Law and ethics assignment essay help: Ethics and social responsibility – Lehman brothers
1. Introduction (Literature Review)
Ethics has been defined as moral guidelines which distinguish what is wrong at right. According to (Binns J. 2008) ethics is being interlinked with factors such as integrity, competence, openness, objectivity, intellectual property, social responsibility, carefulness and etc. He states ethical aspects needs to be managed at organizations for meeting expectations of all the stakeholders. He also explains that fair practices of business must be implemented for driving moral values all across the organization and its people. According to him an era of Globalization ethical aspects are being diluted to increase profits of business by following corrupted practices such as bribery, falsification of documents, violating the legal guidelines and impacting the overall environment. As per (Thompson 2010) multinational organizations have a desire to expand their business in several host countries in small span of time. According to Thompson the multinational Leaders inculcate unethical leadership practices by ignoring interest of all employees, engaging child labor, asking employees to work in unsafe working environment, exploiting rights of employees, ignoring the interest of society and its people, evading the taxes of host country, producing harmful product and services without following quality standards, and competing with competitors on unfair basis. He also states that organization cannot be considered unethical but it is the people and their leaders of multinational which makes them unethical. Ethics plays a vital role for managing the business on systematic basis by executing moral beliefs and values among multinational. According to (Ojumu 2007) the aim of multinationals is to commercialize business by generating trust of all stakeholders of host and parent countries. The high level of competition and rating being given by the consumers plays a vital role in managing ethical aspects at multinationals. The multinationals and their business cannot be kept away from society because both need to serve each other on mutual basis. The host countries give importance to multinationals because that have believe that opportunities will be created and it will directly support in growing their economies. As per (Sevesson 2003) ethics at multinationals depends upon factors such as culture and time. The culture of multinationals defines what things are ethically accepted and unaccepted which are also being influenced by value systems, religion and traditions. He states that whenever multinationals expand their business they need to follow several rules, regulations, and norms of the host countries. It is being explained by him that proper code of ethics also become the part of culture for multinationals while managing their business at host countries. There are several multinationals such as Enron, Lehman Brothers whose business failed in international market because its leaders and employees failed to implement ethical business practices. As per (Johnson 2005) multinationals needs to follow three levels of business ethics while expanding their business which impacts organizations and societies. He states that according to first level multinationals must consider macro aspect for following legal procedures to manage the business. In the second Level he highlights that corporate social responsibilities must be performed by multinationals inculcating ethical practices. The third level is being highlighted with respect to behavior and actions of employees and leaders of multinationals. According to researchers there are so many multinationals such as Shell oil company, Cadbury Nigeria, World com, Manville Corporation and Arthur Anderson which revealed their unethical practices and questions in minds of all stakeholders globally. Johnson also states that employees working at multinationals are also found engaged in whistle blowing process which signifies that organizational confidential reports and information are being shared with outsiders for fulfilling their requirements. He also states that multinationals are found unethical in several such situations such as when there is high level of competition; there is shortage of labor, and lack of availability of resources.
2. Identification of Key Research Problems
In this paragraph key research problems with respect to role of ethics at multinationals are being explained on detail basis. The main aim of this project report is to study the aim of implementing ethical practices by multinationals. According to (Trevino 2000) there are certain key problems such as multinationals face problems while managing business being socially responsible because it has been observed that host countries have weaker rules, regulation and laws. He states that problem occurs at multinationals when they start to harm the society by inculcating unethical practices. Trevino’s literature review will also identify the problems by determining extent of relationship between organizational commitment and employees rights being violated by the multinationals at host and parent countries. According to him he also states that problems are being faced by multinationals while training employees regarding ethical aspects. The problem can also be how code of ethics is affecting behavior of multinational employees. According to (Francis 2000) employees rights are also being hindered at multinationals when activities related to management of business also impacts job’s of the employees. The confusing situations, complex problems being created by multinationals hinders the rights of employees which leads to engagement of unethical and corrupted practices at workplace of multinationals. As per (Rowan 2001) employees can developed commitment and belongingness towards multinationals when employees are provided job related safety, fair wage rate are being paid to them, maternity benefits are being provided, employees are not discriminated on the basis of age, religion, gender, language, religion and socio economic backgrounds, respecting and maintaining the dignity of employees, providing freedom, and developing healthy industrial relationships. Rowan also states that rights be provided by multinationals by paying wages on time, providing better career related opportunities, training and developing employees for superior performance of the multinationals, and providing employees better facilities such as transport, housing and retirement benefits. He also states that multinationals terms & conditions must implement justice in treatment of employees, effective management of interpersonal relationships, and creating flexible working policies for their employees. It is stated by him that increasing competition in global market has forced multinationals to implemented ethical employment practices for winning hearts and confidence of customers. As per (Palmer 2002) today customers judge products and services being produced by multinationals with their ethical image and branding process. He states that multinationals can explore their business by meeting expectations of all the stakeholders. As per (Raheem 2004) multinationals must understand ethical practices seriously so that overall performance of organization can be increased holistically. He also highlights that strong ethical values are required at multinationals for making them socially responsible towards host countries by accepting their culture, rules and regulations, and supporting their economy. According to (Garriga 2004) multinationals must implement proper code of ethics by training their employees to maintain transparency in their communication process, explaining employees about their job roles and responsibilities on clear basis, compensating the employees according to their performance on fare basis, enhancing the skills and competencies of employees to increase productivity and maintain fair competition with local competitors, training employees regarding maintaining, clean , green & healthy working environment. Garriga explain that employee’s performance and career goals must be related with overall goals of organization to create an edge by over competitors by the multinationals. According to him ethical can be developed by multinationals by creating a sustainable business model for society and its people, creates a team based working structures for fostering creativity and innovation, implementing several ethical acts related to crime and misconduct at workplace, offering quality based products and services to the customers.
3. Identification of Distinct Area of Controversy
In this paragraph view of researchers related to distinct area of controversy while managing ethics at multinationals are being discussed on detail basis. According to (Price 2009) at times multinationals implemented unethical culture where leaders and employees are found violating rules and regulations of host countries. He states that to get License and projected completed in small duration of time employees and Leaders employ corrupted practices such as misusing funds, offering bribery to public officials, and exploiting the resources of environment. He believes that multinationals fail to understand emotions and local culture of host countries. It is also being explained by him that because of such unethical reasons local citizens do not favor entry of multinationals in host countries. He also explains that multinationals also operate in host counties to enjoy cost advantages in terms of availability of resources and reduced labor costs. As per (Peterson 2003) multinationals these days implement corporate social responsibility (CSR) just for branding their organization. He states that multinationals actually don’t share pie of profits among societies of host countries. According to him CSR activities of multinationals must deal with philanthropically and monetary aspects. He also states that CSR is being considered as a responsibility of multinationals which they do not carry out to protect human and environment. He highlights that resources are being utilized by multinationals for growing their business so it is their prime duty to engage them in actual CSR activities by providing health facilities to poor sections of societies. According to Peterson many times multinationals pollute environment and resources without considering its negative impact upon people and their living environment. He explains that many times multinationals are being suspected that leaders and employees are engaged in falsification of documents which reduces confidence among their stakeholders. According to (Lucas 2000) multinationals have been involved in tax evasion process to increase their profits which give clear indication for governmental organizations to investigate multinationals and its people. Moreover he states that several organizations have power to investigate business of multinationals being operated in host countries so that it might not affect their economy. Lucas highlights that these organizations have power to check plant and machinery being implemented at multinationals, check their quality standards, working conditions, and terms and conditions being implemented by them. According to him there are many multinationals which declares bankruptcy because of unethical practices being implemented by leader and their employees. According to him today’s business is being connected with support of technologies and networking process where financial crisis being declared by any multinational affects the overall economies of world. Lucas believes that multinationals must pay taxes to the government of their host countries where they operate because it helps in growing host countries economies since they operate over there. It is also being explained by him that due to weak and flexible government policies multinationals operate in least developing countries because they enjoy several types of advantages in term of employing labor with lower wages, utilizing resources abundantly, and saving several types of operating costs. He highlights that animals are being experimented and used for testing and manufacturing products which hampers the ecosystem of host countries creating controversy. In such situation Lucas explains that multinationals must avoid such corrupted practices which might affect human and society by managing business in an ethical manner. Therefore he states that these all areas result as a matter of controversy for Multinationals.
4.Questions for Further Research
In this paragraph several questions which require further research with respect to management of ethics at multinational organizations are being explained on detail basis. According to (Fawaz 2007) researchers must further research with respect several types of rights being offered by multinationals to their employees. He explains that this process will help in maintaining checkpoint towards employee’s attitude, performance and behavior while performing their jobs. He highlights that it is prime duty of multinationals to check whether rights being provided to employees meet expectations of all stakeholders in societies with ethical aspects. He also states that Government must check nature of business, products and service being offered at parent country before providing license to enter in at host countries in form of joint venture, franchise mode and merging process. He states that main aim of multinational organization is to enter at host countries and expand their business by investing lower amount and generating higher level of returns and profits. Farnham explains that in such situation research must be conducted regarding to what extent government can enforce punishment and penalties upon multinational organizations for not implementing ethical practices by hiring local employees for growing their economy, not implementing several Acts related to workplace regulations of host countries, restricting multinationals to avoid wastages of natural resources, and enforce levels of punishment with extent to unethical practices being implemented in form of using child labor, polluting environment, experimenting upon animals, evading taxes, applying process of discrimination with respect to age, race , gender, religion, language, and socio economic backgrounds. As per (Valor 2005) further research must be conducted by several researchers regarding what are the activities that come under corporate social responsibilities. He explains that aim of business is to earn profits but in doing so multinationals must not forget ethical standards which they need to follow at organizations. He also stated that research must be conducted by several researchers regarding how profits can be distributed among several sections of societies because it is the prime duty of multinationals as they have been regularly using resource of host country’s environment. Valor also explains that research must be conducted regarding why multinationals needs to pay taxes to government of host countries on timely basis. He explains that multinationals have been connecting trade of one country with other country and any fluctuation made in economy of one country affects trade of other country very easily. He highlights multinationals can flow finance easily if confidence of shareholders are maintained by employing ethical practices such as paying taxes to government of host country on timely basis. Valor also explains that paying taxes to government by multinationals assures ethical image among their stakeholders for longer period of time. As per (Kim 2000) research must be conducted by researchers regarding how multinationals can ethically developed lower developed countries. The research must be conducted with respect to how local employees can be hired and compensated fairly, how infrastructures of such countries can be developed, how multinationals can plan for initiative to promote and conserve towards maintenance of clean, green and healthy environment. Kim also states that how balance between profits and society can be managed for creating a sustainable business model of multinationals. He explains that host countries often impose rules and regulations upon multinationals because they can wind up their business easily during their failures. Therefore Kim highlights research must be conducted for multinationals regarding how such situations can be avoided in future.
5. Conclusion
Thus the literature review can be concluded with viewpoints of several researchers with respect to role of ethics in multinationals. Binns has defined ethics as single factor which is interlinked with several other factors such as integrity, competence, openness, objectivity, intellectual property, social responsibility, carefulness and etc. According to him ethics is required to drive moral values all across multinationals operating globally. Thompson explains that multinationals are very often found inculcating unethical leadership practices by ignoring interest of all employees, engaging child labor, asking employees to work in unsafe working environment, exploiting rights of employees, ignoring the interest of society and its people, evading taxes of host country, producing harmful product and services without following quality standards, and competing with competitors on unfair basis. Ojumu explained that multinationals and their business cannot be kept away from society because both need to serve each other on mutual basis. Sevesson states that multinationals expand their business by following several rules, regulations, and norms of host countries. Johnson highlighted three levels of business ethics which can be implemented by multinationals. Johnson named few multinationals which were being found unethical in their activities such as Shell oil company, Cadbury Nigeria, World com, Manville Corporation and Arthur Anderson. The key research problems identified by Trevino are in form of multinationals facing problems while managing business being socially responsible because it is observed that host countries have weaker rules, regulation and laws as compared to parent countries. He has also identified problems by determining extent of relationship between organizational commitment and employees rights being violated by multinationals at host and parent countries. He also stated that problems are being faced by multinationals while training employees regarding ethical aspects. Francis explained that employee’s rights are hindered at multinationals when activities related to management of business impacts their jobs. Rowan explains that employees can develop commitment and belongingness towards multinationals by providing them job related safety, fair wage rate are being paid to them, maternity benefits are being provided, employees are not discriminated on the basis of age, religion, gender, language, religion and socio economic backgrounds, respecting and maintaining the dignity of employees. Palmer explained that customers judge products and services being produced by multinationals with their ethical image and branding process. Raheem explains that strong ethical values are required at multinationals for making them socially responsible towards host countries by accepting their culture, rules and regulations, and supporting their economy. Garriga believes that code of proper code of ethics can be implemented by training their employees for maintaining transparency in their communication process, explaining employees about their job roles and responsibilities on clear basis. The distinct areas of controversy have been identified by researchers such as Price who states that leaders and employees of multinationals implemented unethical culture by violating rules and regulations of host counties. He explains that for getting License and the projected being completed in small duration of time employees and Leaders employ corrupted practices such as misusing funds, offering bribery to public officials, and exploiting the resources of environment, and whistle blowing. Peterson explained that in the name of Corporate Social Responsibility multinationals have not been truly sharing their pie of profits with poor sections of societies. Lucas states that multinationals have been found and involved in the tax evasion process to increase their profits which give clear indication for governmental organizations to investigate their business. He explains that in such situation Government has power to check overall functioning process of an multinationals. There are several questions which need to be researched with respect to role of ethics in multinationals. Fawaz explained that researchers must further research with respect several types of rights being offered by multinationals to their employees. According to him checkpoint should be maintained towards employee’s attitude, performance and behavior while performing their jobs. Valor suggests that there is further requirement of research regarding what activities comes under CSR. Kim has explained that research should be conducted regarding how multinationals can help in developing lower developed countries with respect to how local employees can be hired and compensated fairly, how infrastructures of such countries can be developed, how multinationals can plan for initiative to promote and conserve towards maintenance of clean and healthy environment
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