15 Sep 2022

652

Ethical Relativism and Multinational Corporations

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Ethical relativism is a theory that’s states that morality is relative to the customs one’s culture. This theory holds that, regardless of whether an action is right or wrong, it is highly dependent on the on the cultural and moral norms of the society that the action is practiced. Technological; advancements and globalization led to the rapid expansion of MNCs (multinational corporations) across the world. MNCs resorted to conduct their businesses in low income and less regulated countries by relocating the production and development activities to locations where they could be done faster, better and cheaper (Habibi, 2007) . In domestic business environments, there are established national laws and ethical frameworks that govern what a business can and cannot do. But in overseas operations, these businesses are faced with weak enforcement mechanisms and substandard laws that present them with opportunities of making profits through practices that are deemed unacceptable in their home countries (Velasquez, 2011) .

In Saudi Arabia, women must have a male guardian who holds the power to make critical decisions on their behalf. Due to Saudi Arabia’s discriminatory practices and policies, women have been left disempowered and vulnerable to abuse. In Saudi Arabia, women are discriminated in healthcare, employment, domestic violence and they are not allowed to get a passport or travel. From a utilitarian perspective, the subordination of women is the main obstacle to human development. Acts in utilitarianism are judged by their consequences, how they affect the society and the standards upon which they should be minimized or maximized. I would be obliged to change the discriminatory practices in Saudi Arabia but internal human rights laws and "believing" in western values will not be enough. Utilitarianism implies that ethically correct decisions must comply with the utility principle by maximizing the benefits and minimizing the damages to stakeholders. Principles of internal law require that all corporations have to respect the culture and customs of the countries that they operate in (Habibi, 2007) .

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Many at times, globally accepted anti-discrimination standards tend to be in conflict with traditional practices. International corporations promote gender equality initiatives at home but find themselves promoting discriminatory practices in societies that are intolerant against the progression of women. MNCs therefore have to justify their discriminatory practices out of respect to the cultural norms of the host country. Based on this, the utilitarian theory is not capable of providing any satisfactory solution to the dilemmas that MNCs face.

The Case of Bulls Eye and Bushmaster 

After analyzing the Gun Manufacturer and Responsibility case, I believe that Bulls Eye and Bushmaster should be held morally responsible for the actions of Muhammad and Malvo. Gun violence threatens and puts human life at risk. Gun violence also threatens the provisions of article six of the United Nation’s International Covenant on Civil and Political Rights that states that "Every individual has the inherent right to life." Ethics and moral codes require us to promote good and prevent harm to others (Velasquez, 2011) . Moral codes do not only apply to individuals but also corporations. Corporations that pride themselves in the manufacture of guns have a moral responsibility to ensure that their products are not used to cause harm or acts of violence. Bulls Eye and Bushmaster are to be held responsible to the acts of violence caused by Muhammad and Malvo as their business activities violated human rights for the Washington D.C. Victims death. Bulls Eye and Bushmaster failed to conduct due diligence on how their action failed to protect and respect the value of human life which led to the death of thirteen people (Habibi, 2007) .

Bulls Eye and Bushmaster’s quilt should not be able to absolve their individual employees from both legal and ethical responsibilities of their corporation. Corporations and employees must be morally responsible for all the crimes the crimes that they commit. However, moral guilt and responsibility highly depends on the circumstances under which the crime was committed (Velasquez, 2011) . Were the employees acting based on their knowledge and free will, or were they acting with regards to the instructions given to them by Bulls Eye and Bushmaster? An organization is a legal entity that is separate from its owner, however, the organization comprises of employees who are rational beings and have the capacity to carry out their roles as prescribed by organization or indulge their free will on either to follow or not follow orders that are not ethical or moral (Habibi, 2007) . Therefore, all the employees of Bulls Eye and Bushmaster were responsible for the crimes committed by their organizations. The employees still had their freedom of will to follow or not to follow the orders give by their organizations if they were deemed not ethically and legally acceptable. In other circumstances, Bulls Eye and Bushmaster can be held ethically and legally responsible independently from their employees which will then absolve them from the crimes of their corporations.

The Ford Pinto Case 

In 1970, the Ford Pinto was rushed into production so that the car could compere with car made by Toyota and Volkswagen. Despite knowing the dangers and defects that the vehicle possessed Ford rushed to produce the car in 1971 before the NHTSA (national highway traffic safety administration) standards were implemented (Velasquez, 2011) . The decision made by Ford was unethical and as a result of poor business practices as well as the inherent difficulties in the principle or utility (Habibi, 2007) . Ford’s argument favored profit maximization to their stakeholders over the safety of their customers. Ford also argued that correcting the defects in the Ford Pinto would be costly when compared to value of human life. The jury at that time did not have the technical knowhow and ability to calculate the value of human of life which Ford estimated to be $200,000. Human life is invaluable and no amount paid can never be equated to the value of human life (Velasquez, 2011) . By using utilitarian principles, Ford preferred to make profits at the expense of the society. From a utilitarian perspective, the best ethical course of action is the one in which a decision benefits a particular action while outweighing the costs.

From a utilitarian perspective, it becomes difficult to identify the stakeholders and the lack of consideration in the identification of the individual rights that may be in conflict with the utility principle. Difficulties in establishing how the stakeholders are affected by a decision, it becomes impossible to find the right balance between the benefits and the damages (Velasquez, 2011) . The principle of utility does not put into consideration the individual rights that may be affected when such a decision is made. While the jury may have ruled in favor of Ford, they did not consider the many vital factors such as the loss of life which cannot be reversed, the long-terms effects of emotional trauma of the victims as well as the increased costs to healthcare in their decision-making process (Habibi, 2007) . From the Ford Pinto case, we can conclude that the principle of utility is too abstract and presents a set of inconsistent choices that are not illogical to moral common sense.

References 

Habibi, D. (2007). Human Rights and Politicized Human Rights: A Utilitarian Critique.  Journal Of Human Rights 6 (1), 3-35. doi: 10.1080/14754830601098410 

Velasquez, M. (2011).  Business Ethics Concepts and Cases . Upper Saddle River, N.J: Pearson. 

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StudyBounty. (2023, September 16). Ethical Relativism and Multinational Corporations .
https://studybounty.com/ethical-relativism-and-multinational-corporations-essay

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