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Multinational corporations have taken advantage of the concept of international integration, and global village to expand their operations in foreign countries. These are business enterprises, whose operations take place across the globe, and in almost if not all continents. Examples of prominent multinationals include Coca Cola, British-American tobacco, Price House Water Coopers, Barclays bank limited, Citigroup limited, and Wal-Mart among others. Regardless of their input to the augmentation of the globe economy, and the flow of capital and the human mobility of human resource capital, there are various moral challenges these corporations come accross. These corporations operating in different countries face different moral standards as outlined by the authorities and business unions in those countries.
The multinational companies encounter various moral related challenges in their operations. The culture of ethical practices in all countries of operation is an extremely challenging and complex issue for multinationals (Mahmood, Claude & Kennedy 2003, p.967). Another challenge is the legal compliance to some complex legal obligations outlined in different countries of their operations. The other challenge is to impact a sense of social, corporate value among employees in different countries, and cultural briefs and practices. Observing business ethics will to some extent assist these organizations overcome these challenges.
The main aim of starting business operations in the overseas market is to make profits and maximize value for the investors. They devote and sacrifice their resources as well as taking the risk in the foreign investment. These corporations may only focus on the profit making while undermining ethical practices. In this case, there are various issues through which multinational compromise moral standards. First, some companies tend to produce inferior goods particularly, in the markets where there are no substitutes for their products. These inferior goods are cheap to produce, but their prices still remain high; such a company earns high profit margin. In this case, they endanger the life and well-being of their consumer, which is morally wrong.
Profit oriented multinational companies lack the moral values on how they treat their human capital. Wages paid to employees are exceptionally significant, as they are one of the largest overheads to these corporations. There are numerous complains from workers in most multinationals, about the mistreatment they face at their workplace. For example, there are various reports from Coca Cola Company in different nations of unfair pay, working hours and poor working conditions. Recently Wal-Mart has admitted some allegations at court of law and paid millions of dollars to mistreated employees (Sellers, 2011). In all of these cases among others, employees are underpaid, overworked, and their working conditions are extremely poor, in the attempt by corporate to cut down their cost of production.
Another moral challenge on profit oriented multinationals is the social responsibility undertakings, such as employees benefit plans and environmental care (Mahmood, Claude & Kennedy 2003, p. 976). Most international corporate have extremely poor or non employees benefits, such as retirement or retrenchment. When their employees grow older or incapable to remain active and relevant to the organization, they get dispersed with little or no benefit. These corporations argue that it is incredibly expensive to introduce and maintain benefits programs for these workers.
On the other hand, it is morally expected that multinationals should take responsibility of the environment in the countries they operate. These responsibilities include proper disposal of waste products and conservation programs. These programs are expensive and hence, profit reducing thus; exceptionally few multinational companies undertake them. Some international companies dispose their harmful chemical waste products into rivers, streams, sea and oceans, polluting water for both domestic and commercial use (Mahmood, Claude & Kennedy 2003, p.986). On the other hand, some with solid waste products dump them on extensive peaces of land destroying vegetation and reducing land productivity. For example, in India there have been several demonstrations against Coca Cola Company particularly, the bottle factories, on the way they dispose off their waste products, destroying land and water sources.
Multinational corporate have the moral obligation to adhere to laws of the states where they undertake their operations. The legal systems incorporate several issues, which challenge operations of multinationals. Issues such as fraud, harassment, and recklessness among others are integrated in the legal systems of many countries. The provisions of law in different nations differ in their extent and content. Law systems, procedures and provisions, are extremely rigid, bureaucratic, and technocratic in nature. This challenges some of the multinationals, who eventually have been accused, and legal action has been taken against them by individuals and trade unions.
It is morally unacceptable to use illegal labor, for example, the use of illegal immigrants and slaves (Cragg 2005, p.243). There are various allegations that some multinationals have been using some of these illegal sources of labor. They prefer these sources, because they are cheap and the laborer in this category may not be ready or are ignorant of their rights. This cheap labor is acquired through labor agents, who arrange for the movement of these laborers from poor families and regions. A living example, is the Wal-Mart corporate where in the year 2003, the government officials raided over sixty stores in United States, and arrested more than two hundred nightshift employees (Sellers, 2011). These employees were illegal migrants, who found their way to United States through labor agencies. Further investigations found no documentation about these laborers in the human resource management systems of the company.
It is the moral responsibility of corporations, individuals and the government to ensure that children get enough attention, and chances to establish their live foundation. It is exceedingly unfortunate to state, despite the fact that the international labor laws prohibition on child labor; some multinational do not adhere to this law. Children are used as a source of cheap labor to multinational corporations; these companies should be on the fore line to assist the needy (Prakash & Williams 2000, p.18-25). These children work for long hours while they are paid peanuts by these corporations. It is extremely frustrating, to mention that some of these children do not have time for a break, and sometimes they work without breaking for a meal. Example of companies accused of child labor in the international scene includes Blue jeans Corporation limited, particularly in china and Indonesia. Coca cola is another multinational company accused of child labor and exploitation, in the southern part of America and Asia.