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Multinational Corporations

Autor:   •  February 26, 2013  •  Essay  •  2,035 Words (9 Pages)  •  1,500 Views

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Ethics in business must start at the top of a company and work its way down to every employee involved in an organization. In today’s world, corporations feel a moral obligation to practice business fairly while treating their employees with respect, so shouldn’t a company keep the same ethical approach if they expand their operations abroad? Over the last century or so, the global economy has changed drastically, with less barriers and a greater flow of goods and services between countries. A multinational corporation is any business that has productive activities in two or more countries. Although there are many benefits to the changing world economy, a majority of these multinational corporations are harming their host countries in a variety of ways. The three main ethical issues that multinational corporations are involved in when operating in host countries include environmental pollution, unethical employment practices, and even corruption. The purpose of this paper will be to analyze these three ethical issues, and also consider policies that currently exist and some that should be adopted in order to maximize the benefits, and minimize the harms of these multinational corporations in their host countries.

A significant ethical issue for multinational corporations in host countries is environmental pollution. This issue arises when environmental regulations in host countries are inferior to those of the multinational corporation’s home country. Many developed nations have substantial regulations governing the emissions of pollutants, the dumping of toxic chemicals, the use of toxic materials in the workplace, and so on. Those regulations are often lacking in developing nations, and the result can be higher levels of pollution from the operations of multinationals than would be allowed at home. Many multinational corporations move operations to a developing host nation specifically to avoid costly pollution controls, where they in turn add increased pollution to the surrounding environment simply for the reason of lowering costs of production in order to gain an advantage. Pollution can endanger plant life, wildlife, human life, and water in host countries. Multinationals can also help contribute to the phenomenon known as the tragedy of the commons, which occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation. They can contribute to the tragedy of the commons by moving productions to locations where they are free to pump pollutants into the atmosphere or dump them in oceans or rivers, thereby harming these valuable global resources. Although environmental pollution is an ethical issue alone, another ethical issue branching off from this is the fact that the health of the people in the host country is being put into jeopardy as well. Although businesses do not have an obligation to protect the environment above what the law requires, they must


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