Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.3/49086

Title

Global ethical challenges and multinational enterprises' strategic responses

Author(s)

Saee, John

Abstract

There has been a sea change in the world economy, with perceived far-reaching consequences on all aspects of human civilisation. This dramatic transformation is largely precipitated by the phenomenon of globalisation. The transformation now taking place in the global economy is unprecedented. The increasing availability of global capital, coupled with advances in computing and communications technology, is serving to speed up the processes of globalisation. Concurrently, the barriers to globalisation are increasingly disappearing in most countries of the world (11). As a consequence, the word 'globalization' is in daily use throughout the world: mondialisation in France, Globalisierung in Germany and Quan qui hua in China. Multinational enterprises (MNEs) and entrepreneurs alike are increasingly capitalising on unprecedented business opportunities around the world which are spawned due to globalisation of national economies. With that in mind, MNEs and entrepreneurs need to exercise due diligence in conducting their businesses in a socially and ethically responsible manner internationally, as unethical business practices are not going to helpful to the sustainability of business enterprises strategically. Ethical behaviour of businesses has become a major issue throughout the world; when a business behaves unethically it is widely publicised by the media to concerned citizens. Examples of unethical business behaviour that are widely condemned include poor working conditions; low wages; enforced overtime; harsh, sometimes brutal, discipline and corporal punishment; bribery; patent or copyright infringements; lying and deceit about product performance and safety; deliberate use of harmful substances; intentional environmental pollution; discrimination; and violation of promises. Enron is a prime example of a multinational with serious ethical dilemmas. It has been dubbed 'one of the worst corporate frauds in history'. But how did they get away with it for so long? In part, flaws in the American legal system are to blame. Enron had the means to audit its own information and its own pension funds, and the opportunity to employ its own auditors/accountants. Personal greed and the need for power were also to blame. Executives covered their tracks by cooking the books and by acquiring many firms, in order to make it seem like the company was booming. But could it have been prevented? Prior unethical behaviour within the firm was uncovered after the bankruptcy. White-collar crimes were not harshly punished in those days, and didn't serve as a deterrent for unethical behaviour (73; 74). In this research article, an examination is made of ethical practices and propensities across nations that have considerable implications for MNEs and global entrepreneurs. The world is becoming more and more interdependent due to the increasing globalisation of world economy, mass migration, tourism and worldwide application of information technology, coupled with increasing regional and worldwide cooperation. Thus, MNEs, including entrepreneurs, are now operating within different socio-cultural environments involving people of culturally diverse backgrounds. This can also give rise to many ethical problems facing MNEs and global entrepreneurs and international firms operating in different countries. Some ethical dilemmas may include bribery, deceit/false information, anti-competitive behaviour, discrimination, environmental issues and social responsibility.

Publication type

Book chapter

Research centre

Swinburne University of Technology. Faculty of Business and Enterprise. Australian Graduate School of Entrepreneurship

Source

Contemporary corporate strategy: global perspectives, Chapter 5, pp. 76-89

Publication year

2007

Keyword(s)

Corporate fraud;  Corporations;  Economics;  Enron;  Globalisation;  International business enterprises;  Management;  MNEs;  Multinational enterprises;  Social responsibility;  Strategic planning;  Strategies

Publisher

Routledge

ISBN

9780415385954, 0415385954

Publisher URL

http://www.routledge.com/0415385954

Publisher URL

http://books.google.com/books?id=OXNwE9txe24C

Copyright

Copyright © 2007 John Saee.

Peer reviewed