Donaldson’s Type 1 conflict occurs when reasons for a host country’s perceptions are different from those of another country. This is often in relation to their economic development, for instance, where regulations on pollution may not be so stringent. Type 1 conflicts are mostly a mix of both economic and non-economic issues. Donaldson’s Type 1 conflict operates under the premise that a given business practice is ethical in a given situation, say situation B, if it is ethical in the companies original business situation, say situation A (Poff and Wilfrid, 87).
It can be further explained in an example where an international company may have low standards in environmental conservation in its mother country, and it may still adopt the same low standards in any other country unless it is forced to conform to certain laws. The managers of the company in country B, in this case, have to make their decisions according to the values and preferences of the people in their mother country or rather what is common practice in their mother country. In this case, Donaldson advocates for industry-specific codes of conduct that provide detailed limitations against self-serving conduct that is often a result of poor or biased interpretation of laws or industry practices.
In this case, what would be ethically right, but still remains wrong according to Donaldson’s algorithm, would be a situation where the mother country instills very strict laws on pollution, which the company follows to the latter, but there are no such laws in the host country that was earlier referred to as country B.
The company may find itself having to decide whether to save on their operating overheads by disposing of their waste anyhow, hence, polluting the environment, or adopt the stringent waste management practices that are a common practice in their mother country. Though it may not be illegal, too, for instance, discharge chemical waste into a nearby river in country B, Donaldson’s Type 1 algorithm forbids the adoption of such a practice by management since it cannot do the same given the same scenario is in its mother country.
The resolution of this conflict lies in the basic principle that the actions of the company would be allowed if they are also allowed, under similar economic conditions in their home county, they would have been allowed. This is the common downfall of ethical business behavior in third world countries that do not have environmental pollution laws, which then allow big multinational companies to argue that if their mother countries were third world countries, they too would not have environmental pollution laws, and they would still go on to pollute the environment.
Though Donaldson argues that this is a rather exaggerated hypothesis of the weaknesses of the algorithm, it still remains that decisions made on the basis of what the mother country would be like if in the same economic situation as the host country would lead to actions that on empirical grounds, are contingent.
It has always been a challenge for global environmental bodies to force multinationals to observe the same ethical production techniques that are in their mother country, especially in their operations in a country with no environmental laws. The fact that a developed country would not have stringent laws on pollution if it was a third world country doesn’t make an act of pollution morally right.
Works Cited
Poff, Deborah, and Waluchow, Wilfrid. Business Ethics in Canada.Scarborough, ON: Prentice-Hall. 2004. Print.