Business Ethics for the 21st Century: Chapter 2 (pp. 47 - 54): "Multinational Corporations and Ethical Relativism"

1. Globalism and the "Global Economy"

Companies operate factories, hire workers, and sell products in many countries with diverse cultures (customs). Problems arise in dealing with --

  1. workers rights [low wages, long hours, unsafe working conditions]
  2. environmental protection [pollution]
  3. consumer safety [marketing of unsafe products]

    [Question: What responsibility do corporations have to workers, other persons (society), and the environment? Does this responsibility vary from country to country or diverse cultures? How do persons in different cultures differ and how are they alike? Does the environment or natural ecosystem have different requirements in different countries?]

Profit-taking and/or promoting human rights, such as "freedom of expression, the right to organize, and the right to a livable environment."

2-3. Canonical Recommendations and/or Norms in Host Countries

According to the "canonical position of corporate responsibility," corporations should --

Existing laws and business practices in host countries are based upon needs of those countries to increase their wealth and to improve their economies. The host nation should decide which labor and environmental practices are best for it.

[Question: Is this an indication of a genuine concern for local custom, or is it a way for corporations to dodge ethical questions about human rights and environmental concerns?]

[Note on "The 'Good Guys' of the Garment Industry": How are these companies doing business now (e.g., Levi Strauss and Victoria's Secret)?]

4. Wage and Labor Standards

Some problematic examples of "cultural diversity" in labor standards:

Basic Dilemma (see text, p. 48): "Should a corporation operating in a number of different nations shape its policies and practices in each country to suit that nations's culture and practices? Or should it adhere to the stndards and norms prevalent in its home country, regardless of where it operates?"

[Question: Can you think of any instance where labor and environmental standards are higher in the "host" country than they are in the "home country"? In other words, do corporations seek out "host countries" where wages, labor regulations, and environmental protections are relatively high? Secondly, do rankings of "higher" and "lower" go against the notion of cultural relativism?]

5. Legal versus Ethical Concerns

Practices forbidden in the USA are allowed in other countries:

If a practice is not illegal in a host country, does that make the practice ethical?

[Question: Is the "is" the same as the "ought"? Is what is done the same as what ought to be done? Furthermore, what can one say about practices condemned in European countries, but allowed in the USA? Is the ethical standard the most stringent legal standard available? Volkswagen operated plants in the USA because it was cheaper to do so than in Germany.]

6. Cultural Relativism

Are there "absolutes" with regard to "working conditions," "environmental degradation," and "product safety"? Or, is it up to each culture to decide what is right in these areas?

[Questions: Is DDT good for some populations, but bad for others? Are certain types of equipment or machinery safe for some workers and unsafe for others? Are unventilated workplaces without fire protection good for some workers, but harmful to others? Can one even speak of "human rights" or "human rights violations" in an international sense? Is the world's ecosystem divided into countries, or is it a "global phenomenon"?]

Discuss the Levi Strauss solution on Page 50 ("Ethical Decisions at Levi's"). [Do you think that their "compromise solution" to the problem of child labor was appropriate?]


1-3. "Bribery is a practice involving the payment or remuneration of an agent of some organization to do things that are inconsistent with the purpose of his or her position or office." (p. 49) Examples are --

Laws against bribery are based on some possible harmful consequences of bribery:

What happens to the perpetrator of the bribery?

Discuss "Human Rights and Doing Business in Myanmar" (p. 51). To what extent can a climate of unethical conduct make doing business impossible? What made Unocal unlike the other companies?


1. Cultural Relativism: Conduct that is wrong in one culture might be regarded as right in another.

2. Belief relativism -- True and false, right and wrong, with regard to opinions or perceptions of reality, vary from culture to culture. [There is no absolute "truth."]

3. Value relativism -- Good and bad, with regard to conduct, vary from culture to culture. Infanticide, polygamy, or cannibalism might be acceptable in one culture, but unacceptable in another.

4. Thus, for the "value relativist" (cultural relativist), bribery can be wrong in some cultures, but right in other cultures.

5. Consequences of value relativism:

[See Relativism for definitions of cultural relativism and Relativism (terms and questions) for more questions regarding cultural relativism]

BRIBERY, SCANDALS, AND THE FCPA (Foreign Corrupt Practices Act)

1. Examples of bribery by U.S. companies:

In sum, 400 U.S. companies provided $300 million total in payoffs.

[Question: In the case of Lockheed, what happened to the notion of abiding by law and custom in the host country? Is this "canon" only accepted when it is convenient?]

2. In 1977, the Foreign Corrupt Practices Act (FCPA) was passed by Congress. Corporations opposed it because --

Discuss "The FCPA and Global Anticorruption Initiatives." What was the importance of the OAS Convention? To what extent do international agreements make value relativism less convincing?

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