1. Ethics in Global Business
4.4 Global industries and companies (multinational corporations)

2. What you need to know a) Stakeholder conflicts
b) Pay and working conditions
c) Environmental considerations:
emissions
waste disposal
d) Supply chain considerations:
exploitation of labour
child labour
e) Marketing considerations:
misleading product labelling
inappropriate promotional activities

3. Moral guidelines which govern acceptable behaviour
What Are “ethics”?
Moral guidelines which govern acceptable behaviour

4. Ethical behaviour is doing what is morally right

5. Should MNCs Support the Shareholder Concept
“…the only one responsibility of business towards the society is the maximisation of profits to the shareholders, within the legal framework and the ethical custom of the country”
Milton Friedman

6. Acting Only in the Interests of Shareholders
Only concern is to create shareholder wealth
MNCs should not be restricted in terms of how they act
Not the job of MNCs to decide what is best for society
Around 1,300 companies control 80 per cent of global operating revenues, with 40 per cent of this controlled by only 147 organisations

7. Benefits and drawbacks of behaving ethically
Higher revenues – demand from positive consumer support
Improved brand and business awareness and recognition
Better employee motivation and recruitment
New sources of finance – e.g. ethical investors
Possible Drawbacks
Higher costs – e.g. sourcing from Fairtrade suppliers rather than lowest price
Higher overheads – e.g. training & communication of ethical policy
A danger of building up false expectations

8. Common Ethical Issues with MNCs
Pay & Working Conditions
Environmental Impact
Supply Chain Management
Marketing

9. MNCs, Ethics, Pay & Rewards
The ways that employees and management are rewarded can create significant ethical issues
The strong “bonus culture” in financial services is a good example of this
Driven by the incentive of large bonuses, do management cut corners or break the rules?
“Fat cats” – is it ethical that CEOs should be paid hundreds of more times better than the average for employees in their businesses?

10. Exploring the Alleged Use of Sweatshop & Migrant Labour by MNCs

11. Exploring the Damaging Impact of MNCs on the Environment

12. Some Examples of how Multinationals are Responding Positively

13. Global Business Ethics and the Supply Chain
A multinational business cannot claim to be ethical firm if it ignores unethical practices by its suppliers – e.g.
Use of child labour and forced labour
Production in sweatshops
Violation of the basic rights of workers
Ignoring health, safety and environmental standards
An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain – i.e.
Suppliers
Contractors
Distributors
Sales agents

14. An example of an unethical supply chain?

15. Brands that have been caught out using child labour or sweatshops

16. Some Multinationals Who Have Raised Ethical Issues with their Marketing