1) Some Ethical Issues Confronting MNCs

Child and/or Forced Labor

Safety and Security Concerns

Duration of Work Week

Child and/or Forced Labor

"MNCs may directly employ children (legally or illegally) and they are usually employed in labor-intensive low-skill jobs.

Source of cheap, unskilled, and not-demanding labor.

Companies may buy products from factories employing children. Eg. Nike

Safety and Security Concerns Major problem - because standards differ from country to country and

in some countries there are no clearly written standards.

However in the United States, there are strict laws for safety and security and companies try to respect them.

For instance, Ames Laboratory fosters an environment in which

employees are encouraged to bring concerns to the attention of their immediate supervisor. Resolution of concerns should occur at the lowest management level possible. However, if the issue cannot be resolved at this level, the employee has the opportunity to proceed within his/her management chain

Duration of Work Week

MNCs have been accused of allowing or even forcing their employees, especially in less developed countries (LDCs), to work very long hours.

Lehmkuhl (1999) has explained that organizational culture can contribute to long hours as this behavior is often valued and expected in an MNC.

Solution

Advisable that MNCs establish clear roles for ethical practices in their host countries.

To do that, MNCs must first study the laws of both the domestic and host countries.

They must draft a moral code of conduct with a well-defined company’s standpoint in the event of certain ethics-related situations.

2) Corporate social responsibility in a globalizing market.

CSR can be defined as the duty of organizations to conduct their business in a manner that respects the rights of individuals and promotes human welfare.

Expectation is so high that it has become an issue/challenge in itself for these MNCs.

important decisions that often result in a major trade-off: increased profits or good corporate citizenship.

MNCs have been found to be "chasing the buck" without sufficient regard for society.

3)Competition as challenge to MNCs:-

Indians are not Inferior (The Times of India, October 26, 1997):-

false notions that Indian companies are incapable of standing up to competition from multinationals.

For e.g. Kwality ice-cream has been bought by Hindustan Liver,

Reliance is already among the top five producers in the world of polyester and chemicals like PTA. It is setting up a giant 22 million tonne refinery, world’s biggest.

The late Aditya Vikram Biria was once asked whether he was afraid of multinationals. "No" he replied, "they should be afraid of me".