Multinational Corporations Compliance with Host Countries Laws

Introduction The success of multinational corporations depends on their strategic plans and moral practices that they put into consideration. It is also dependent on how well they are armed to maintain appropriate social responsibility ethics in their host countries.Advertising We will write a custom essay sample on Multinational Corporations Compliance with Host Countries’ Laws specifically for you for only $16.05 $11/page Learn More Additionally, the corporations are not only founded on their home country policies, but also on those of the host countries into which they operate. It is also essential to note that, since every country around the globe usually has a set of rules that govern its people as well as its existence, these corporations must comply with these laws with no compromise. Falkenberg (23) addressed this idea in the article â€Å"When in Rome† to portray the seriousness of the matter, since it is not possible for one to go into a neighbor‘s premise and become the ruler, but has to respect him in order to promote peace. At the same time, philosophers, ideologists, and researchers have seconded the various criticisms that have been put forward about the multinational corporations. They are said to have impacted negatively on the host countries due to their lack of respect for the rights of the counties’ citizens, and that they are always out to please their stakeholders. Falkenberg suggests that appropriate business ethics and morals are a key to the success of multinational corporations in their host countries. More over, the corporations must play a role in promoting social welfare of the host countries, for their own advantage, as well as for the purpose of fostering change in the host country (Falkenberg, 22). This paper seeks to establish the fact that corporations operating in the global context have a responsibility to comply with the laws of their host countries. Additionally, it w ill also give an overview of some of these obligations that host countries have put in place that require compliance by the corporations. More over, the paper will seek to find out the social responsibilities that these corporations operating in the global context have in the host countries. Furthermore, it is essential to provide an argument comparing the distinct conceptions that different commentators have put across in the years concerning business ethics of these corporations in the host countries as they conduct their activities. Finally, the paper will briefly explain the concept of Multinational Corporations’ compliance with the host countries laws (Carroll, 37). Multinational corporations A variety of definitions have been put forward to explain the meaning of multinational corporations, but in my opinion, multinational corporations are those that have successfully expanded to provide their services to more than one country in the world.Advertising Looking for e ssay on business corporate law? Let's see if we can help you! Get your first paper with 15% OFF Learn More They may also be multinational in their responsibility to run production or manufacture of certain goods in various countries. Mainly, the headquarters of such organizations are usually located in their home country, i.e., the country of inception of a corporation, plus other sub-units in several other countries, referred to as hosts. Some multinational companies have expanded to operate globally when supplying their good or services. Therefore, these large corporations often have great impacts in both their mother and the host countries. For instance, some have the ability to influence the economies of the local country, or even the economy of the whole world due to their large sizes. More over, they are well known for having a great influence on globalization and in some way enhance international relations in their countries of operation. However, as the corporation s operate across the globe, appropriate business and relationships ethics have to be applied under all circumstances to overpower the numerous criticisms that have brought down their operations in some cases. The criticisms emanate from the fact that proper business ethics have not been maintained on various occasions, human rights have been at times violated and small and medium enterprises have been observed slowly diminish on the emergence of multinational corporations. Host country’s obligations and laws Host countries in the context of the multinational corporations are those into which branches and sub-branches of the multinational corporation are located. Obligations are a requirement that have been put across by the government in order that whoever comes into that country has to observe carefully. Laws are a set of regulations that are usually documented in a country by its government, such that everyone, whether a citizen or a visitor of any kind must comply with. Th us, every country in the world has its laws that it requires complied with, regardless of a person’s status or class. In their operations, most corporations that operate globally have a tendency to neglect some of these laws as critics have suggested. A number of common laws are in operation in most of the host countries. First, as Donaldson (Para 2) points out in his context of â€Å"Rights in the global market†, multinational corporations are merely obligated to respect and take part in protecting the human rights in their areas of operation.Advertising We will write a custom essay sample on Multinational Corporations Compliance with Host Countries’ Laws specifically for you for only $16.05 $11/page Learn More However, sometimes this has been like a nightmare, since the same corporations have been found to paralyze these fundamental human rights, which is very wrong. Additionally, Falkenberg (19) has pointed out that multinational corporations must comply with the business rules and ethics that have been documented in a country’s laws, when he uses the analogy of â€Å"When you go to Rome.† In my opinion, he was out to say that one should obey the business culture and ethics of a host country, and not trying to change them to fit their interests, since this has resulted in a total change of many countries’ direction. More over, the ethical theory of business proposed by Beauchamp and Norman (3) identifies the extent to which a corporation should relate with a host country in terms of ethics and at the same time, take care of the laws of the country. Many countries do document their laws, to an extent that any person who goes against them should be subjected to a court of law to answer the misconduct. More important, the corporations must always be keen to safeguard the corporate social responsibility in the host countries, to leave it a better place than they found it (Beauchamp and Norm an, 13). Nevertheless, other East African countries have documented strict laws that the multinational corporations cannot be able to meet. Secondly, the cultures of different countries differs distinctly, a factor that sometimes makes it hard for global relations to work properly. Therefore, it is considered essential if the host countries and the corporations should device a suitable framework that is ample to enhance social relations. Frederick Robert in his article about† finding the middle ground† argues about appropriate moral ideals, which would be acquired through building appropriate moral frameworks across the globe. More over, he suggests the construction of pluralistic relativism as an ample moral ground for enhancing good social relations. Social responsibilities of multinational corporations operating in a global context The multinational corporations are always valued as vehicles for social responsibility that is corporate in all ways. The article of Arnol d addresses on the issues of corporate responsibility and capitalism. In order for a positive move of a corporation, the idea of caring for the society in terms of its rights should be put into consideration. One, the corporations should maintain transparency as much as possible in order that the society of the host country may trust them. Many corporations as Ensign (56) suggests have all along ruined their relations with the host countries because of operating in corrupt manners just for self-gain.Advertising Looking for essay on business corporate law? Let's see if we can help you! Get your first paper with 15% OFF Learn More Donaldson (Para 3) in his literature expresses his feelings to those corporations that are out to involve themselves in corrupt deals in order to carry out successful business operations. A number of researchers have always considered transparency as a key to business success in all aspects. Transparency is essential for a successful business operation since it promotes the sense of accountability, not only within the organization, but also in the global context. Moreover, the multinational corporations have a social responsibility to promote global human rights. Human rights are a key concept in the globalization and international relations, thus, the multinational corporations should be in the forefront to fight against the violation of human rights. Along the business operations of the multinational corporations, the management of multinational corporations should lay down strategies that would spearhead in campaigning for respectable human rights in their host countries. However , at the same time, the host countries should also regulate their laws strategically in order that all multinational companies can be able to fulfill the required laws (Donaldson, Para 2). On the other hand, multinational corporations’ management should develop a caring heart towards other primary and small enterprises in the host countries. Many corporations have always been out for self-gain and in the willingness to suppress other small enterprises in order to build their own fame. Beauchamp’s theory of ethical global operations suggests that failure in small and medium enterprises in most countries emanates from lack of support by the multinational corporations. Thus, the corporations need to embark on promoting other small enterprises, in order to foster a spirit of unity among business organizations (Ensign, 45). A comparison of different conceptions about multinational companies’ social responsibility There have been different conceptions about the social responsibility of multinational organizations in their host countries. Arguments have been put across suggesting that the corporations have a responsibility to comply with the rules that govern a particular country. Other critics have considered it better if the corporations are obligated to promote human rights across the globe, while others still feel that the best thing for them to do is to promote other small businesses that are in the host countries. Donaldson (Para 7) strongly feels that the human rights have been solely violated in all aspects, and therefore, rules should be put in place concerning violation of human rights by the corporations as they conduct business. However, in all of the articles herein discusses by various personnel, the conception of the compliance with the laws of host countries is highly valued. Carroll (125) writes about ethical considerations in business and suggests that we should consider the present and the future challenges. The conception surp asses the other two in the fact that, if a corporation would stand the challenge of complying with the laws of a host country, it is easy for it to respect the human rights. At the same time, it is possible for multinational corporations to support small business if a law is documented for them to do so in the host countries. Thus, the corporations should be ready to comply with laws that have been set in the host country (Beauchamp, 73). Conclusion Multinational corporations have tremendously increased in numbers over the years, and have at all times been successful. However, it is needful at such a time to think critically about how well their relations have been with their host countries. The issue is not how they conduct their businesses or how much profits they make over time, but what their social impacts in both their home and host countries are. Are they just out for personal gain without considering their neighbors? Such have been the questions put by critics who have stron gly felt that the corporations have neglected the social roles that they are supposed to carry out but to no avail. In my opinion, some corporations are always out for personal gain as well as to maximize the available opportunities for maximum profits, and do not care their reputation in their host countries. This is the reason why many theorists have to tire putting forward theories that explain why multinational corporations do not comply with countries’ laws. More over, most of them have a very great influence in the government policy in many countries, a factor that contributes to them frustrating many citizens, who in the end develop a negative attitude. Donaldson on his writing is concerned about human rights, where he ends up listing them one by one. As other critics, he argues that the multinational corporations have neglected the human rights issue which should be one of their major area of concern, thus it is important that the corporations’ management retra ce their lost steps in order to comply with some facts that are more meaningful than business itself. Furthermore, the moral grounds that are considered right should be constructed to enhance good social relations. The conception of the corporations being obligated to comply with the host countries’ laws surpasses the others, since compliance to the laws will entail complying with every other item. The objective of the paper was achieved and therefore, â€Å"the multinational corporations should be urged to comply with host countries’ laws,† both for their sustainability in business and to ensure their participation in promoting social responsibility as well as pluralistic relativism. Works Cited Beauchamp, Tom and Bowie, Norman. Ethical Theory and Business. NY: Prentice Hall Humanities/Social Science publishers. 1997. Carroll, Archie. Managing ethically with global stakeholders: A present and Future challenge. Academy of Management Executive. 2004. Web. Donalds on, Thomas. Rights in the Global Market: Ethics and multinational corporations. NY: Sterling Publishing Company. 1990. Web. Ensign, Prescott. International Business Gestion International. Volume 27. Ottawa: University of Ottawa books center. 2006. Falkenberg, Andreas. â€Å"When in Rome: Moral Maturity and Ethics for International Economic Organizations.† Journal of Business Ethics, Volume 54. 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