Professional Ethics

and
Human Values
Topic: Multinational Corporation

From,
Ashwija L A
Bhavani S
Bhumika K N
Chethan M S To,
Mrs. Rachana C R
HOD of Computer Science
Department
Topics:

 Introduction
 MNCs and Morality
 Case Study: Bhopal Gas Tragedy
 Ethical Balance
Introduction:

 It is a company that has business operation in atleast one country other than its
home company.

 Generally the multinational corportions as its headquarters in one country and

operates wholly or partially owned subsidiaries in other country.

 Ex: Apple,Amazon,Microsoft,Mcdonald’s,Volkswagen all these companies are

headquatered in one nation but have operating divisons in many other countries in
order to expand their business and to reach more customers .
 The western organization doing business in the less economically
developed(developing and overpopulated)countries given advantages of
* Inexpensive labour
* Availability of natural resources
* Conductive tax atmosphere
* Virign market for the products

 At the same time the developing countries are also benefitted by the fresh job
opportunities like jobs with higher remuneration,transfer of technology and
several social benefits by the wealth developed.

 But,all this happens invariably with some social and cultural disturbance,loss of
jobs for the home country and exploitation of natural resources,political
instability for the host countries.
MNCs and Morality

Multinational institutions have to adopt appropriate measures not to disturb or dislocate

the social and living conditions and cultures of the home countries.

Principles to be followed by the MNCs

 Basics and human rights should be respected

 Activities of the MNC should give economic and transfer technical benefits
 Improve and promote morally justified institutions
 Must respect the laws and political set up
 Providing a fair remuneration to the employee
 Providing necessary safety for the worker
Case Study: Bhopal Gas Tragedy

The Bhopal disaster or Bhopal gas tragedy was a chemical accident on the night of 2–3
December 1984 at the Union Carbide India Limited (UCIL) pesticide plant in Bhopal,
Madhya Pradesh, India. Considered the world's worst industrial disaster,
[1] over 500,000 people in the small towns around the plant were exposed to the highly
toxic gas methyl isocyanate (MIC).
[2] Estimates vary on the death toll, with the official number of immediate deaths being
2,259. In 2008, the Government of Madhya Pradesh paid compensation to the family
members of 3,787 victims killed in the gas release, and to 574,366 injured victims.
[3] A government affidavit in 2006 stated that the leak caused 558,125 injuries, including
38,478 temporary partial injuries and approximately 3,900 severely and permanently
disabling injuries.
[4] Others estimate that 8,000 died within two weeks, and another 8,000 or more have since
died from gas-related diseases.
Case Study: Bhopal Gas Tragedy
The cumulative effects of the following factors caused the tragedy in Bhopal on December 3,
1984.
1. Maintenance was neglected and the trained maintenance personnel were reduced as
economy measure. Need for quick diagnosis aggravates the situation by causing
considerable psychological stress on the plant personnel.
2. Training activities for the supervisory personnel were stopped. This led to inadequate
training of the personnel to handle emergencies.
3. Periodical Safety Inspection teams from U.S. which visited previously were also stopped.
From the initial U.S. Standards, the safety procedures were reduced to low level Indian
standards. The procedures had been deteriorating at these sites for weeks or months,
prior to the accident. There was clear lack of management systems and procedures to
ensure safety.
4. Vital spares for equipments and machineries were not available.
5. Absence of capital replacement led to the stagnant economy of the plant.
6. The high turnover of the experienced engineers and technicians, who were demoralized
by the lack of development.
7. Lack of experienced personnel to operate and control the vital installations.
8. They have not conducted a thorough process hazards analysis that would have exposed the serious
hazards which resulted in disaster later.
9. No emergency plan was put in practice, during the shut down and maintenance.
10. Above all, the commitment of top-level management to safety was lacking. They have been
paying only lip service to safety of people of the host country.

WHAT DID WE LEARN?

The main lesson to be learned from the Bhopal Gas Disaster is about the dangers of the
chemicals that we use everyday. Now we know about what the chemicals we use on a regular
basis can do to our bodies and surroundings. The world had to learn the hard way how
chemicals can harm future generations.
Ethical Balance

Should an organization adopt the rules and practices of the host country fully and face
dangers and other serious consequences or adopt strictly their own country’s standards
and practices in the host country?

There is a saying, “When in Rome do as Romans do”. Can this be applied in the case
of MNCs? This is called ethical relativism.

On the other hand, the organizations may practice laws of the home country, without
adjustments to the host culture. This stand is called ethical absolutism.
Hence, MNCs may adopt ethical relationalism (contexualism) as a compromise.
Moral judgments are made in relation to the factors prevailing locally, without
framing rigid rules. The judgments should be contextual and in line with the customs
of other cultures.

The ethical pluralism which views more than one justifiable moral solution is also
adaptable. This principle accepts cultural diversity and respects the legitimate
cultural differences among individuals and groups, of the host country.
THANK YOU