Introduction
The world is fast becoming a global village as a result of the presence of technologies especially the internet. Business organizations have taken advantage of this development by internationalizing their operations to serve customers across countries. Additionally, the multinational organizations do carry out business transactions with numerous as well as diverse suppliers and distributors all over the world. It implies that any action and decision taken by a multinational organization today has great impact on the society which is made up of its customers, distributors, suppliers and the government. It is the reason the concept of ethical and unethical business behaviours has become the interest of many scholars. Past incidences in multinational organizations have indicated that the behaviour of large multinationals, both ethical and unethical has had a large impact on society in recent years. The purpose of this essay is to report some of the ethical and unethical business behaviours which happened in the past within chosen multinational organizations and impacted the society either positively or negatively.
Ethical Business Behaviour at Kimberly-Clark Corporation
Kimberly-Clark is a multinational organization with its main origin being the United States of America where it has the main branch. The company produces mainly paper-based consumer products which it sells to the international market. Currently, Kimberly-Clark Corporation has got presence in over 175 countries. The nature of business which is done by this multinational company means that its actions usually have great impact on the society especially in terms of environmental conditions. The company’s behavior has direct impact on the issues of climate change, weather and environmental appearance of the countries within which it operates.
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Initially, Kimberly-Clark did not understand this fact and did a lot of damage in terms of environmental degradation through its unhealthy business actions. It then was subjected to high pressure exerted by the aggrieved members of the society especially advocacy groups. One notable advocacy group was the Greenpeace Public Advocacy Group. Notably, this corporation is the one that produces goods like Kleenex, Pull-Ups, Huggies and the Scott tissues (Gunther, 2015) . Back then, people campaigned heavily against the K-C Corporation with the biggest issue being the destruction of natural forest trees as well as vegetation use by the company to produce its paper products. The agitators felt the company was encroaching on a valuable resource to just produce throw-away goods. However, on realizing the need for ethical behaviour in the world of business, K-C Corporation decided to consider the plight of all stakeholders within the society and started to implement sustainable methods of production.
The commitment of K-C Corporation to ethical behaviour in business through adoption of green production means was evident in the year 2009 when it joined the Greenpeace group in sustaining forest vegetation including the indigenous trees (Gunther, 2015) . This partnership still continues even today. The corporation continues to ensure it produces its paper products through much of recycling and using environment-friendly raw material sources. K-C Corporation now sources its raw materials from recycled and certified fibre. It is now art of the company’s policy not to use natural forest trees for production purpose. K-C Corporation does not use any raw material that is not certified by the Forest Stewardship Council.
Notably, the strength of ethical behaviour n terms impacting other people within the society is huge. When a multinational corporation sticks to entrenching ethical behaviour in all its transactions and operations, it is able to positively influence other players to emulate good business practices. The whole industry, thus, becomes one which is underpinned by ethical behaviours. The decision by K-C to use only sustainable means of production influenced other companies within the industry to adopt green methods of doing business. An example is Proctor & Gamble which has now embarked on the use of certified fibre sources to produce tissue papers.
K-C has since understood the significance of considering all actions it implements especially in business and engages all relevant stakeholders while making business decisions as part of its ethical behavior. The impact of this move has been the support of various stakeholders within the industry and market. Clients rely on the corporation’s products, thus, it enjoys high level of loyalty. The consumers feel the pride of associating with a company which has got strict sensitivity to environmental conservation. This point shows that ethical behavior within a corporation is able to instill belief and trust among the consumers in the market.
From this case study of K-C, it is learnable that considering a multiple stakeholder approach to business decisions is an ethical action or behavior in itself. This behavior has got good outcomes in terms of impact within the society. Taking a multiple stakeholder approach to the process of making business decisions wins huge support for a company. Business organizations operating across country boundaries are advised to always accept the input of diverse stakeholders within the market including the advocacy groups and public members. The implication of this statement is that business matters in a multinational organization have to be run in a democratic manner. This democracy is a function of ethical behavior and does bring substantially positive impact on the society. Through this form of democracy, a corporation is able to gain more creative and innovative ideas on sustainable investments as well as activities. The ability to consider multiple stakeholders while making business decisions which regard production enabled K-C to gain innovative ideas from the Greenpeace Group regarding the sustainable means of producing paper goods.
Ethical behaviours enable a multinational corporation to not only positively impact the society, but also avoid the losses involved with changing a particular production process and in worst situation pulling a good out of the market. When democracy in the running of corporate affairs is given chance, a business is able to realize the sustainable profits overtime (Fowler & Biekart 2017, p. 82). Organizations which choose to ignore other worthy stakeholders within the public while making business decisions end up suffering losses and also adversely affecting lives of people.
There is no need of fearing sustainability and green methods of production. In essence, there will always be a way out for the business to continue thriving as long as the company gives chance to democracy where the voices of public members within the society are heard (Dodds, 2015). K-C could have chosen to ignore the cry and concerns of the Greenpeace Advocacy Group in pursuit of profits. However, its consideration of ethical behavior in business has continued to pay it off even today. The society is also satisfied with its existence since the company contributes significantly to the maintenance of the natural forest trees as well as vegetation through conservation measures.
From the time this company decided to implement green and sustainable means of producing its products, it has been conserving the environment to the benefit of the society which depends on trees for good climatic conditions. It is important to note that trees and the general vegetation act as water catchment hence bring rainfall. Moreover, trees do provide good shade and shelter to crops as well as the birds of the air. It is also known that the presence of the trees within the environment strongly controls the atmospheric gases by providing more oxygen and taking in carbon dioxide. The air human beings breathe us, thus, purified by the trees. The existing menace of climate change is only controlled by the presence of trees. Global warming can be averted by the presence of trees as well as other types of vegetation. Companies which depend on these trees and vegetation for production of paper products have to create and innovate green means of production in order to maintain them. K-C has taken up this idea as part of its ethical business behavior and as a result continues to save the society in countries where it operates. By changing its initial approach to production when the advocacy groups cried out condemning it, K-C showed ethical actions which other multinational companies need to follow for the society to benefit strongly from their continued presence. The ethical behavior of K-C continues to positively impact the society in countries where it operates.
Unethical Business Behaviour at Equifax Corporation
This second part of the paper concentrates on an unethical business behavior by a multinational, which negatively impacts on the society. In this case, the chosen company is Equifax Corporation. Equifax Inc. is a consumer credit reporting company whose main business involves collecting and aggregating information regarding over 800 million individuals as well as more than 88 million business entities across the world. This particular company was founded in the year 1899 and is based in Atlanta, Georgia. It has got subsidiaries in many countries across the world, which makes it a notable multinational organization.
The company engaged in an unethical business behaviour which greatly impacted on the society in a negative way. The incident of data breach at Equifax has always been controversial with conflicting information regarding its genesis and end. However, this phenomenon appears normal as it is the case with any cyber-security breach scandal. It is also known that corporations who are caught in cyber-security breach scandal always attempt to cover up to ensure their reputation is guarded at all costs ( Dobrygowski & Bohmayr, 2017) . What is clear in this case of Equifax is that it is one of the most grave and impactful incident in history. Understandably, sensitive information belonging to 143 million consumers was breached ( Knutson, 2017) . This information was mainly personal including names of the consumers, license numbers for drivers, dates of birth, social security numbers and addresses. In the same incident, information regarding 209,000 credit cards was exposed. Moreover, there were 182,000 consumer dispute documents whose information was also leaked in the same incident ( Dobrygowski & Bohmayr, 2017) . Looking at the nature of information leaked in this incident, it is evident that this was a grave and highly impactful case to the society. The information leaked was sufficient to aid criminal activities like stolen identities ( Tara, Tiffany & Lieber, 2017) . For instance, criminal elements may use such data to create new credit lines with other people’s names. The credit lines could then be used in commission of tax frauds. Notably, the criminal minds may also use stolen identities to commit heinous activities.
There are plausible allegations that the unauthorized access to the system was as a result of the slow patch management, but not vulnerability. In fact, this narrative is buttressed by the fact that three top executive officials of the corporation sold off their shares just some months to the start of the scandal. It is reason to believe they had knowledge about the incident. The issue of insider-trading has been raised at Equifax with people noting that the three top officials understood about the scandal even before the company announced it and launched investigations. At the same time, the excuse that hackers engineered the access to the system has been rebuffed considering Equifax had strong multiple layers of security controls which always secured the consumer information. The independent investigators who have checked the security system put in place have always been convinced that it was easy for hackers to pass through it.
There are concerns over the manner in which Equifax management handled the whole incident in terms of response. Firstly, it set a website meant to help the victims understand the information breach incident and be aware of measures to take. The move was only implemented after heavy public outcry. Therefore, the company was not going to initiate such a move y itself had it not been the attention raised by the public. This attitude shows the Equifax management was totally irresponsible and insensitive to the plight of the consumers whose data it holds. Notably, the developed website was accorded a new name, hence disadvantaging many consumers who did not know about it. The feedback information given on the website to concerned consumers was also termed inconsistent leaving many users unsatisfied (Shuaibu, Norwawi, Selamat & Al-Alwani, 2015, p. 261) . For instance, a given account holder would get feedback excluding him or her from those affected by the incident on first attempt, but receive another response including him or her name among the victims on the second trial.
This incident greatly impacted consumers whose data the corporation possessed. This particular case study explains the way unethical business behaviours negatively affects societal members (Krutz & Vines 2010, p. 38) . It exposed the consumers to exploitation threat as top executive officials of the corporation took advantage of the situation to score personal interests. It is an incident that brought anxiety, worry and disturbance to the victims ( Mesch 2009, p. 389) . Most of them were frustrated by even the response approach of the corporation. There are sufficient reasons to belief the incident was well designed by the insider top executive officials. Therefore, this incident was the height of unethical business behavior.
Advantages and Disadvantages of Multinational Corporations
Multinational Corporations have got their share of advantages and disadvantages when operating in a given country. Multinational organizations are companies with operations in over one country. They normally own assets and business interests in more than one nation. The multinational corporations are in virtually all the industries including car manufacturers, consumer technology companies, retail stores as well as supermarkets and food chains.
Advantages
The main benefits of multinational corporations include the fact that their size benefits consumers within the local market. As a result of the economies of scale they enjoy, multinational corporations are able to offer cheap goods and services within the local market. In fact, many multinational organizations peg their competition strategy on pricing. For industries which offer goods that attract expensive prices in terms of the fixed costs like car manufacturing, multinational corporations come in handy to the local buyers.
When it comes to ensuring best minimum standards of goods and operations are set within industries, multinational corporations assist developing nations to achieve this goal. They produce and market high quality goods and services, challenging other local organizations to improve their standards for them to match the available competition. This situation goes a long way in helping a nation to attain economic development and civilization.
Moreover, many multinational corporations like Coca Cola have an elaborate corporate social responsibility program which is used to benefit communities in various ways. Presence of the multinational corporations helps a country to nurture its youthful talents, grow education and standards of teaching and eradicate poverty through empowerment plans under their sponsorship.
Additionally, it is factual that most of the multinational corporations do bring many economic benefits to the host nation. Firstly, multinationals bring in the national revenue which is used by the country to develop and fund its recurrent needs. Multinationals pay heavy taxes in terms of corporate tax, which goes into the government coffers. It is also vital to understand that the multinational corporations do boost a country’s foreign exchange rate. The biggest advantage of multinational corporations is the employment opportunities provided to local citizens. The largest share of job opportunities within the multinational corporations usually goes to the locals hence boosting the living standards of households through the incomes earned monthly. In many countries, the best salary offers are given by the multinational corporations. It is also important to note the investment image marketed by presence of renowned multinational corporations within a country. When there are multinational corporations, a country’s name is well-marketed internationally as a foreign direct investment hub. This tag helps in attracting more lucrative international organizations within a country.
Disadvantages
However, presence of multinational corporations in a country comes with disadvantages. The disadvantages include the issue of stiff competition given to local business entities. Multinational corporations usually have an advantage over the local organizations because of the large economies of scale and vast business experience. They are, thus, able to offer extremely low market prices than what the industries give hence destroy normal profits for local companies. In most cases, the presence of multinational corporations within an industry often crowds out local business organizations. It is also vital to note that the presence of multinational corporations in a country poses the risk of worker exploitation. It is also through these corporations that brain drainage from the developing nations to the developed ones occurs. The best experts are normally taken to the company’s headquarters which are mostly located in the overseas nations.
Opinion
Despite these disadvantages, the benefits gained from the multinational corporations are still huge hence recommendable for a country to open its borders to the international companies by attracting them. The logical argument held in this paper is that the net impact of multinational corporations on countries, especially the developing ones is largely positive. Arguably, multinational corporations are the main driving force behind the huge development being witnessed in many developing countries. It is also the opinion of this paper that multinational corporations may not be of significant benefit to the developed nations like the United States of America and China. In fact, such countries require local investors for them to grow indigenous businesses. However, the developing countries greatly need the foreign direct investments brought in by multinational corporations. It implies that MNCs have a positive and immensely necessary impact on developing countries across the world.
Conclusion
Business actions normally have impact on the society. Ethical behaviors on the part of multinational corporations positively impact the society. It has been established in this paper that the decision to consider the views of diverse stakeholders including the advocacy groups opposed to its means of production helped it correct the bad practices and adopt green methods of production. This ethical behavior demonstrated by K-C significantly and positively impacted the society including other companies like Proctor & Gamble which decided to emulate its way of production. On the other hand, the unethical action of executive officers within Equifax to engage in data breach hence exposing many consumers did negatively impact society especially the victims hence throwing the whole company into a scandal which has been the subject of legal battles.
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