Chapter 10: Global Business Ethics and Social Responsibility
10.3 Taking Action, Ethically
Pg 321-327
The Multinational Challenge
Multinational companies have an extensive international presence, controlling,
production, distribution, services, or other facilities outside the country in which
they are based. As you learned in previous chapters, Canadian businesses take
a number of risks when they expand into other countries. Over distance and time
zones, in the face of different cultures and customs, multinational companies
face governmental and foreign exchange regulations and restrictions in the host
country.
International business can earn large profits for their shareholders and at the
same time provide employment for host country workers, improve the economy,
and introduce technology that help develop businesses in their host country.
Nonetheless, multinational corporations have come under attack from a number
of stakeholders worldwide. The reputation of multinational corporations in regard
to their operations in developing countries is by no means untarnished. They are
accused among other things of polluting the environment in their host countries
of taking profits out of those countries without significantly investing in their
economies of imposing values and customs and of using cheap labor without
considering the welfare of their workers.
Coltan, Conflict, and Cell Phones
Clearly, multinational corporations face many challenges if they are to be
accountable to all their stakeholders. Sometimes, behaving in an ethical and
socially responsible way to requires partnerships among with companies and a
number of international agencies. As a key component of cell phones and
computer chips. Congolese tantalum comes from coltan mines whose operators
brutally exploit their workers and dominate the Congolese population.
Consumer Activism
Consumer awareness and activism are affecting how multinational companies
operate. People have now stopped buying things that are being made in
sweatshops. Organizations such as Students Against Sweatshops companies
should provide full public disclosure of where goods are made and how workers
are being treated.
Here are some of the tough issues that multinational companies face as they
move their production into foreign countries:
Should workers be paid local wages or higher?
Should better health and safety practices be adopted to improve the host
country’s standards?
When is it acceptable to hire a person below school-leaving age, and what
constitutes child labour?
Should the company monitor and enforce workplace standards if local
authorities do not?
Companies are responding to consumer concerns about the plight of workers in
foreign countries. To keep brand and reputation intact, many multinational
corporations are now paying external organizations to monitor the operations of
their suppliers in other countries to ensure that those suppliers comply with the
codes.
Future Directions for Multinational Corporations
The future for many of today’s young people may include working for a
multinational corporation. Individual companies establish their own voluntary
code of conduct that defines their ethical standards.
Contributions of NGOs and NPOs
Much creative change has resulted from individuals working together to influence
business or government behaviour and policies. These groups are known as
non-governmental organizations (NGOs) or not-for-profit organizations
(NPOs). They work to bring about change by lobbying, which usually includes
meetings and discussions.
Most NGOs or NPOs finance their ventures with contributions from members of
the public. They also seek sponsorship from corporations. Many companies
donate money to support these organizations and social causes.
Some of the organizations that are working towards ethical business practices
include the following:
The World Business Council for sustainable Development
Canadian Business for social Responsibility
Ethicscentre.ca (formally The Canadian Centre for Ethics and Corporate
Policy)
The mission of the Institute for Global Ethics
The International Institute for Sustainable Development
TakingITGlobal (TIG)
The International Chamber of Commerce
The first international code of conduct for multinationals was created by the
International Chamber of Commerce (ICC) in 1937. The ICC promotes “an open
international trade and investment system and the market economy.”
The ICC, in conjunction with the United Nations Environment Programme, gives
“World Summit Business Awards for Sustainable Development Partnerships.”
Among the 2002 recipients were Alcan Inc., which is a Canadian-based and
specialty packaging company. More than ten years ago, Alcan started a program
with an elementary school in Quebec to promote recycling and educate students
about entrepreneurship. Today, the program, which is called the “Micro-Business
Network,” has more than 32 000 students participating in Canada, Brazil,
Malaysia, and Thailand.
Other recipients of ICC awards include these bodies:
Axel Springer Verlag AG( a newspaper publisher) has partnered with Otto
Versand (a mail-order group), 8900 Norwegian forest growers, the World
Wildlife Fund, and Greenpeace Russia (among others) to establish the
“Newspapers that know their trees” program.
The Business Trust of South Africa is in an alliance of 145 corporate
partners and the South African Departments of Education, Environmental
Affairs and Tourism, Labour, and bolster economic growth in South Africa
through education, the eradication of crime, the flight against malaria, and the
creation of jobs for young people.