[5] foreign countries where bribery and other forms of corruption are commonplace

Answer 1

No, it will not be acceptable for my company to lower its ethical standards in order to compete internationally. This is because our company’s values and morals guide the actions of the company and the decision to behave ethically, at the prime level, is a moral decision. The right course of action would be uphold the ethical standards and ensure that manufacturing in several different countries in Southeast Asia is as per the norms and conditions set by the company. The decision to behave ethically is the right course of action for the long run and since a company is a going concern (i.e. it goes on forever) the focus should not be on short term profitability but on long run sustainability of operations by taking ethical actions and decisions. Secondly it will be in the best commercial interest of the company to act ethically as ethical behavior can bring significant benefits to a business.

By not allowing use of child labor, by ensuring that operations are environmentally sustainable, by ensuring high quality of production, by ensuring proper and safe work environment and by not taking part in bribery and other common corruption practices the company will ensure that its operations are moral in nature and hence the company is based on principles of integrity, morality, fairness and equity. This will, in the long run, also bolster the image of the company in the minds of the consumers who will start perceiving the company in a positive light and this will definitely translate into higher sales as well.