Multinational Corporations
Richard T. De George
Are corporations that have operations in more than one country (host countries) but are con trolled by a headquarters in a home country. Multinationals have been the focus of three groups of ethical disputes.
1 By which rules are multinationals bound: those of the home country or those of the host country? One view defends the position that ‘‘when in Rome, do as the Romans do.’’ This is rejected by those who equate this view with ethical relativism and argue that although a company should obey local laws and customs whenever possible, a multi national may not, for example, employ forced labor or discriminate on the basis of race or gender, even if these practices are locally accepted.
2 The differential in power between large, powerful multinationals and less developed countries has led to such charges as exploiting labor and resources; undermining local cultures; raising expectations that cannot be fulfilled; ignoring the safety and health of host countries; and causing malnutrition and starvation by buying up the most productive land for cash crops. Multi nationals have an obligation to take special care when operating in less developed countries.
3 Because of the lack of adequate international institutions and laws, some charge that multinational companies can fix prices in transfer payments, avoid taxes, and circumvent national legal restrictions. The problems and temptations of multinationals have led to international and industry codes and other attempts at international control. Many companies of integrity, conscious of the ethical pitfalls facing multinationals, have adopted their own codes or guidelines to ensure ethical activity.
Bibliography
Barnet, R. J. and Ronald, E. M. (1974). Global Reach: The Power of the Multinational Corporations. New York: Simon and Schuster.
De George, R. T. (1993). Competing With Integrity in International Business. New York: Oxford University Press.
Donaldson, T. (1989). The Ethics of International Business. New York: Oxford University Press.
Hoffman, W. M., Lange, A., and Fedo, D. A. (eds.), (1986). Ethics and the Multinational Enterprise. Lanham, MD: University Press of America.