Corporate responsibility and ethical standards in developing countries

Multinationals

There are a number of cultural issues that come up now that there is more of a global economy. Many of these issues are the result of multinational companies doing business within the developing world. We must realize, however, that doing business globally is not the same as doing business in one's host country -- there are differences in expectations, cultural norms, and behaviors. Some issues are acceptable in some countries, others unacceptable. There must, however, be some sort of advantage for a multinational to do business in other countries, and now in the 21st century, that advantage must be more than simply profit. It would not make sense to set up operations in a developing country -- to fund the infrastructure and expend millions if, at some point, there was no fiscal benefit. Companies do need to keep in mind that customs and laws are different in each different company, but remain staunch in their desire to relocate in areas where the labor is inexpensive and laws are less restrictive (Mayfield 2003) A contrary view is called the "socio-economic" view of foreign trade. This philosophy holds that the multinational must conform to the nature of change within the society in which it operates -- not simply looking at just profit. Doing business internationally can proactively and positively affect the load economy as well gain long-term viability and good-will for the company -- as well AE become a significant marketing tool (Stackhouse 2003).

Ironically, as technology changed globalism, it also changed the way media works. Issues are now so transparent and often captured by cell phones that companies can no longer operate in a vacuum. A seminal example deals with Standard Oil and Texaco and a proposal to build a joint venture with Caletx in South Africa, which is also located in Australia as a joint venture. These companies really have no borders, other than perhaps they are part of the developing world. Once this plan was announced, both Standard and Texaco were bombarded with criticisms from stakeholders, religious leaders, and international civil rights organizations because of their view on the South African government's policy of apartheid, low wages for Black workers, and poor working conditions. There is a different standard of behavior for companies as large as Standard and Texaco. These companies are multi-national with billions of dollars in annual income. The position these types of companies take has importance for global stock markets, media, and references for other multinational companies. Particularly since the decades of the 1970s and 1980s were ones seeing the beginnings of globalization, choices made by Standard and Texaco have ramifications not only for South Africa, but for other multinationals going into developing countries with strong minority populations. The decisions that Standard and Texaco make, then, will have effects that will transcend the morality of the current plant situation (Caroll, 2000).