Multinational Organizations
Multinational Organizations
Introduction
In the current world of globalization, different organizations have established working oversees in order to create market segment for their operations. As organizations expand in their operations, oversees environments pose moral challenges to these organizations something that make it difficult for these organizations to operate effectively. There are many reasons why organizations in such environments encounter challenges. Some of the common reasons behind these challenges include business working standards, cultural diversity, government regulations, and trade barriers that exist in a given region. Evidence shows that multinationals face different moral challenges which make them lower their operation standards. This essay will focus on this concept and identify the role of business ethics in multinational organizations. It will also look at suggested moral standards that guide multinational organizations during business operation and survival in overseas.
Discussion
Multinationals face different moral challenges which make them lower their operation standards. Operating overseas for most organizations develops moral challenges. This is due to the fact that operating standards and regulations are not the same something that makes it difficult for the company to have a healthy, working environment. Study shows that the current globalization has made organization go for overseas operations in order to secure their market segment. During their operations, they are expected and required to adhere with the setting of the country they want to establish their operations. This is something that creates challenges simply because an organization may fail to meet standards of such an environment. In most cases, developed countries have gone to establish their operations in developing countries. Such two environments may be different for organization something that forces an organization to lower its standards of operation in order to suit to the environment setting. These moral challenges affect an organization, but on the other hand, they are suitable for that given environment, (Chhabara, 2008).
Multinational organizations are those companies that operate outside the country of origin. This means that they are control in their mother country, but their operations are based in other countries. In search of cheaper law materials, lower labor costs, and bigger markets, globalization have enabled organizations venture overseas in order to make more profits. Evidence shows that, the more multinationals seek entries in different countries the more moral challenges develop something that makes it difficult for their operations. Even if, an organization operates in one country moral issues still arise simply because the country has more than one culture. Under the cultural context, multinationals face moral challenges due to ethical and moral standards that are set by these organizations, (Frederick, 2005).
Since organizations must operate in those organizations despite the issue of ethical and moral standards, multinationals develop strategies to ensure that appropriate measures are established and followed. This is the role of business ethics in the business operations. On top of that, multinationals have ethics and moral standards that they must adhere to have a reliable working environment. Standards provide rules and directions on how an organization should establish its working conditions even if there are ethical challenges in the given organization setting. Stability is required in business operations in order to ensure continuity of the organization. Resolving and handling moral challenges is one of the key issues for multinational organizations. The role of business ethics is to establish a well defined environment that guide multinationals in their overseas operations, (Jonathan, 2000).
Bribery: Moral challenges in the current globalization world affect operations of businesses that seek an extension in overseas countries. Although some companies may wish to live in moral expectations, moral challenges prevent these companies from developing a healthy working setting. When we think of operating in other countries, we think on how to be friend countries that we aim to develop business operations. Bribery is one of the key aspects that affect the current world of operations. Most companies are going for bribery activities in order to get working permits to survive in a given environment. Bribery of government officials is one of the key moral challenges in the current business setting. Most companies lower their working standards by bribing government officials in order to get pathways of establishing business in the country of choice. This is one of the moral challenges that have affected the industry of business operation for the last few years. Evidence shows that bribery is among the outlawed aspect in the current global world, but most companies face challenges of operating in foreign countries, (Solomon, 2007).
Universal Moral Principles: Operating overseas requires skills and knowledge of a given environment setting. Cultural relativism is another moral challenge that faces multinationals when operating overseas. Study shows that moral values differ from one culture to another thus an organization may find it difficult to cope with moral values of another society. In business operation, no single rule has come across that defines how organizations should morally operate. This means that since there are no standard moral guidelines, organizations find it difficult to cope with morals of another country. This is a problem that has affected multinationals when establishing their operations in others countries. Cultural environments shape cultural practices and that are the reason which makes it difficult for multinationals to fit in a given cultural setting. Cultural relativism forces an organization lower its operating standards in order to suit with the culture of the country it has selected, (Frederick, 2005).
Most companies are driven by the concept of profit something that makes them temper with their standards lowering to a point where their adopted morals allow them operates within the business operations. Evidence shows that people have withdrawn from the fear of God when operating their business, but the only fear they have is the punishment of the government. This situation forces organizations to lower their standards in order to secure operation rights in the country they want to establish operations, (Chhabara, 2008).
Business ethics plays a vital role in organization setting. In business environment, organizations do not fear punishment of God thus they have no value of ethics in business operations. Business ethics establishes guidelines and roles that govern operations of a business entity. Business environment is made of different organizations that have different missions, objectives, and goals. Multinationals establish new markets in search of cheap labor, law materials and expand their operations. Since multinational organizations enter into new cultural setting, business ethics should establish strategies that govern multinational companies. It is necessary for multinationals to understand how to conduct their operations in order to prevent issues occurrence of moral challenges. The work of business ethics in a multinational organization is to create strategies of operations for the company and for the country where the business is established. The role of business ethics is to create an environment that educates leaders in the organization on how to establish a well defined working setting, (Fieser, 2010).
Multinational organizations should ensure that they create an environment that enables them achieve their goals of operations in foreign countries. It is necessary for multinationals to establish moral standards that go in line with the country they want to develop their operations. One of the moral standards for the company is ensuring that no bribe practices are established with the operation environment. An organization should ensure that operations adhere to cultural requirements of the company in order to ensure all aspects are met and catered in the appropriate manner. The main objective of most multinational organizations is to achieve high profits at the lowest cost possible. Moral standards call such organizations to ensure that they have established fair working environment that does not affect cultures of countries they have established their operations, (Jonathan, 2000).
Conclusion
Multinationals face different moral challenges which make them lower their operation standards. Due to the cultural setting, evidence shows that organizations fail to establish appropriate working environment because the aim of the company is to maximize their profits. Business ethics should establish strategies that guide operations of organizations.
Reference:
Chhabara, R. (2008). Brand marketing—catering for local tastes. Ethical Corporation. Retrieved from, http://www.ethicalcorp.com/content.asp?ContentID=6200, On December 15, 2012
Fieser, J. (2010). Business Ethics. Retrieved from, http://www.utm.edu/staff/jfieser/vita/research/busbook.htm, On December 15, 2012
Frederick, W. D. (2005). Power aggrandizing values of business. Values, Nature, and Culture in the American corporation: New York, NY: Oxford University Press, pp. 57–76
Jonathan M. K. (2000). Regulation vs. Reputation in Preventing Corporate Fraud: UW Business, Spring; pp. 28–30
Michael K. M., Karl E. R., & Schroeder, D. (2008) “Ethical Pressures: Fact or Fiction?”Management Accounting74, no. 10, pp. 57–61.
Solomon, R. C. (2007). Ethics and Excellence: Cooperation and Integrity in Business: New York, NY: Oxford University Press
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