For multinational corporations, corporate social responsibility and their business practices have resulted in numerous industrial problems. In this regard, the issues of whether multinational corporations are exempt from moral obligation or not have fascinated global attention. Attributable to the challenge that obscures enhanced intelligibility, in addition to company processes, the concern of moral obligation has attracted social, environmental, and ethical altercation. Presently, corporations are cognizant of the communal and environmental influence of their continued actions. It has been affirmed that multinationals should not only be lucrative but should also appropriately incorporate all citizens (Mujih, 2016). In the occurrence of globalization and mounting economy, corporations are highly apprehensive of their moral obligation. Ethical practices of multinational corporations have been found to strengthen their relationship with other companies, in addition to international function and growth. The moral obligation of multinational corporations acts as an endeavor through which their activities lead to increased happiness in developed nations through functioning prudently with respect to social and environmental impact. Since corporations operate in different nations, they are ethically bound to meet moral obligations as their practices influence the entire world.
Multinational corporations are not free from moral obligation. There are always some social anticipations from corporations, individuals, governments, and clients of their services and products. With regard to ethical boundaries, multinational corporations should act morally and the leadership of the company should be directed by standard norms of caring for the safety of their customers and the surrounding community. Some studies support the process of corporations escaping and evading regulations that move operations in numerous countries. Some multinational companies center in some regions mainly for cheap labor, over and above environmental regulations. Some corporations acquire cheap manual labor regardless of assuming high benchmarking roles (Kara, 2018). Such endeavors enable multinational corporations to sell their products and services internationally. For example, a motor vehicle company may choose to adopt New York’s car production techniques of selling their vehicles across the United States. In such cases, the law may deter corporations from upholding an exceedingly high standard in instances where social pressure has some influence.
Multinational companies have the moral duty of honoring and protecting the compacted civil liberties of employees in the international setting. Moreover, fundamental nutrition, freedom from torment, freedom of speech, and educational rights of children are major ethical deliberations across the globe. Nonetheless, in numerous nations around the world, multinationals bar residents from enjoying their basic rights. In many countries where citizens are denied fundamental rights, multinationals are required to check all their employees and open legal proceedings against potential wrongdoers (Mujih, 2016). For example, domestic violence and child labor are widespread in Central America and Korea respectively.
Multinational corporations have the moral obligation to decrease the participation of minors in paid jobs in their practices. Moreover, the welfare of employees is a vital moral responsibility that numerous multinationals should address. It has been established that in circumstances where multinational corporations are not under the obligation of underscoring morals in their tasks, companies usually operate against societal anticipations (Tregaskis & Almond, 2019). Multinationals have moral responsibilities in identifying employees’ freedom of physical movement. On this note, employees should not have a sense of being subjected to stringent regulations that hinder their movement from situations of the job. Furthermore, if corporations adhere to the set moral obligations, just trials, freedom from mistreatment, in addition to possession of properties are considerable liberties that their employees ought to enjoy.
Labor unions have a fundamental role in making sure that the rights of employees are supported and honored. In this regard, multinational corporations act as responsibility-bound to make sure that employees refrain from spirited campaigns and policies that bar the development of workers’ unions through influencing host nations to discourage their emergence. Companies have a moral responsibility of desisting from backing autocratic practices in upcoming democracies, over and above giving bribes to public representatives (Mujih, 2016). These tasks ensure that employees’ are not oppressed and their needs are satisfied.
Multinational corporations are often deemed powerhouses in their operations across the globe. Although in some nations companies have their monopoly in certain facets, a point of concern is that corporations should not practice unjustifiable rights. They are not free from all moral responsibilities, and cannot practice whatever they desire. Moral responsibility and business ethics are crucial for operations in corporations, particularly because companies exercise supremacy over one another and should abide by international laws and directives (Chan & Ananthram, 2019). Moral obligation is vital since it makes multinational corporations around the world abide by all the facets associated with business ethics. Executives in some corporations wrongly think that meeting ethical and moral obligations is a negative approach to decreasing their profitability since it is an additional expense to be incurred. Nevertheless, multinational corporations across the globe have to accomplish moral responsibility to succeed in both the short and long term. By satisfying their moral obligation, organizations can facilitate their operations and draw a high number of customers. This is particularly one of the rationales behind customers across the globe being inclined towards companies that stick to vital guidelines such as corporate social responsibility, disclosure requirements, moral obligation, and accounting principles.
A different moral aspect that multinational corporations need to be concerned about is the tax duty. In huge corporations, profitability is exceedingly high. Nonetheless, the majority of them are not ready to pay the high tax to the local government. Therefore, they will attempt to decrease or fail to pay all the taxes. In some instances, they reduce their profitability to less than the amount for which tax is payable. When corporations undertake such operations, it appears as a form of theft or robbery (Lodge & Wilson, 2016). In other cases, some organizations shift all their profits to other countries that are tax-free. Several multinational corporations have established virtual offices in Panama. Additionally, such corporations transfer all their profits to Panama and evade payment of taxes from the nations in which they are carrying out their operations. Nevertheless, many of the nations that multinational corporations are doing business are underdeveloped countries. Such nations require revenue from taxes to utilize for purposes of public service. They require funds to support their healthcare systems, transportation, and education to mention a few. In this regard, moral obligation is vital to make sure that money from taxes is not lost.
In the era of globalization, corporations are highly worried about their moral obligation. Ethical practices of corporations have been found to reinforce their relationship with other companies, in addition to global function and growth. Since companies operate in different nations, they are morally bound to meet ethical obligations as their practices sway the entire world. Through fulfilling their moral obligation, organizations can facilitate their operations and attract a high number of consumers.
Chan, C., & Ananthram, S. (2019). Religion-based decision making in Indian multinationals: A multi-faith study of ethical virtues and mindsets. Journal of Business Ethics, 156(3), 651-677. Web.
Kara, P. (2018). The role of corporate social responsibility in corporate accountability of multinationals: Is it ever enough without ‘hard law’? European Company Law, 15(4), 118-125.
Lodge, G., & Wilson, C. (2016). A corporate solution to global poverty: How multinationals can help the poor and invigorate their own legitimacy. Princeton University Press.
Mujih, E. (2016). Regulating multinationals in developing countries: A conceptual and legal framework for corporate social responsibility. Routledge.
Tregaskis, O., & Almond, P. (2019). Multinationals and skills policy networks: HRM as a player in economic and social concerns. British Journal of Management, 30(3), 593-609. Web.