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How can Multinational Managers make Ethical Decisions? Essay

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Updated: Apr 20th, 2019

It is not simple to understand why multinational managers behave unethically. However, some general reasons that guide their behaviours could include societal culture, decision-making processes, personal ethics, organisational culture, leadership, and unrealistic performance goals.

The above reasons explain why international managers may behave unethically. Hence, ethical behaviour relies on whatever is good for an individual.

Societal cultures differ from one region to another. Hofstede’s cultural dimensions of collectivism and individualism could help in explaining why managers behave unethically in different societies. For instance, managers would act unethically and promote corruption in countries like Russia and China, which emphasise collectivism (Robertson and Fadil 387).

International managers may lack integrity and honour that guide their personal ethics. As a result, they may engage in unethical behaviours. While strong personal ethics may help multinational managers to act ethically, managers who found themselves in cultures that do not emphasise the importance of personal ethics may engage in unethical behaviours.

Organisational cultures emphasise the importance of ethical behaviours when dealing with all stakeholders, but managers may not observe such practices in foreign countries. For instance, Chinese companies are known to emphasise economic benefits at the expense of other corporate responsibilities. As a result, they have encouraged corruption when seeking contracts and tenders in foreign countries.

Leadership sets examples for others to follow. The Enron scandal demonstrates poor leadership that leads to unethical behaviours in firms. Hence, a failure in leadership may encourage unethical behaviours among junior employees.

In most cases, multinational firms may not realise that their decisions are unethical because they fail to question their decision-making processes. For instance, critics have argued that Starbucks exploits coffee growers, but the company has not evaluated its decision to view them as unethical.

Parent companies put pressure on their multinational branches to perform better based on unrealistic performance goals (Hill 155). As a result, these companies resort to unethical practices in order to meet their performance expectations. Managers may ignore both personal ethics and organisational ethical practices in order to achieve performance targets by engaging in corruption.

Multinational organisations have codes ethics that guide their operations overseas. Codes of ethics rely on Kantian and right-based theories of moral philosophy (Hill 163). These business codes of ethics have become under intense public scrutiny in the recent past. Such managers still experience ethical conflicts, but they must behave ethically.

Managers should observe consistent ethical behaviours embedded in their firms in order to behave ethically. Codes of ethics must account for strategic decision-making processes in daily operations. Hence, multinational managers and their juniors have the responsibilities of observing and communicating organisational values.

They should encourage culture changes in order to observe ethical practices in foreign countries. However, managers must observe that it takes significant effort and time to instil culture changes in an organisation.

Managers should observe personal ethics and organisational ethical practices in order to behave ethically. Parent companies often pressure their foreign branches to perform best. Multinational managers must not be sceptical about their corporate ethical values or how such values relate to their roles, performances, or how other local managers perceive such values.

Multinational organisations must encourage responsible leadership. Responsible leadership should focus on the entire organisation, and junior managers should encourage ethical values and comprehend how such values affect their roles. Leadership must also highlight potential ethical challenges and risks to the organisation.

Managers encourage transparent hiring and promotion. Employees must maintain integrity and act responsible while the companies provide safe work environments. Managers also need moral courage to avoid unethical behaviours, and moral officers ensure that employees uphold ethical behaviours.

The essay has highlighted causes of unethical behaviours among multinational managers. In addition, it also shows how such managers can engage in ethical behaviours.

Works Cited

Hill, Charles. International Business: Competing in the Global Marketplace, 9th ed. New York: McGraw-Hill, 2013. Print.

Robertson, Chris and Paul Fadil. “Ethical Decision Making in Multinational Organizations: A Culture-Based Model.” Journal of Business Ethics 19 (1999): 385–392. Print.

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