Ethics And International Business

Ethics and International Business:

Finding the Lesser Evil

At the beginning of this course it was made apparent that the class was not meant to be a monologue by the instructor but a discussion. From the numerous discussions held in class, I have come to the belief that ethics in international business was the most significant topic discussed in this course.

Ethics in international business and the outsourcing of labor is a prevalent issue that affects not only the United States and our nation's economy, but also the economy of other countries. In a world where technology has made the whole world accessible, the global economy has become more and more important. The labor standard of the outsourcing companies also gets down to the basic form of human rights and measures the personality of both a person and the corporation as an entity. In addition to all of this, ethics in international business encompasses the majority of all the other topics discussed throughout the course.

The subjects of ethics and international business consist of a variety of topics for discussion and analysis. These topics include but are not limited to bribery, extortion, moral norms and human rights. Even from there we can further extend into issues such as cultural and ethical relativity as well as labor standards and practices. The behavior of companies in different host countries affects the economies and people of both the home country of the business as well as the host companies in which it operates. As a result of this the ethical standards at which the company should be held is a source of much debate.

The majority of this paper will concentrate on the ethical analysis of human rights and global labor practices. Two main ethical issues in human rights and the multinational corporation are whether corporations should conduct business in countries which violate human rights, and the responsibilities of corporations to monitor the labor practices of its foreign suppliers. The most notable violation of human rights in foreign suppliers is the existence of sweatshops. The following analysis will approach the different perspectives of moral obligations the multi-national corporations hold and the standards to which the outsourcing firms should be kept.

The debate over sweatshops and labor conditions has acquired more and more attention. As the debate grows, so do its different perspectives. It is hard to define a specific stance on international labor standards for much of it can be situation based, but there are two extreme perspectives that can be seen. These two perspectives include the stance against international sweatshops and the stance that sweatshops are a lesser evil than the alternative.

In Ian Maitland's article titled "The Great Non-Debate Over International Sweatshops", he points out four main arguments . These arguments include points of acceptable wages, the depressing of wages, the widening gap between rich and poor and the political repression used to make countries more desirable for multinational corporations. All of these points provide significant evils of the corporations' use of international sweatshops.

The first issue of acceptable wages brings about the question of whether corporations should uphold the wage standards of their own home countries or the standards of the countries where the sweatshops are located. In reality it cannot be feasible for the corporations to uphold what is referred to as a Ð'''home-country standard", for it diminishes the advantage of outsourcing labor. However, the perspective against international sweatshops as mentioned by Maitland's article would say that the sweatshops merely administer "slave wages". These wages are not even enough for the worker to live on, nevertheless conduct a life what most would consider decent and upholding of the right of freedom and well-being.

A counterargument to the issue of acceptable wages could be that the on the majority, wages given to the laborers are not as low as one would assume. The cultural and economic differences of the countries in which the sweatshops are located must be taken into account. The standard of living in the developing countries as a whole is drastically lower than that of countries such as the United States, that one must expect the wages to be proportionally as low. On the other hand, an adversary of sweatshops could at the same time fight back in saying that it is the ethical responsibility of the multinational corporations to promote the positive development of the international economies. If the wages merely cover the cost of living, then growth cannot be expected.

The issue of the positive growth of the economies also plays into the other arguments against sweatshops. Some would argue that sweatshops not only fail to promote positive growth but also cause negative growth and the reduction of living standards. The negative growth can be brought about by the depression of wages and increased repression to make countries appealing to multinational corporations.

To counter the above additional accusations of economic decline, it can be said while the repression does exist in these countries, that economic growth that is brought about by sweatshops leads to decreased repression. However, if it is evident that repression does occur in these countries, the originally posed ethical question in international business as to whether our companies should conduct business in countries that do not uphold our ethical standards is brought about again. Of course, this can again be countered by saying that we can help change those ethical standards, creating a vicious circle of ethical responsibility.

The perspective that sweatshops are a lesser evil requires a look at the bigger picture involved. This perspective takes an approach that in general conditions and wages in sweatshops are equal or better than the alternatives available to the labor force in these countries. While these conditions are not ideal, they do provide for improvement. It is not doubted that there will be situations in which the conditions of sweatshops cross the line and infringe on universal human rights; however, those special situations should not lead to the complete halt of sweatshops, rather better regulation of their practices.

In the case of wages, one might question why an increase to wages doesn't occur due to the fact that the increase would not lead to an extreme increase in labor cost to the multinational corporations. However, once again the bigger picture has to be evaluated. Rapid growth to the gross national product of a developing country can cause more hindrance than help. Growth must be steady and even sometimes