As companies of all sizes join the global economy, questions of ethics abound. There are four main challenges multi-national corporations (MNCs) must face regarding how to ethically conduct business in less developed countries. These challenges all revolve around the idea that some standard of ethics should be adhered to when conducting business. The absolutist position believes that business should always be conducted to the highest standards all over the world. This theory is opposed by the relativists who believe that the only standard that matters is the local standard (Boatright, 2007).
There are four considerations that an MNC must take into account when deciding how to conduct business ethically in a less developed country. The first consideration is morally relevant differences. Because of the socio-economic conditions of Third World countries, actions that would be considered unethical in the United States are morally required. The example that Boatright (2007) uses regards the use of prescription drugs in Bolivia. Powerful antibiotics have been used in Bolivia in cases that would not be allowed in the United States. Unfortunately, the state of health care in Bolivia is such that by the time a patient is able to accept treatment, they must use the strongest available medication to ward off a multitude of health issues. In this case, although the action taken by the pharmaceutical company would be disallowed in the United States, it is saving lives in Bolivia (Boatright, 2007).
The next challenge is to accept a variety of ethical outlooks. The absolutist philosophy tends toward ethnocentrism. The belief that one culture’s norms is morally superior to another is a form of discrimination. In Japan, gift giving is a form of relationship building, similar to the America tradition of “doing lunch.” In the United States, this sort of gift giving would be considered bribery and result in disciplinary action (Boatright, 2007). In his travels, Georges Enderle (2006), a professor of business ethics, has found that all countries believe their ethical standards are superior. MNCs must maintain an open-minded approach to the host country’s culture in order to be successful.
Another challenge when conducting international business is accepting the people’s right to be involved in decisions that affect them directly. In other words, assuming that basic human rights conditions are met, it should be the responsibility of the local government to determine the standards of less developed countries. If the people have adequate voice in the government, then MNCs have an obligation to meet the standards imposed by their government. This should not be seen as carte blanche to behave in a way that would be unacceptable in the First World, but the local standards should be given due respect and tempered with the ethical mores of the First World (Boatright, 2007).
The final ethical challenge faced by international businesses is dealing with the local requirements to do business. There are times when the government will impose requirements on MNCs that must be met or the MNC will not be allowed to operate within the country. Boatright (2007) gives the example of Arab countries not allowing women or Jews to work on sites operated by MNCs. In the United States, this constitutes a form of discrimination and would be clearly illegal. Fortunately, these cases are rarely of the all-or-nothing variety. Still, MNCs must decide whether the requirements of the host country are morally reprehensible before proceeding (Boatright, 2007).
Boatright, J. (2007). Ethics and the conduct of business, 5th ed. Upper Saddle River, NJ: Pearson.
Enderle, G. (2006, September). Other People’s Ethics. BizEd, 5(6), 25-25. Retrieved June 20, 2008, from Academic Search Premier database.