Ethical standards are good business practices that ensures that the interests of all stakeholders of the company are taken care of by the business and its leadership. Most developing countries have weak or no legal frameworks over certain business practices due to laxity or deliberate action to attract the much needed capital inflows. There are numerous examples of companies that have adopted unethical practises to take advantage of certain opportunities and compete favourably with other firms that also employ unethical practises. There instances where firms have to adopt unethical practises to compete favourably.
A good example is the fashion industry. Emergence of fast fashion trend necessitated the need to manufacture cheap clothes that can move fast. Apparel multinational firms that target the masses moved to developing countries in Asia with where they could pay workers a wage below the living wage and deplorable working conditions to minimize operating production costs. Most companies succumbed to pressure and followed suit. There has been emergence of consistent efforts to highlight the plight of those workers and discourage consumers from purchasing clothes from those brands that utilize sweatshop. However, consumers still demand lowly priced clothes for the mass market. For instance, H & M has sweatshops in Philippines. Walmart has also been accused of utilizing cheap labor in Bangladesh and forcing its workers to work for shifts of 19 hours. Similarly, Mark & Spencer was discovered to pay Indian workers less than a dollar per hour and working them 16 hour shifts. These brands have continued to be popular despite their unethical practises outside their home countries.
Unethical practises disadvantages and injures certain segments in society. However, ethical multi-national firms find it hard to survive in the presence of unethical firms because the playing field is not even. There is a need of supra-national regulatory bodies to set global standards. However, it its absence multi-national firms may have to mimic their unethical counterparts to survive.
References
Donaldson, T., Werhane, P. H., & Zandt, J. (2008). Ethical Issues in Business: A Philosophical Approach. Upper Saddle River: Pearson/Prentice Hall.
MacIntyre, D. (2014, August 7). 10 Major Clothing Brands Caught in Shocking Sweatshop Scandals. Retrieved from http://www.therichest.com: http://www.therichest.com/rich-list/most-shocking/10-major-clothing-brands-caught-in-shocking-sweatshop-scandals/?view=all
