Ethics, Social Responsibility and Sustainable Development


There is usually a myriad of difficulties faced by business organizations on matters of pertinent decision-making approaches regarding workers. One such dilemma is in the case when a business entity would like to improve its profits against the relevant strategies to put in place. For instance, retrenching workers can be one option. Alternatively, the company can decide to pay low wages to its employees or abandon the business venture altogether if it cannot make significant returns due to stiff competition. Despite such decision-making dilemmas faced by businesses, very limited time to reflect on the issue at hand and take the right step ahead often abounds. Therefore, it is likely that wrong decisions can be reached due to compromised business ideals. It is against this backdrop that business organizations should always have a comprehensive ethical framework which can be used as a template in decision making.

On the other hand, the global sustainable development is one subject that has been vastly debated by different players ranging from governments, non-governmental organizations to multinational companies. Several international summits have quite often deliberated upon how best each of the aforementioned stakeholder can positively contribute towards attaining the global sustainable development goal. Multinational companies are very instrumental in meeting this goal owing to their global presence and the ability to provide essential goods and services in needy areas.

Utilitarian Approach

This type of approach to ethical decision-making aims at taking a step which will lead to optimum good to most recipients who are impacted by the action (Raiborn & Dinah, 1990). In other words, utilitarian approach will often target the need to weigh good over evil and then come up with a justified decision-making end based on less harm and more good. For instance, those who are being impacted by the decision like the shareholders of a company, customers, workers or even the society should be affected as positively as possible (Clegg, Kornberger & Pitsis, 2005).

Moral Rights Approach

The moral rights approach is not interested on the outcome of the action taken whatsoever. However, it has more to do with the moral justification of the decision made. This approach clearly defines some steps taken in decision-making as either moral or immoral. There should be a clear cut difference between right and wrong regardless of the consequences of the decision to those who are concerned (Barnett &Sean, 2004). For instance, if paying very low wages to workers is not right, then it is not justified at all to enhance a competitive edge with other market rivals. The business may as well be closed down according to moral rights approach in decision making. Moreover, the moral rights approach underpins the significance of human dignity which ought to be respected and that they too have the moral right to do whatever they want with their lives. From this perspective, human beings should not be handled as by-products of a process but rather as finished end products. Nevertheless, there is often a lot of debate surrounding human rights issue especially on life and general welfare (Clegg, Kornberger & Pitsis, 2005)


Although the two approaches towards ethical decision-making are distinct to each other, both aim at establishing the best decision-making frame work in an organization (Samson & Daft, 2009). The utilitarian approach considers weighing the consequences of the decision made and also making sure that good reign over evil to those being affected by the decision. On a similar note, the moral rights approach targets the well being of the recipient and is very categorical on the type of decision made as either morally right or wrong (Barnett &Sean, 2004). Nevertheless, the utilitarian approach is not the best in ethical decision making bearing in mind that it requires the luxury of time to reflect upon the consequences on whatever option adopted. In most instances, businesses require prompt decision-making on matters at hand. Any delay may lead to hefty losses (Hosmer, 1991). For this reason, utilitarian approach may not fit a situation whereby the decision-making process need to be done expeditiously.

Additionally, the utilitarian approach is concerned with the consequences of the action only regardless whether it is right or wrong. The adoption of this approach in ethical decision-making may mislead the management of an organization especially if only the short term consequences were considered while the long term ones ignored (Daft, 2008).

The Global Multinational Companies and Sustainable Development

The key role of the Multinational Corporations has been to direct material or monetary resources to regions experiencing shortages of the same. Through the movement of capital to regions of low supply and scarcity, the multinationals have managed to play active roles in the attainment of sustainable development especially in developing countries. The accumulation of capital resources in these low profile economic areas has led to the creation of employment opportunities. Besides, the multinational companies contribute significant amounts of tax in the economies they are operating hence enabling the recipient governments to build and improve infrastructure for the sake of sustainable development (United Nations, 1999).

The fact that multinational companies have improved the flow of financial and physical resources globally implies that poverty levels have been reduced substantially especially as these companies collaborate with governments in the poor economies and the United Nations in alleviating poverty levels, improving healthcare, better infrastructure and reduced mortality rate among all age groups.

The multinationals have also worked alongside the United Nations mission of peaceful resolution to conflicts especially in war torn regions. The main reason behind national and regional conflicts especially in third world has been poverty. However, by ensuring sustainable capital flow to these disaster hit zones, the multinational companies have offered the much needed help thereby reducing people’s focus and over reliance on limited resources.

Since the multinational corporations are mainly focused in establishing investment projects, the United Nations has brokered several peace deals in war torn countries to create a peaceful environment conducive for investment.

Although multinational companies have been criticised in different parts of the world for creating monopolies, they indeed provide high quality products which compete favourably with locally produced or manufactured goods. From this standpoint, it is definite that multinational corporations have brought sustainable development by creating high pitch competition. In this regard, it is imperative to underscore the fact that competition may never be anti-development. Due to this factor, multinational companies have grown by leaps and bounds into global investments. About 25 % of the world output was produced by multinational companies in 1998 (United Nations, 1999). Additionally, the Foreign Direct Investment (FDI) by multinationals has increased by double digits in most countries where these companies operate thereby creating a crowding effect. Their intense activities have indeed assured most economies in the developing and underdeveloped world, sustainable development.

Governments may often manipulate and distort markets by attempting to establish price control mechanisms as well as the protectionist policy. For example, the Organisation of Petroleum Exporting Countries (OPEC) and the Coffee Producing Countries tried to skyrocket the price of goods during the first half of year 2000. This is not an isolated case on how governments may fleece its citizens. However, with the inception and expansion of multinational companies, the free market economy found its way in most countries ushering in a new era of perfectly competitive markets based on the principle of willing buyer and willing seller. This has precipitated growth in all sectors of the global economy hence sustainable development (United Nations, 1999).

The multinational companies do operate on a well regulated platform. There are myriad of laws and regulations which have been enacted all over the world to act as checks and balances in the investment activities of the multinational companies. The UN survey on Foreign Direct Investment (FDI regulation reveals that over 800 new rules were enacted by more than 70 countries to check on the operation of the multinational corporations. These companies are not immune to law and justice and therefore it is a clear indication that they are viable channels of achieving sustainable development. Further, the multinational companies have often led the way in encouraging the use of “green” technology to preserve the environment. Hence, contrary to the argument by some government t officials, multinational companies are not out to pollute the environment. The 1999 World Investment Report courtesy of the United Nations revealed that local producers had lower environmental standard practices than the multinational companies (United Nations, 1999).

The multinational corporations have been equal opportunity employers globally. In 1998 alone, these companies had over 80 million employees on their payroll. The companies were also directly involved in creating over 100 million employment opportunities. In due consideration of the job creation ability of the multinationals, sustainable development has been enhanced in both developed and developing economies (Birdsall & Graham, 2000). The multinationals have also assisted in easing down joblessness which has been aggravated by the global economic meltdown.

The main form of investment by multinational corporations is through Foreign Direct Investment (FDI). Given the numerous development loans advanced to developing and underdeveloped countries by Breton Woods Institutions like International monetary Fund and World Bank, there is nothing much to celebrate because the recipient countries have to bear the brunt of offsetting these loans in due time. This has a direct negative effect on the Gross Domestic Product (GDP) growth of a country and equally on the buying power of the masses. Investments by foreign multinationals come in handy because surplus capital is injected into the weak economies leading to economic boom (Birdsall & Graham, 2000). In addition, revenue base for these governments is substantially increased due to taxation.


In summing up this paper, it is by doubt that business managers need to create a holistic framework on the approaches to use in ethical decision making. Although both the utilitarian and moral right approach are unique in theory and application, they are equally useful in one way or the other in a business organisation as templates of making decisions depending on the nature of the case at hand.

Finally, multinational corporations are very instrumental in promoting sustainable development. Through such activities like Foreign Direct investment (FDI), employment creation, environmental conservation and healthy competition, they are well placed towards attaining global goals of sustained development.


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Birdsall, N. and Graham C. (EDs). (2000). New Markets, New Opportunities? Economic and Social Mobility in a Changing World, Washington D.C: Brookings Institution Press.

Clegg, S., Kornberger, M. & Pitsis, T. (2005). Managing and organizations: an introduction to theory and practice. London: Sage.

Daft, L. R. (2008), Management, Mason: Thomson Learning Inc. Hosmer, L. T. (1991). The Ethics of Management. Homewood, IL: Irwin. Raiborn, C. A. and Dinah, P. (1990). Corporate Codes of Conduct: A Collective Conscience and Continuum. Journal of Business Ethics, 9: 879–889.

Samson, D. & Daft, R. L. (2009). Management / Danny Samson & Richard L. Daft Cengage Learning Australia, South Melbourne: Vic.

United Nations (1999). World Investment Report 1999: Foreign Direct Investment and the Challenge of Development, New York and Geneva: United Nations.

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