Multinational organisations present serious challenges in complying with international and domestic ethical norms. Particularly, multinational organisations currently experience various complications in assuming full responsibility of their actions to the society and environment. The manner in which an organisation can effectively foster a culture of ethical code in all its countries of operations, how to education employees on the importance of complying with the set regulations, and the most effective means of meeting the intricate legal and compliance obligations are some of the main challenges that face most multinational organisation. Even though all these challenges are independent, the solution to these problems requires holistic and systematic approach (McBarnet, Aurora & Tom, 2007). The collective and holistic approach should clearly reflect a corporate wide commitment to responsible conducts and behaviours. Although a good number of modern multinational organisations comply with the set domestic and international ethical codes, it is appropriate for multinational organisation to be held accountable for more than just adhering to the set international and domestic rules and regulations and conducting its activities and operations within domestic and international ethical norms.
The deepening and broadening of globalisation process and information technology in modern economy has inevitably forced multinational organisations and other business entities to be regulated and controlled by a centre of international law research arena (Visser, Dirk, Manfred & Nick, 2007). The impact of globalisation on the environment and social development has also forced international authorities in coming up with regulations that would regulate business operations. In most instances, abiding by the set international and domestic regulations has critical impacts to the environment and the society. On the other hand, with an aim of improving its profitability and productivity, business entities engage in activities that result to environmental degradation. In this context, the detrimental impacts of multinational organisation to the environment and society, multinational organisation should be responsible for their actions at all levels. Despite abiding by the existing regulations and laws, multinational business entities should also take social responsibility in order to consider the interests of future and current generation.
As observed by social responsibility theory, all organisations ought to be responsible to the existing code of ethics irrespective of their position in the corporate world. International organisation should also be responsible for their actions to the environment, economy, and the society. Despite abiding by the existing rules of regulations, multinationals organisations should been accountable for their activities both at local level and in international level. Being an ethical theory, social responsibility theory explores the importance of individuals and organisations in acting in a manner that can benefit the entire society. Although a good number of modern multinational organisation are profit making entities, their actions and activities should be directed not only at increasing their profit but also at benefiting the society at large (Rose, 2004). As observed in the theory under study, social responsibility is the obligation and core duty of everyone in the society. Social responsibility is essential in facilitating the maintenance of balance between the ecosystem and the economy. Therefore, by considering the content of social responsibility theory, it is timely for modern multinational organisation to be accountable for more than just adhering to the set regulations and conducting its operations with domestic and international ethical codes.
The international and domestic trade-off always operates the material sense and economic development. The existing international regulations also promote the need of adopting environmental friendly strategies (Cassel, 2001). This means, besides understanding and complying with the set international regulations, it is the undertaking of multinational organisations to assume strategies that are beneficial to the society. Adopting a policy that benefits the entire society and environment will not only be useful in befitting the current generation but will also have a productive impact on future generation (Machan, 2007). In going beyond complying with the set international and domestic rules and regulations, multinational organization will also learn the most effective means of balancing between the material sense and economic development. The ability to balance between the two critical economic factors will also be of essence in improving the organisation profitability without compromising both the society interest and the environment. Modern business entity can also avoid engaging in illegal activities through passive responsibility that include resting from engaging in harmful activities and operations, or through engaging in activities that are helpful to the society and harmless to the environment.
The instrumental theory can also be used to explain the reasons why it is accurate and appropriate for modern multinational organisation to be accountable for more than just adhering to the set international and local rules of regulations. The theory can also be of essence in understanding some of the reasons why multinational organisations should operate with international and national ethical codes of conduct. According to instrumental theory, the core aim of starting a business is to attain economic goals and objective and in creating wealth (Phillips, &Freeman, 2003). As observed by the pioneers of the theory, the core responsibility of business in modern society is to maximise profit to the shareholders with the ethical custom of the society and in accordance to the set legal framework. So far, the instrumental theory has received supports and acceptance among business actors. Although the theory has emphasised on the importance of maximising profit in modern business entities, the instrumental theory has emphasised on the importance of meeting the interests of other involved stakeholders.
As observed in the theory, meeting the interest of the society and the environment can play a useful role in maximising the shareholders value in the society. Furthermore, acting in accordance to the set international and domestic regulations will also be useful in dealing with emerging social and economic challenges. Abiding by the existing regulations should not be used as a mean of undermining social needs and demands. Instead, international and local regulations should be used at benefiting both the organisation in increasing its profit and the society (Carroll, & Buchholtz, 2002). Environment is also another useful factor that should be considered prior to abiding by the set rules and regulations. Based on instrumental theory, it is therefore accurate and appropriate for multinational organisation to b accountable beyond complying with the set regulations and acting in accordance to domestic and international rules and regulations.
The integrative theory is also another model that is useful in describing some of the reasons why it is legal and appropriate for multinational organisations to be responsible beyond abiding by the existing rules and regulations. The integrative theory examines the manner in which business entities integrates social demand in its operations. According to the theory, despite abiding by the existing rules and regulations, business organisation relies on the society and the environment in improving its operations. Social responsible is therefore useful in rewarding both the society and environment for the contribution in improving the business profit. As stated in the integrative theory, social demand is the only way in which society can integrate with multinational business entities. As a result, despite abiding by the set regulations and rules, cooperate management have the responsibility of considering social demands and incorporate them in its activities in such a way that business operations are accordance to the set social values and norms. In reference to the theory, it is also clear that business responsibility is determined and influenced by time and space on each situation (Kaptein & Van Tulder, 2003). The manners in which an organisation complies with the set regulations also depend on the value of the regulation to the society at one particular time. Therefore, each organisation has its own responsibility in the society that determines the manner in which it abides with the set regulations.
Furthermore, with an aim of preserving the environment and cultural norms and values, there exists an international and local regulation that forces multinational organisation to be responsible for their actions at all levels. International environment pacts, regulations forces multinational organisations and domestic organisations to take the responsibility of respecting the environment. This because environmental degradation is directed linked to increase industrial and business operations and activities. In reference to the available statistical research findings, it is clear that over 23% of environmental degradation is caused by the operations and activities of multinational organisations (Carroll, & Buchholtz, 2002). Although a good number of multinational organisations have received accreditation for abiding by the set international and domestic rules and regulations, their activities have detrimental impact on the environment and cultural beliefs and practices (Murphy, 2002). Therefore, by considering the impact of multinational organisation operation to the society and the environment, there ought to be a regulation policy and law that will force all business entities to be responsible beyond merely adhering to the set regulations and acting in accordance to the set international and domestic code of ethics.
The current legal argument on the issue of the social responsibility of multinational organisation has also raised significant ambiguity. According to the leadership and management of modern multinational organisation, abiding by the existing regulations and acting in accordance to the existing domestic and international norms is adequate in integrating community members in their operations. As observed by the existing rules and regulations, the main obligations of multinational organisation are only to abide by the existing guidelines (Rossi, 2001). However, based on the impacts of multinational organisation operations to the society and the environment, business entities should act beyond acting accordance to the set regulation. Environmentalist also argues that despite abiding the set regulation, all business entities and individuals should take their role in preventing the environment. Business entities should not use the environment to improve their profit without taking the responsibility of preserving the natural resources. These conflicting arguments have resulted to continuous legal conflict between environmentalists and business investors.
On the other hand based on the regrettable impact of multinational activities and operations to the environment, the existing law courts should consider compelling business entities at all levels to engage in activities that would help in environmental preservation. Involving multinational organisations in activities that would return to the society will be useful is not only preserving the environment but also in protecting cultural practices (Zerk, 2006). On their part, legislatures and other policy should help courts in preserving the environment and other useful cultural practices. Passing a regulation that will forces multinational organisation to be responsible of their activities will be useful in easing the legal process. Although the existing legal analogies has proved reliable and appropriate in forcing multinational organisation to be accountable of their actions, an effective regulation that will hold multinational organisation to be accountable for their impact to social development will be vital and critical. Teamwork among business entities and lawmakers and implementers will also be useful in reducing the unnecessary and preventable conflict between all actors. Researches should also be put in place with an aim of understanding some of the missing information in involving the multinational organisation in social and environmental preservation.
Apparently, it is factual to conclude that it is appropriate and worthy for multinational organisation to be accountable for more than adhering to the existing rules and regulation and in acting within domestic and international ethical norms. Involving multinational organisation in activities that would prevent the environment will be vital in helping these business entities in understanding the importance of being responsible for their activities. Based on the available information, it is also apparent that environmental and social degradation is mainly caused by activities of multinational organisations. This means all stakeholders should be responsible of their activities to protect the interests and demands of the future generation.
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