Should Mnc Reduce Their Ethical Standards Essay

1218 Words 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
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Corporate social responsibility is a growing topic throughout the whole world. More people are becoming concerned with how corporations are treating their employees, the community, and the environment. If corporations reduce their ethical standards then they will be affected by the social aspect that is constantly growing in the twenty first century.

MNCs have been increasing in globalization but most of them have their unique base of national identities. If an MNC reduces its ethical standards it could be vulnerable for any of the former operations and decisions that the multinational corporation has made. The ethical standards are related to all business activities because it is critical for making decisions and setting up strategies on how the corporation acts. It could cause sacrifices for a company if the ethical beliefs are changed because it hurts the current value that the company has established. It also brings out adverse effects on multinational corporation’s continuous development if the corporations or the individuals have some ethical
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In 1997, the Social Accountability International launched and constituted an international standards of social responsibility called SA8000 standards, which is aimed to ensure the products that corporations supply in the market are in accordance with the requirements of social responsibility standards. The social responsibilities mentioned here are included with culture, corporate environment, employee education, and economic liabilities etc. of almost all the areas that MNCs would involve. The European Union has also set the construction of socially responsible enterprise culture as an important mission to fund the newly emerging economies ("SA8000 Social Accountability"). It proves that the multinational corporations are required to maintain the basic ethical standards when operating their businesses. The laws and standards would also be functioned as the guidelines for companies to have a strong sense of ethical standards and help to create a positive corporate environment. With citizens across the globe pushing for more corporate social responsibility it is causing governments to take action on the topic. Over the past few decades laws, like the Sarbanes-Oxley Act, have been passed in multiple countries forcing corporations to become more transparent and more ethically

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