Multinational Companies and Ethical Theories: Human rights issues in the global supply chain are one of the major challenges that multinational companies face in their operations. While these firms try to support human rights through various initiatives, the also violate these rights through other practices that characterize their operations (Arnold, 2010, p.371). The human rights paradigm has extended to incorporate emerging actors to an extent that the debate on these rights is no longer limited to individual states. Multinational companies have been included in the human rights paradigm in the global supply chain is because they are holders of human rights. Regulations for human rights protection are particularly important to these firms because of their organizational structure, total influence, and mode of operation (Deva, 2004).

One of the major concerns for governments, scholars, and non-governmental organizations is how to influence the human rights behaviors of multinational companies. This concern is mainly fueled by the achievement of mixed results from the previous initiatives that have been adopted such as analysis, mobilization, and regulation. In the past few years, new efforts have been adopted that have played a crucial role in controlling such influence into a form that may wield greater power on the decision-making process of a multinational company.

Ethical Theory of a Multinational Company's Human Rights Paradigm:

According to many business person and business ethicists, multinational companies need to respect and protect human rights. However, while these firms have a responsibility to respect human rights, there is less clarity and agreement regarding what respect for human rights by these companies actually involve. The lack of agreement and clarity is attributed to problems that originate from the nature of human rights and the nature of multinational companies. Moreover, the human rights codes were developed with governments or states, which make their extension to these firms problematic. One of the most problematic aspects of extending human rights issues to transnational companies is whether these firms have responsibility with respect to only some or all of these rights that governments or states need to respect.

The need to protect human rights is attributed to the possibility of violations of these rights that multinational companies in their daily operations. However, the obligations emanating from the human rights of individuals may not totally account for all the ethical obligations of a multinational company (Bishop, 2012, p.120). Multinational companies have several ethical obligations with respect to human rights based on several grounds such as utilitarian and deontological aspects. They also have supererogatory responsibilities from a humanitarian point-of-view such as a duty to philanthropy.

Multinational companies have human rights obligations for various reasons including their impact on the lives of many people across the globe. The firms have the responsibility to protect human rights because of their size, impact, and control of production that affect many people's lives. Secondly, transnational firms have the responsibility of protecting human rights because of the current stage of globalization. In this case, the dogma of free markets and deregulation as well as competitive forces of global markets limits the governments' ability to ensure that the activities of these companies do not violate people's rights. Therefore, multinational companies need to establish appropriate measures that ensure the protection of human rights in all their activities.

Theoretical Approaches to Human Rights:

As evident in the previous discussion, multinational companies have the responsibility of protecting and observing human rights in their entire operations. These firms can accomplish this objective through several theoretical approaches or grounds for human rights. One of the theoretical grounds for multinational companies with regards to human rights issues in the global chain supply is the libertarian ethical theory. This is a non-consequential ethical theory in which rightness or wrongness of any activity to be right or wrong is determined by properties intrinsic to the activity...

The libertarian approach emphasizes that people have the liberty to do whatever they like as long as they respect other people's freedom to do the same. Through this approach, multinational firms can carry out their activities as long as they respect the freedoms of other people.
Secondly, multinational companies can adopt a Kantian approach in their human rights paradigm in order to protect and observe these rights. This approach is based on the view that an action can be good as long as the principle behind it is its responsibility to the moral law (Lewis, n.d.). As a virtue theory, the Kantian approach offers moral laws that are universally applicable despite of culture or individual situations. The Kantian approach places more emphasis on rational thinking about morality as a justification for moral rules. One of the major examples used to justify the theory is the logical reasoning used in Mathematics to rationalize axioms to be held by everyone regardless of their circumstances and consequences. Therefore, the morality of an action is dependent on whether the activity is universally applicable to all.

Third, multinational firms can adopt a democratic ground for protecting human rights through which intentions and activities are morally relevant in determining right and wrong. The fundamental principle in democratic theory is that public decisions should be made in consultation with people who are likely to enjoy or suffer from these decisions (Franceschet, 2009, p.51). This approach has mainly been used in the political circles are part of policy making. The democratic perspective can be applicable in protection of human rights by multinational companies through analysis of the impact of their operations on populations.

Most Useful Theory:

While there are various approaches in understanding the role of a multinational company in relation to human rights issues in the global supply chain, the most useful ethical theory is the utilitarian approach. Utilitarianism originated in the 19th Century when it was developed by Jeremy Bentham and John Stuart Mill. As the name suggests, this theory stresses that the one and only principle of right and wrong is the principle of utility. Therefore, the right action is one that contributes to the greatest good or happiness of the greatest number of people, which is the test of whether an act is obligatory. Therefore, the consequences of an action are determined based on whether it brings the greatest good for the greatest number of people who will be affected.

The main underlying principle behind ethical theories is to promote the greater good of every individual with regards to the actions of other people. While multinational companies have the main goal of making profit and maximizing it, they need to protect and observe human rights because it's central to the realization of the major objective. Utilitarianism seems to be most useful approach in understanding the role of these companies in dealing with human rights issues in the global supply chain. This is a better approach than the Marx theory which is largely considered as an anti-ethical approach. Since Marx had no ethics, he refuted the principles of ethics and developed a perspective of communism. In a communist society, every individual receives according to his ability and based on his needs (Brenkert, n.d.). Since he mainly relied on science, Marx was unwilling to use conventional moral terms and to engage in the usual moral reflection and analysis. Actually, the usefulness of the utilitarian ethical theory in relation to human rights is associated with the fact that many philosophers have increasingly embedded all human rights obligations in this approach.

An example that demonstrates the usefulness of utilitarian approach is the fact that multinational corporations have the right to hire armed security personnel. This right provokes two major concerns including whether the firms should have restrictions to that right. Secondly, the right elicits concerns on whether armed multinational companies carry a major threat to human rights, especially if they can threaten the government or become involved in civil wars. Based on the utilitarian approach, the morality of this issue with respect to human…