International Business Ethics

The question of what ethical norms, if any, should guide the conduct of business across national boundaries is the primary subject of international business ethics. We live in an era of increasing economic globalization. While trade among nations has been an important feature of the global economy for centuries, recent years have seen a rapid increase in international trade. Multinational corporations (MNCs) are powerful actors on this global stage, and their influence is increasing. Outsourcing of the production of consumer goods to developing nations is a standard feature of nearly all MNCs that design, market, and sell apparel, footwear, electronics, toys, and household goods. In response to increased demand for natural resources, MNCs in the extractive industries have increased their exploration and extraction operations throughout the world. And, increasingly, all MNCs that market to individual consumers are targeting relatively affluent consumers across national boundaries. These are staple features of the global economy. Typically such globalizing strategies enable MNCs to meet increased demand, offer goods and services to customers at lower prices, and at the same time enhance their own profits.

MNCs operate in a multitude of political jurisdictions and so are subject to a multitude of legal frameworks. Frequently, the laws regarding matters such as the treatment of customers, the treatment of employees, and protection for the environment are significantly different in different host nations. In the case of developing economies, consumer protection, worker safety, and environmental safeguards are often poorly developed or nonexistent. Even when such laws exist in developing nations, the law enforcement and judicial apparatus necessary to ensure compliance does not exist. MNCs operating in such nations are often free to [Page 1161]determine for themselves whether or not they will adhere to host nation laws. As a result, MNCs must determine for themselves what minimum moral standards ought to be adhered to in their global operations.