Although MNCs are not inherently unethical their size and power often seem

Although mncs are not inherently unethical their size

This preview shows page 32 - 36 out of 100 pages.

Although MNCs are not inherently unethical, their size and power often seem threatening to less-developed countries. Show/hide 7 / 13 Global Ethical Issues Sexual and Racial Various U.S. and European laws prohibit businesses from discriminating on the basis of
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sex, race, religion, or disabilities in their hiring, firing, and promotion decisions. However, the problem of discrimination is still a reality in the world. Discrimination is sometimes justified on the basis of cultural norms and values; for example, business women are rare in the Middle East. Discrimination remains one of the more prevalent concerns in international business. Businesses around the world benefit by acknowledging and attempting to curb discrimination, including a decrease in employee turnover; people who believe they are hired, promoted, and treated according to their skills and abilities rather than their personal characteristics or beliefs are more likely to remain loyal. In turn, this can reduce the costs of hiring and training new employees because productivity improves when jobs are filled with the most qualified persons. Additionally, when companies hire a diverse local work force, they are more likely to enjoy the goodwill and support of the communities surrounding their facilities. Companies that take steps to eliminate discrimination may receive favorable attention from such stakeholders as labor and women’s rights groups, enhancing the reputation of the firm overall, as well as its brands. Show/hide Section: Business Ethics / Section 3 / Business Ethics In A Global Economy
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8 / 13 Global Ethical Issues Discrimination Issues How Companies Might Address Discrimination Issues Develop a company policy on discrimination Communicate the policy internally and externally Determine benchmarks for activities in which discrimination can arise Determine indicators of possible noncompliance Establish methods for identifying noncompliance Develop a plan and implement the plan Source: “Discrimination,” Business for Social Responsibility, Show/hide Section: Business Ethics / Section 3 / Business Ethics In A Global Economy
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9 / 13 Global Ethical Issues Price Discrimination A major ethical issue in international business is how products sold in other countries are priced. When a firm charges different prices to different groups of customers, it may be accused of price discrimination . When a market is artificially divided into segments and each segment is subject to different prices, inequalities may emerge that cannot be explained by added costs. When companies market their products outside their own countries, the costs of transportation, taxes, tariffs, and other expenses can raise their prices. Price discrimination is allowable if justified based on costs. But when prices increase beyond the level needed to meet the costs of these additional expenses, an ethical issue emerges. Increasing prices in this way is sometimes referred to as price gouging .
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