Multinational Ethical Decision-Making (Essay Sample)

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Multinational Ethical Decision-making
Entrepreneurship is one of the essential pillars of globalization. It has almost become an unwritten rule for corporations to open branches in different countries worldwide as competition becomes upgraded to the global market space. A challenge arises because of the multicultural dimensions involved. While the emphasis in the twenty-first century has been made on ethical decision-making as a means to sustainability, the ethics of various cultures are defined by distinct dynamics. Consequently, acceptable practice for an organization in the parent country may be regarded as taboo in a host one. Thus, a growing need for the application of Thomas Donaldson’s algorithm has emerged to evaluate ethical options when doing business internationally.
Malachowski’s Business Ethics gives an instructive interpretation of Donaldson’s algorithm (13). The algorithm involves the evaluation of cultural differences concerning the level of economic development. In essence, it asserts that the economic status of a country is a key determinant of its morals. The strength of the algorithm is in the fact that despite the consideration of economic development as a fundamental factor in ethical persuasions, it still takes a dualistic approach. As a result, the algorithm consists of two types of conflicts. Type 1 variances posit that the host country’s criterion for determining whether a business practice is morally permissible is directly dependent on the country’s economic development. On the other hand, type 2 ones postulate that moral reasons underlying a country’s acceptance or rejection of business practice are not in any way anchored on its level of economic development. In type 1, there may be essentially no moral contradictions, only economic disparity. The strategic manager must candidly assess whether the proposed business practices would be as well convenient in the home country assuming that it was economically at par with the prospective host country. This guarantees elimination of biases and double standards. In contrast, type two conflicts specifically analyze the moral differences that exist between the home and host countries. Unlike the type 1 conflicts, it overlooks the economic variance. As a result, the concept analysis other essential aspects of morality such as human rights. Business practice is considered permissible if it does not violate the fundamental human rights of the citizens of the host country. Given the global perspective, human rights have been evaluated and harmonized to generate the category of fundamental international rights (Malachowski 15). Furthermore, a prospective right must grant protection to assets that are under persistent threats to be recognized as a fundamental international right. The rights include ownership of property, access to minimal education, and non-discriminatory treatment.
Despite the detailed demonstration of the algorithm, Donaldson does not proclaim that it is infallible. Analysis reveals that it is susceptible to error like every other theory. Flaws may exist on two fronts. The first is that it may profess as ethical a practice that is conventionally held to be unethical, while in the second, the algorithm may unfairly taint a practice that is generally regarded as ethical by defining it as unethical. To demonstrate the weakness of the theory, it is necessary to identify two cases for type 1 and type 2 conflicts. Moreover, diligence must be exercised in the representation of countries to avoid conflicts with nationalists. It is important to note that it may be impossible to demonstrate the algorithm in ideal conditions in the highly modernizing world, or at least without getting accused of prejudice and malice. For this project, the type 1 conflicts will be drawn from a hypothetical case study of a five-star hotel based in the USA and wish to start a branch in a village in Congo. On the other hand, the type 2 conflicts are based on a ranch farm that wants to expand to Africa.
Applying Donaldson’s algorithm to the case studies generates conclusions that may be misleading to the investors. The first one is that it can be deduced that the construction of the hotel facility in a village whose residents will never have the opportunity to afford the services, may ultimately lead to class discrimination. It would be unsettling