Global Ethics

GLOBAL ETHICS

An Integrative Framework for MNEs

Ashay B . Desai

And

Terri Ritenburg

In a globally competitive atmosphere in the present , various multinational corporations and firms need to focus on effective strategic , and wise decision making for them to have the assurance of having a stable state in the business world they belong . These global corporations must integrate the current widespread idea of global ethics or ethical guidelines for internationally competitive enterprises Moreover , various factors and issues concerning these multinational enterprises can be exhibited using an integrative framework

which will be a very useful tool to the Managers of Multinational Enterprises (MNEs

According to some researches in this field , global ethics has a vague meaning . Though , it confuses many MNEs on how to effectively incorporate these ethical guidelines in their business decisions , it is still an important concept for the achievement of their operations . Furthermore MNEs confusion can be attributed by the conflict among them on how they view what ethics really means . As Buller (1991 ) said that one of the main reasons of conflicts is likely to be ethics . These different understanding about ethics is due primarily to cross-cultural principles in different countries and nations . Various beliefs about ethics are different from country to country

MNEs need to determine the demands of the society , they have to prioritize and enhance these social demands , for them to be able to come up with a certain pattern of responses . In addition , determining these social demands is one of the main difficulties the MNEs at corporate level meet . Thus , to effectively respond to these demands , various strategies and operations in decision making must be employed (Arcelus and Schaeffer1982 Ackerman and Bauer , 1976 Ansoff , 1975 Frederick 1991 . Several internal and external environmental factors may affect the significance of these social demands that contribute to much confusion

Ethics , specifically business ethics give a big influence on the efficient performance of companies . The growth in relevant environmental issues , demands for a larger production and safety of workplaces , minor employment , product presentation and the like which constitute the overall execution of the companies which are needed to be taken into important considerations (Fritzsche , 1990 Arcelus and Schaeffer , 1982 Loosely speaking , incorporating ethics in business operations contribute a big impact for the improvement of the competitive state of the business , better functions , and maximization of the riches and assets of the shareholders . Steiner (1976 ) said that researchers feared that associating management ethics would lead to confusion of managers that may cause them to deviate to the fundamental business operation . Hence MNEs must be sensitive enough about ethical framework in their business Their values and point of views are the mechanism in molding this framework which leads in the formation of the corporation 's ethical levels

The recommended ethics framework for MNEs has important factors in consideration . Its major goal is to allow the MNEs to improve their ethical uniformity in making decisions . The external factors , and the internal mechanism that includes the corporate levels , compose the ethical framework of MNEs . The external factors which compose of universal codes of conduct , home and host governments , international groups and regional groups shapes the ethics improvement starting from the point of view of the parent corporation stretching the connections to the process of strategic decision making of the MNEs . Certain ethical guidelines concerning business operations for Multinational Corporation are included in diverse international agreements that are approved and accepted globally . Primarily , it aims to break the cultural and social differences , surpass national bs to achieve universal intercontinental and cross-cultural standards of ethical behavior . The OECD ethical guidelines and the United Nations code of conduct have something in common . They have the same common ideas and concepts in terms of general guidelines . Nevertheless , these two have different role in the global business atmosphere . Essentially , the role of OECD guidelines is to restrict and regulate the MNEs to intervene with the political dealings of the host country and the MNEs must obey the general policy purpose of the host country . On the contrary , UN code directly affects the parent corporation and the host country by dealing affairs such as anti-corruption , consumer safety and ethical responsibility which MNEs must take into account to attain the socio-economic progression of the home country

MNEs must not only focus on the completion of the objectives of the host country 's economy . Multinational corporations in the third world countries have to be moral for them to be accepted in their host country (Rosario , 1992 ) MNEs are similar to channels of information because they are considered as the linkage for the transport of ethical standards for country to country . Also , there is the difficulty to spread these norms throughout across culture without revising it to fit in that particular culture (Rosenzwieg and Singh , 1991

International groups somewhat indirectly and even sometimes directly affect the multinational corporations in improving their ethical conducts . Likewise , regional groups which are in the past being neglected by the government are in equal importance as the international groups . The local and regional sectors are mainly the target areas of this particular group . theless , regional groups significance cannot be underrated they may have an impact on the host government thus building consciousness worldwide concerning the policies the MNEs comply

Moving towards to the corporate level of the framework , its various views are too hard to understand . One of the difficulties that arise among MNEs during the process of preparation and decision making is the ambiguity of the definition of ethics for a particular instance Therefore , the internal mechanism of the framework would be a great tool to successfully come up in a better strategic planning and ethical decision . Various participants in this mechanism play important roles to create moral choices and values for the corporation . They will help each other to construct a suitable ethical decision for the good of the whole organization

The customary guiding principles of a corporation is how to deal with the monetary profit of the business and at the same time the satisfactory of the public in its products and also , the enlargement of the riches of the shareholders

About 93 percent of the Fortune 500 companies adopted a corporate code of conduct , and improved it lately , this is according to the survey done by the Center for Business Ethics (Center For Business Ethics , 1986 These companies efficiently and clearly see the importance of implementing such code of conducts for the better operation of their business and for the satisfactory of their objectives . The multinationals also extended to their subsidiaries all throughout the world their code of conduct . However , as explained recently , it must be modified in every nation because culture differences must be consider to be able for it to be successfully executed in every other country

The role of CEO , as well as the top management , is observed to be important for the setting of the ethical models that may greatly assist the MNEs of the corporations . Gradual incorporation of these norms within the corporation and in the corporate policy is situated by the CEO (Donaldson , 1985 Fritzsche , 1990 Lippit , 1976

The concept of ethics in organizations can be further established and refined with the help of the ethical advisor and ethics committee in a corporation . Their presence would be a big help for an organization to have a better ethical decisions . Moreover , the construction of an ethics committee is an alternative way in institutionalizing the ethical behavior in the corporation . Both ethical adviser and ethics committee are important in the expansion of the consciousness about ethics among the multinationals in their subsidiaries in different countries

Finally , the ethics framework for MNEs is a useful instrument and general backgrounds for multinational corporations for them to wisely select the more definite agenda that can be further improve by the corporation

Works cited

ADDIN EN .CITE AnsoffAnsoff1975Bauer1976 5517Ackerman and Bauer197 6BullerBuller1991Desai1997 1117Desai , Ashay B . and Rittenburg , Terri L .Global Ethics : An Integrative Framework for MNEsJournal of Business EthicsJournal of Business EthicsJune 1997Kluwer Academic PublishersBusiness ArticleDonaldsonDonaldson1985EthicsCenter fo Business Ethics19 86FrederickFrederick1991Fritzsche1990 8817Fritzsche1990LippitLippit1976RosarioRosario1992SchaefferArcelus and Schaeffer1982Schaeffer Arcelus and Schaeffer1982SinghRosenzwieg and Singh199 1SteinerSteiner1976 (Ansoff , 1975 Bauer , 1976 Buller , 1991 Desai , 1997 Donaldson , 1985 Ethics , 1986 Frederick 1991 Fritzsche , 1990 Lippit , 1976 Rosario , 1992 Schaeffer , 1982 Singh , 1991 Steiner , 1976

ADDIN EN .REFLIST Ansoff (1975

Bauer , A . a (1976

Buller (1991

Desai , A . B . a . R , Terri L (1997 . Global Ethics : An Integrative Framework for MNEs . Journal of Business Ethics , 791-800

Donaldson (1985

Ethics , C . f . B (1986

Frederick (1991

Fritzsche (1990

Lippit (1976

Rosario (1992

Schaeffer , A . a (1982

Singh , R . a (1991

Steiner (1976 GLOBAL ETHICS

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