WELCOME TO PRESENTATION

Course Title: Business Ethics

Topic: Business Ethics in Multinational Company

Prepared for
Adnin Rifat
Lecturer, Finance Discipline
Department of Business Administration
Premier University
 PREPARED BY
Name ID
1. Izaz Mohammad Sohel O222210004083090

2. Md Sajadur Rashid O222210004083097

3. Nurul Arefin O222210004083088

4. Shahed Arman O222210004083100

5. Sowmitra Barua O222210004083081

6. Uttsha Mallick O222210004083093

7. Mohammad Soharub Hossen O222210004083079

BUSINESS ETHICS
 Business ethics are principles of right or wrong
governing the conduct of business people.
 The text says, “the accepted principles of right
and wrong”.
 But there are many differences of opinion among
highly ethical businesspeople
MULTINATIONAL COMPANY(MNC)
 A multinational company (MNC) is a corporate
organization that owns and controls the
production of goods or services in at least one
country other than its home country.
 MNC can have a positive economic effect on the
country where the business is taking place.
BUSINESS ETHICS IN MULTINATIONAL COMPANY

 A multinational corporation's (MNC) ethical and

social responsibility issues must be an integral
part of its strategic management process. The
MNC headquarters (HQ) must decide on its core
ethical and social responsibility values and
priorities, and, it should empower its foreign
units to formulate their specific programs and
strategies to respond to changing host countries'
environments.
BUSINESS ETHICS & MNC
 Promoting a global corporate culture
 Establishing a corporate-wide code of conduct
 Involving local offices in local policies
 Engaging global employees in ethics and compliance
 Establishing a local presence by forming a corporate-
wide ethics and compliance committee
 Educating all employees in their first language
 Building culturally responsive reporting systems
RELIGION, ETHICS, AND GLOBAL DIVERSITY

 The world has many different ethical systems

 Mostly derived from different religions
 Different systems can lead to different opinions
about what is ethical
DON’T START BUSINESS WITH ANYONE UNLESS YOU
BELIEVE THEY HAVE STRONG ETHICS

• Work hard to understand your own ethics

• Work hard to apply them
• Work hard to understand others’ ethics
ETHICAL DILEMMAS

• Managers must confront very real ethical

dilemmas
• The ethical obligations of a multinational
corporation toward employment conditions, human
rights, corruption, environmental pollution, and the
use of power are not always clear cut
• Ethical dilemmas are situations in which none of
the available alternatives seems ethically acceptable
ETHICAL ISSUES IN MULTINATIONAL COMPANY

• Many ethical issues and dilemmas in international business are

rooted in the differences in political systems, law, economic
development, and culture from nation to nation
• We face ethical issues involving
• Employment practices
• Human rights
• Environmental regulations
• Corruption
• Moral obligation of multinational corporations (social
responsibility)
SOME KEY ETHICAL ISSUES IN MULTINATIONAL COMPANY

Employment practice

Human rights

Environmental pollution

Corruption
Social responsibility
EMPLOYMENT PRACTICES

• When work conditions in a host nation are clearly

inferior to those in a multinational’s home nation,
what standards should be applied?
• Few would suggest that pay and work conditions
should be the same across nations
• How much divergence is acceptable?
HUMAN RIGHTS
 Basic human rights still are not respected in many
nations
 Rights such as freedom of association, freedom of
speech, freedom of assembly, and freedom from political
repression are by no means universally accepted.
 The question that must be asked of firms operating
internationally is: ‘What is the responsibility of a foreign
firm in a country where basic human rights are trampled
on?’
ENVIRONMENTAL POLLUTION
 Environmental regulations (or enforcement) in host nations may
be inferior to those in the home nation.
 This means multinationals can produce more pollution than
would be allowed at home.
 Environmental questions take on extreme importance because
parts of the environment are a public good that no one owns, but
anyone can despoil.
 The tragedy of the commons occurs when a resource held in
common by all, but owned by no one, is overused by individuals,
resulting in its degradation.
 The water in the Mekong River
CORRUPTION
 Corruption has been a problem in almost every society in history, and it
continues today.
 Multinational company can, and have, gained economic advantages by making
payments to government officials.
 The United States passed the Foreign Corrupt Practices Act to fight corruption.
 Outlawed the paying of bribes to foreign government officials to gain business.
 In 1997, the trade and finance ministers from the member states of the
Organization for Economic Cooperation and Development (OECD) followed
the U.S. lead and adopted the Convention on Combating Bribery of Foreign
Public Officials in International Business Transaction.
 Obliges member states to make the bribery of foreign public officials a criminal
offense
SOCIAL RESPONSIBILITY
 Multinational corporations have power that comes from their control
over resources and their ability to move production from country to
country.
 Moral philosophers argue that with power comes the social
responsibility for corporations to give something back to the societies
that enable them to prosper
 Social responsibility refers to the idea that businesspeople should
consider the social consequences of economic actions when making
business decisions.
 Advocates of this approach argue that businesses need to recognize
their noblesse oblige (benevolent behavior that is the responsibility of
successful people and enterprises)
IMPORTANCE OF ETHICS MULTINATIONAL COMPANY

To function effectively, a business organization needs a

common system of moral and ethical beliefs to drive
and direct the day-to-day decisions made by individuals
throughout the operation. Many ethical requirements
are dictated by laws and regulations, such as
environmental protections and worker safety rules.
Management leadership demonstrates and promotes
other ethics in multinational company, modeling ethical
behavior and decision-making for employees.
THE ROOTS OF UNETHICAL BEHAVIOR

 Why do managers behave in a manner that is unethical?

•Business ethics are not divorced from personal ethics
•Businesspeople sometimes do not realize they are behaving
unethical because they fail to ask if the decision is ethical
• The climate in some businesses does not encourage people to
think through the ethical consequences of business decisions
Pressure to meet unrealistic performance goals that can be
attained only by cutting corners or acting in an unethical
manner.
BUSINESS ETHICS OF CADBURY
Cadbury believes that good ethics and good business go
together naturally to produce the best long-term results for all
the stakeholders. This means everyone in Cadbury acts in an
ethical way to protect and promote the company and its
reputation among the people and communities it does business
with. Cadbury maintains ethical sourcing standards and
develops sustainable agriculture programs such as the ‘Cadbury
Cocoa Partnership’. Cadbury recognizes its environmental
responsibilities. It reduces environmental impact, in particular
targeting carbon, packaging and water use, within its broad
‘Purple Goes Green’ environmental program
BUSINESS ETHICS OF NESTLE
Nestle is the world’s leading nutrition, health and wellness company.
With over 276,000 employees, the company has operations in almost
every country in the world. The people know more by brands and the
portfolio covers practically all food and beverage categories, with
market leaders like Nestle, DRUMSTICK, NESCAFE,
STOUFFERS, KITKAT, Nestle GOODSTART, Nestle PURE LIFE
and PURINA , to name a few. Since its founding, Nestlé’s business
practices have been governed by integrity, honesty, fair dealings and
full compliance with all applicable laws. Nestlé’s employees
worldwide have upheld and lived this commitment in their everyday
responsibilities ever since, and Nestlé’s reputation remains one of the
Company’s most important assets today.
RECOMMENDATION
Today's MNCs are desperately seeking many ways to ensure their own
survival. They no longer can survive by considering only their own and
their national interests, but they need to be good citizens in their host
countries as well. They have to receive full support from the engineering
community and customers in order to be successful. Hence they are
establishing better engineering and science relationships with local
communities. Strategic alliances in business and technical development
constitute a step forward. The next step should be the establishment of
symbiotic competition. As the current trend continues, nationalistic
political powers may not be able to break up international collaboration
networks and world peace may be advanced. We may also be able to
secure comprehensive national security.