This document discusses several ethical issues confronting multinational corporations (MNCs). It addresses concerns around child and forced labor, differing safety and security standards between countries, and long work hours required in some less developed countries. It suggests that MNCs should establish clear codes of conduct addressing these issues and outlining their stance in various ethics-related situations. Corporate social responsibility and balancing profits with good citizenship is also discussed as an increasing challenge for MNCs. Competition from local companies is presented as another challenge, with examples given of Indian companies that have stood up successfully to multinational competition.

1. 1) Some Ethical Issues Confronting MNCs
 Child and/or Forced Labor
 Safety and Security Concerns

Duration of Work Week

2. Child and/or Forced Labor
 "MNCs may directly employ children (legally or illegally) and they
are usually employed in labor-intensive low-skill jobs.

Source of cheap, unskilled, and not-demanding labor.

Companies may buy products from factories employing children.
Eg. Nike

3. Safety and Security Concerns
 Major problem - because standards differ from country to country and
in some countries there are no clearly written standards.
 However in the United States, there are strict laws for safety and
security and companies try to respect them.
 For instance, Ames Laboratory fosters an environment in which
employees are encouraged to bring concerns to the attention of
their immediate supervisor. Resolution of concerns should occur at
the lowest management level possible. However, if the issue cannot be
resolved at this level, the employee has the opportunity to proceed
within his/her management chain

4. Duration of Work Week
 MNCs have been accused of allowing or even forcing their
employees, especially in less developed countries (LDCs), to work
very long hours.
 Lehmkuhl (1999) has explained that organizational culture can
contribute to long hours as this behavior is often valued and
expected in an MNC.

5. Solution
 Advisable that MNCs establish clear roles for ethical practices in their
host countries.
 To do that, MNCs must first study the laws of both the domestic and
host countries.
 They must draft a moral code of conduct with a well-defined
company’s standpoint in the event of certain ethics-related situations.

6. 2) Corporate social responsibility in a globalizing
market.
 CSR can be defined as the duty of organizations to conduct their
business in a manner that respects the rights of individuals and
promotes human welfare.
 Expectation is so high that it has become an issue/challenge in itself
for these MNCs.
 important decisions that often result in a major trade-off: increased
profits or good corporate citizenship.
 MNCs have been found to be "chasing the buck" without sufficient
regard for society.

7. 3)Competition as challenge to MNCs:-
 Indians are not Inferior (The Times of India, October 26, 1997):-
 false notions that Indian companies are incapable of standing up to
competition from multinationals.
 For e.g. Kwality ice-cream has been bought by Hindustan Liver,
 Reliance is already among the top five producers in the world of
polyester and chemicals like PTA. It is setting up a giant 22 million
tonne refinery, world’s biggest.
 The late Aditya Vikram Biria was once asked whether he was afraid of
multinationals. "No" he replied, "they should be afraid of me".