Discuss How Developing Countries And Developed Countries Pose Distinct Challenges For Multinational Enterprises’ Ethical Behaviour

Education Finance General Technology

. Discuss how developing countries and developed countries pose distinct challenges for multinational enterprises’ ethical behaviour? Using examples, discuss whether and how MNEs from developed countries adapt their ethical conduct and corporate social responsibility practices according to local expectations in developing countries. . Introduction Firms that operate internationally often encounter ethical dilemmas derived from differences in ethical principles/norms between home and host countries. What course of action is right or wrong is not always easy to ascertain when there is a disagreement in cultural values and interests. Whether multinational companies should adapt their behaviour to the local standards or follow the same universal principles upheld at home is an on going debate with no definite answer. As Donaldson (1996) agreed with the philosopher Michael Walzer, “There is no Esperanto of global ethics” . This essay commences by presenting some of the main theories regarding business ethics. After examining the ethical challenges that Multinational Enterprises (MNEs) face in a global context, it will be addressed in what degree MNEs adapt their activities to meet local values and norms. This essay also presents how some existing MNEs from developed countries have implemented their ethical strategies in developing countries. . Theories on Business Ethics Business ethics are the moral principles regarding right and wrong behaviours within a corporation. In an international context this is of particular importance as what is considered as good practice in one country may be considered unethical in another. This raises the question whether ethical principles should be adapted to local culture or whether moral principles are universal and should lead to the same behaviour around the world. Two different theoretical perspectives, relativism and absolutism, reflect both views (Cavusgil et al., 2013). . Cultural relativism follows the maxim “when in Rome do as Romans do”. Problems arise when dealing with ethically questionable practices that are common in developing countries. At the other extreme we find ethical absolutism, which advocates for the universality of ethical principles and seeks the promotion of common values around the world. Melé (2013) explores some of the approaches within both theories. . As relativism could be contradictory with some of the collectively accepted values of human rights, and it is problematic to agree on what the universal ethical norms ought to be, it seems that a balance position between both extremes could be the answer.  Donaldson (2006) advocates for this third perspective and recommends companies to…

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