Multinational Corporations Should Reduce Their Ethical Standards

1218 Words Oct 6th, 2015 5 Pages
A main reason why multinational corporations should reduce their ethical standards is because every foreign country has different ethical standards, and if they do not reduce their standards in that country it will be viewed as unethical to those citizens. MNCs need local citizens to help them compete in that local economy. If the citizens do not support the MNC then this could lead to a drop in sales causing a negative return on the investment into that country. For a multinational corporation to grow, maintain and earn a profit, they need to expand internationally. To achieve these goals if multinational corporations have ethical codes that are reduced and more flexible, they are more able to compete on a global scale.

If a company reduces their ethical standards it will help them during unfavorable economic conditions in a particular country. Reducing their ethical standards will also help them stay a float when cash flows are affected and returns are decreasing. When return is low and with lower ethical standards the company would be able to decrease wages of employees to help the company get out of their financial slump. One issue that this could lead to is disgruntled employees who may walk away from the company based on how the company treats its employees.

Even though the main goal of an MNC is to maximize their shareholders wealth, the managers who are in charge of the subsidiaries may not listen to the ehtical codes that the company has created. The managers…

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