Chapter 3 - Recent concerns about ethics social...

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Recent concerns about ethics, social responsibility, and sustainability transcend national borders. In this era of globalization MNCs must be concerned with how they carry out their business and their social role in foreign countries. This chapter examines business ethics and social responsibility in the international arena, and it looks at some of the critical social issues that will be confront- ing MNCs in the years ahead . The discussion includes ethical decision making in various countries, regulation of foreign investment, the growing trends toward environ - mental sustainability, and current responses to social responsibility by today's multinationals. The specific objec- tives of this chapter are : 1. EXAMINE ethics in international management and some of the major ethical issues and problems con- fronting MNCs. 2. DISCUSS some of the pressures on and actions being taken by selected industrialized countries and companies to be more socially and environmentally responsive to world problems. 3. EXPLAIN some of the initiatives to bring greater accountability to corporate conduct and limit the impact of corruption around the world. 62 The World of International Management Sustaining Sustainable Companies W ith a more environmentally-aware public, becoming a "sustainable" business has become an important part of the business model for many MNCs. Three of these companies - Patagonia, Philips, and Tesla - have in different ways transformed their corporate strategy to emphasize "doing good" socially and environ - mentally while "doing well" economically. Sustainability in the Supply Chain-Patagonia Founded by Yvon Chouinard in 1972 , Patagonia is a private , outdoor-clothing com p any. Patagonia 's transition to a sustainability-focused company started in 1988 after several employees in one of their Boston retail stores suddenly fell ill. After a thorough investigation, it was discovered that form a ldehyde, emitted from Patagonia 's cotton-based merchandise, was cycling into the air . In response , Patagonia c ommitted in 1994 to use only formaldehyde-free, 100 percent organic cotton in the manu - facture of its cloth i ng; within just 18 months, they achieved that goal. 1 Since then, Patagonia has examined and modi - fied its entire supply c hain from both a corporate social responsibility and environmental viewpoint. Its revised mis - sion statement reflects that ideal : " Build the best product, cause no unnecessary harm , and use business to inspire and implement solutions to the environmental crisis ." 2 Internally , recycled products constitute a large percentage of the material used in Patagonia's products . Recycled poly - ester and nylon, made of postconsumer soda bottles and waste fabric, are used in the production of fleece and lin - ings .3 This reuse cuts down on oil usage and C0 2 emission s.

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