4.4.2 - Ethics

Question 1

What is ethics

Answer 1

• Ethics mean having moral principals that govern how a company does business. A moral principal is one that knows right from wrong.

Question 2

What would be typical shareholder objectives

Answer 2

• High profits
• High dividends
• Growth
• Return on their investment
• A positive corporate image

Question 3

What would be typical ethical corporate objectives

Answer 3

• Low emissions
• Safe waste disposal
• Paying fair wage rates to employees in other countries
• Sourcing sustainable raw materials

Question 4

What are pay conditions like for MNC’s

Answer 4

• Pay varies around the world, as does the cost of living
• There are thousands of videos on the internet which explain that MNCs don’t pay fair wages that the locals can live on – which is exploitation
• Owners want low costs and low wages, employees want higher wages that they can live on

Question 5

What are working conditions like for MNC’s

Answer 5

• Working conditions in developing nations can be well below those of industrialised nations
• Owners want high profits and so may cost cut health and safety measures e.g. no fire escapes

Question 6

What are some environmental considerations for MNC’s

Answer 6

• Emissions
• Waste disposal

Question 7

What are MNC emissions

Answer 7

• An emission means the production and discharge of something, especially gas or radiation

Question 8

What are MNC waste disposals

Answer 8

• MNCs regularly flout or ignore “weak” environmental laws in India and other developing nations
• The owners want to keep costs down, good waste management is expensive and so there is a stakeholder conflict with those that live near these toxic dumps

Question 9

What is a supply chain

Answer 9

• A supply chain is a system of businesses, people, activities, information, and resources involved in moving a product or service from supplier to customer.

Question 10

What are the problems with supply chains

Answer 10

• Having part of a supply chain in a developing nation can be a problem for the MNCs
• Many garment factories or labour intensive production processes outsource to slums, refugee camps and unlicensed back street businesses with poor working conditions
• This can mean that labour is intentionally or unessentially exploited by the MNCs

Question 11

What is forced labour

Answer 11

• six forced labour indicators:
• threats or actual physical harm to the worker
• restriction of movement or confinement to the workplace
• debt bondages
• withholding of wages or excessive wage reductions
• retention of identity documents
• threat of denunciations to the authorities

Question 12

What is child labour

Answer 12

• Some children are trapped in forms of slavery in armed conflicts, forced labour and debt bondage (to pay off debts incurred by parents and grandparents), drug trafficking and organised begging and in many other forms of labour.
• For some work, children receive no payment, only food and a place to sleep
• Poverty is the most common reason why children work
• Poor households spend the bulk of their income on food and the income provided by working children is often critical to their survival