MNCs can have conflictsbetween
stakeholder groups
Ethics are rules principles that state
which behaviours are acceptable for society An MNC needs to act within
the ethical standards system of both domestic host countries
legal
Some conflicts can include MNCs ethically will pay a fair wage but the
shareholders won't be pleased if it reducesprofits Or an MNCmay mine
resource ethically will clean the area so it doesn't negativelyimpact
residentshowever this can increasecosts
Pay WorkingConditions
MNCsoften set up in LEDCswhich have lower rates of less legislation
pay
on health safety SoMNCs relocate to have lower labour costs which increases
profits Poorconditions can lead to exploitinglabour longhours due to lack of
regulation
GlobalSupplyChains ChildLabour
Child Labour refers to children workjobs with harmfuleffects It could mean
they don't get a solid education different countries have different laws
about what is classed as child labour Profits can be increased as children
can be paidless are less aware of their rights It can be difficult for firms
toassess whether suppliers are usingchild labour as in LEDcs recordsmight
be inaccurate In some countries child labour is necessary for families to
have an income
HostCountries haveencouraged low wages as it encourages MNC the
revenue FDI theybring Consumers have become increasingly aware of labor
exploitation thismayreduce sales could lead to protests Somemay
, argue there is lower costs to live so wages can be less MNCs aren't
breakingany laws Someinitiativesinclude fairtrade to improve working
conditions worldwide
MNCs and the environment
Most MEDCs have legislation on a firms emissions but LEDCs are less
strict Strictlegislation could increase costs or restrict operations so MNCs
can relocate to avoid thisMost MEDCs have legislation regarding waste
disposal sodisposing waste legally can be verycostly LEDcs may not hav
the infrastructure to deal with waste meaningit's cheaper but can damage
LEDCs environment Consumers are becoming more aware of the environmenta
impact puttingMNCs under more pressure to act ethically reduce their
environmental impact
EthicalMarketing
AnMNCs markettingshould be ethical in all countries it operates in for
example in Japanit's a cultural norm to givebusiness contacts gifts as
promotional activitybut in Malaysia it is unethicalbriberyCountries can hav
differences when it comes to labelling as someproducts can be misleading
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