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Although MNCs are not inherently unethical, their size and power often seem threatening to less-developed countries.Show/hide7 / 13Global Ethical IssuesSexual and Racial Various U.S. and European laws prohibit businesses from discriminating on the basis of
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/hideSection:Business Ethics / Section 3 / Business Ethics In A Global Economy
8 / 13Global Ethical IssuesDiscrimination IssuesHow Companies Might Address Discrimination IssuesDevelop a company policy on discriminationCommunicate the policy internally and externallyDetermine benchmarks for activities in which discrimination can ariseDetermine indicators of possible noncomplianceEstablish methods for identifying noncomplianceDevelop a plan and implement the planSource: “Discrimination,” Business for Social Responsibility, Show/hideSection:Business Ethics / Section 3 / Business Ethics In A Global Economy
9 / 13Global Ethical IssuesPrice DiscriminationA 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 asprice gouging.