Ethical Dilemmas for Multinational Companies
This argumentative essay tries exploring how the seemingly wise, invincible and “tall standing” multinational companies also get entangled in the web of ethical dilemmas, and their immediate response when confronted with such a morally pressing situation, in the context of their international business operations, and the extent to which it is appropriate or inappropriate in the light of relevant academic research studies and the current global legal environment.
An “ethical dilemma” is a morally pressing circumstance where an individual is required to choose between two actions to be performed, neither of which ironically offers a satisfactory resolution to the situation or problem in ethically and morally acceptable fashion. The term “ethics” immediately sketches in front of one’s eyes the image of a universally reliable and trustworthy judging standard or code of conduct that can never misevaluate a person, action or any aspect of the external world. Like a product in order to ensure its proper functioning needs to comply with the operational guidelines mentioned in its instruction manual, similarly, everyone has his/her own ethical code of conduct used to decide the correctness or incorrectness of one’s actions and decisions. For example, medical practitioners in the execution of their professional duties frequently refer to the “Hippo critical Oath” as a ubiquitous moral watchdog. Likewise, multinational corporations worldwide are also governed by a familiar corporate lingo, corporate social responsibility, which is nothing else but a universally accepted belief that because an organization is born using resources from the society and the surrounding environment, therefore, it is obliged to repay it through a sense of responsibility towards it, exhibited in its corporate social citizenship towards it in the form of having environmentally friendly products and policies, contribution towards educational & social programs & meritorious and community-friendly hiring practices etc. Apart from these prescribed unwritten morality rules, the biggest judge of ethical and unethical behavior is one’s inner conscience, ingrained in us since childhood, that constantly facilitates our correct decision-making process. However, despite all these arrangements to seek self-guidance, there are times when each one of us, including the stellar multinationals are faced with such situations that put their ethics to a rigorous test, often putting them in tight-spot where taking a quick decision can be both challenging and risky. Then what do they do? Do they give into to the pressure and allow their instincts to take over, ruining their ages-old code of conduct in a heartbeat and act only keeping in mind the target of escaping the torture or stay upright firmly holding on to the adamancy of doing nothing but right?
The current essay tries answering such questions and in doing so, uses the example of a fictitious multinational corporation that has set up a nuclear power plant on the Texas-Mexico Border and employs citizens from both U.S. & Mexico. This scenario upon close scrutiny, we find, is has many ethical issues or dilemmas involved, pertaining to the impact of such move on the stakeholders. Firstly, the setting up the plant obviously gives rise to the problem of dumping of nuclear waste, which is a confirmed environmental hazard, also jeopardizing the survival of both human and animal life in the vicinity. According to a recent paper published in the Journal of Toxicology and environmental Health Sciences, “human exposure to mercury (Hg2+) through industrial activities such as coal burning, electric & nuclear power plants and mining, especially pregnant women can prove hazardous to the normal cognitive development of the fetus, by exposing it to Methyl Mercury (MeHg), that biomagnifies through the food chain and can reach the human population through consumption of contaminated seafood. Consequently, the embryonic methyl mercury exposure can produce hyperactivity and neurological damage to the fetus, causing impaired avoidance learning in it later on. The results of the study were based on an investigation of neurobehavioral effects of embryonic exposure to methyl mercury using avoidance conditioning as the behavioral paradigm, where adult zebra fish developmentally exposed as embryos to 0.00, 0.01, 0.03, 0.1 & 0.3 µM of MeHg were trained and tested for avoidance responses. The results obtained showed increased learning of avoidance responses during training on the part of adult zebra fish hatched from embryos unexposed to MeHg as compared to the exposed ones that showed increased hyperactivity by swimming back and forth, without any significant signs of avoidance responses from training to testing” (Xu, et.al, 2012). This is just a medical finding. Even the legal system does not allow for such kind of grossly irresponsible activity. According to many Mexican Congressmen, “the dumping of waste emanating from such a nuclear power plant violates the 1983 La Paz Agreement between the Mexico and the United States that strictly prohibited the construction of such projects within 100 kilometers from the neighboring country’s border” (Knight, 1998). Moreover, this act is completely contradictory to the socially responsible corporate behavior of the multinationals discussed in the beginning, since it is purely a classical case of environmental injustice. Secondly, the very fact that the power plant may employ people both from the U.S. and Mexico is another issue that needs to be looked at, from the point of view of workplace conflicts that might arise between the two groups of workers, due to the basic ethnic and cross-cultural differences between the two countries, that includes incongruent political and legal systems in U.S. & Mexico also. This is reiterated by an ethnogrpahic study published in the Journal of International Business & Cultural Studies that purported “to compare the researcher’s own experience in founding and managing a company in Merida, Mexico, to an existing body of literature on cross-cultural management. The results, based on the study of Non-Mexican managers working in Mexico using Hofstede’s cultural dimensions reported that though most of the discriminating features of cross-cultural management associated with Hofstede’s seminal study on cross-cultural management were on a decline in Mexico, but still, certain cultural vestiges still prevailed, and needed to be considered as part of the management philosophy. For example, with respect to corporate leadership in U.S. & Mexico, both countries showed contrasting results. U.S. being a highly individualistic society with a greater tolerance for inequality as compared to Mexico, where the society is not only collectivistic but also hardly has any tolerance for inequality, thereby causing the leaders in the former set-up to exercise behaviors focused on individual needs than Mexico, where an autocratic style of leadership is usually preferred” (Gordon). These results have a special bearing on the current situation, especially due to the varying leadership and management philosophies of both the nations, further strengthened by their socio-cultural differences that will cause increased frequent management-employee conflicts riddled by open discrimination by Mexican managers against U.S. workers, which again is unethical, thereby, making it difficult for both the groups to work together amicably. The most unfortunate part is that all this is happening despite “provisions for eliminating workplace discrimination and ensuring pay equality for both men and women for equal work, properly embedded in the Article 1 in 2001 of the Mexican Constitution & Legal System, as an offshoot of the 1910 social revolution that included a struggle for the dignity of the work and the worker, and clearly established that all discrimination based on ethnicity, nationality, gender, age, special needs [different capacities], social conditions, health, religion, opinion, preferences, marital status or anything else injurious to human dignity and intending to annul or diminish the rights of persons is prohibited” (Commission for Labour Cooperation, 2006). Thirdly, this move would also invite not only an ethical but also an economically sensitive issue pertaining to the “NAFTA agreement, signed by Canada, Mexico & U.S. in 1992, that accorded North America as a free-trade zone, lifting both tarrifs and barriers to cross-border trade and investment activites amongst the three signatory nations. The labor opponents of NAFTA criticize it for being responsible for not only huge job losses in U.S. since many industries have now shifted plants to Mexican border, but also rendering the Caribbean countries non-competitive, by inviting competition for their exports to U.S. against duty-free Mexican exports” (Columbia University, 2004), and the setting up of a nuclear power plant, no where else, but right on the Texas-Mexico Border is a part of this agenda only. However, as per a paper published in the Journal of Economic Perspectives, “supporters of NAFTA deny such allegations, openly claiming that such trade liberalization efforts would prove beneficial to the U.S. economy as cheaper imports would leave more money with both U.S. consumers to purchase final goods and U.S. producers to buy intermediate goods, even arguing to the extent that the agreement would have a relatively negligible impact on the U.S. economy since Mexico accounted for a smaller share of the U.S. trade and the average U.S. tariffs against Mexico are already low” (Burfisher, Robinson, & Thierfelder, 2001). Fourthly, an article published in the Journal of Developing Nations, pin-pointed another issue being faced. “On account of this new trade liberalization and globalization trend on the US-Mexico border regions, maquilas have been established. They are manufacturing centers or finished goods assembly plants located in Mexico, and owned by non-Mexicans who exploit the opportunity of availability of cheap Mexican labor as well as close proximity to the US markets. The losers in this entire bargain are those employed in these maquilas, who left their homes in Mexico and are now forced to eckout a living by being victims of corruption, exploitation, violence and heavy-handed control of labor” (Landau, 2005).
Finally, coming back to the initially pointed out issue of the creation of a likely nuclear waste dumping ground we would like to add that apart from threatening the survival of the flora and fauna in the vicinity, it would also hurt the commerical activities in the neighbourhood. Here we can draw an analogy to “the New York City, which, due to the activities of the Merco Joint Venture Company, a waste management under the contract with the New York State receives three trainloads of sewage sludge on a 90,000 acre land just outside the town, the figures of which are not less than thousands of deposits of arsenic, copper and lead as per the New York Department of Enviornment Quality, causing property values to plummet sharply, making people face acute difficulty in selling their land” (Knight, 1998).
Such a situation is not only completely unacceptable but also illegal, as clarified by the, “U.S. Congress enactment of the Nuclear Waste Policy Act, 1982, that established the Office of Civilian RadioactiveWaste Management (OCRWM), within the Department of Energy to take responsibility for developing a system for the disposal of commercial spent nuclear fuel. The Act also created a process for evaluating the suitability of a number of potential sites for for two permanent repositories, leading to the declaration of Yucca Mountain, located in the southern part of the state of Nevada, and 100 miles northwest of the city of Las Vegas, as the sole site to be characterized for the possible development of the first high-level radioactive waste repository, in 1987” (U.S. Nuclear Waste Technical Review Board , 1996).
Based on the above discussion so far, we conclude that the problems in the scenario depicted are a mix of ethical, legal, political and cultural issues and cannot be boiled down to just the selected geographical location of the power plant, which, in fact, has given more different shades to the entire problem. Thus, our analyses also offers not one, but the following four solutions:
1. The plant, despite its location and the nature of activity should not become a dumping ground for nuclear waste, as it would endanger human existence, along with the flora and fauna around. The management must make additional expenditure to ensure there is a proper nuclear waste disposal repository in accordance with the guidelines and specifications laid down by the Nuclear Waste Policy Act, 1982.
2. Since the plant would ultimately be operated by employees from two different countires having diverse cultures as reflected in their different ways of thinking and behaving, therefore, frequent cross-cultural training interventions are a necessity for both Americans and Mexicans for them to develop mutual sensitivity, empathy and respect towards each other. At the same time, impartial and non-discriminatory treatment of both the employee groups in accordance with the guidelines laid down by the Article 1 of the Mexican Constitution discussed earlier is imperative to the creation of a congenial and a productive working environment.
3. Even the lower-level manpower forcibly employed in maquilas - the Mexican sweatshops deserve a life full of respect and dignity and the first step in this direction refers to efforts to be made to make maquila illegal and press for a suitable legilation for the same, which unfortunately has not been passed till date.
4. Finally, discouraging hiring policies involving recruitment of preganant women in a nuclear power plant, to avoid any harm to both the mother and the child.
References
Burfisher, M. E., Robinson, S., & Thierfelder, K. (2001). The Impact of NAFTA on the United States. Journal of Economic Perspectives, 15(1), 125-144. Retrieved from: http://199.33.141.23/faculty/webpages/dtaylor/impact%25of%25nafta.pdf
Columbia University. (2004). NAFTA (North American Free Trade Agreement). Retrieved from: http://www.questia.com/library/history/north-american-history/canadian-history/nafta.jsp
Commission for Labour Cooperation. (2006). Workplace Anti-Discrimination and Equal Pay laws in Mexico. Retrieved from http://www.naalc.org/UserFiles/File/Workplace_Anti-discrimination_Mexico-Final_EN.pdf
Gordon, G. (n.d.). Managing in Mexico - An Ethnographic Comparison To Theory and Previous Research. Journal of International Business and Cultural Studies, 1-11. Retrieved from: http://www.aabri.com/manuscripts/09214.pdf
Knight, D. (1998). Nuclear Dump Waste Planned on U.S. - Mexican Border. Retrieved from: http://www.monitor.net/monitor/9807a/copyright/texmexdump.html
Landau, S. (2005). Globalization, Maquilas, NAFTA, and the State: Mexican Labor and 'The New World Order' . Journal of Developing Societies, 21(3-4), 357-368. DOI: 10.1177/0169796X05058293
U.S. Nuclear Waste Technical Review Board.(1996). Nuclear Waste Management in the United States . Retrieved from http://www.nwtrb.gov/reports/wastemgt.pdf
Xu, X., Lamb, C., Smith, M., Schaefer, L., Caravan III, M. J., & Weber, D. N. (2012). Developmental MethylMercury Exposure Affects Avoidance Learning Outcomes in Adult ZebraFish . Journal of Toxicology and Environmental Health Sciences, 4(5), 85-91. DOI: 10.5897/JTEHS12.004.
