Managing Ethics and Social Responsibility Challenges in Multinational Companies
Managers in both public and private departments may encounter intricate ethical and social problems as they try to make informed choices such as staffing, promotions and even compensations. Companies operating under diversified surroundings may encounter stiffer challenges and decisions as they have to apply various values and mechanisms. For example, people living in individualistic communities tend to place a higher priority on facts and truth while individuals in multifaceted societies are more collectivistic and prioritize loyalty than truth. Examining cultural diversity, ethical and social responsibilities is vital for the contemporary manages and workers (Kolk, and Van, 2010, p 119). Through the understanding of ethics and social obligations, administrators and personnel are better placed in handling sustainable competitive matters while averting illegal activities. In the near future, managers will be required to be more effective and productive in matters pertaining social and ethical responsibilities. Also, managers should act creatively and consistently in order to rectify mistakes emerging from multinational organization’s framework. Social responsibility assists a multinational organization focus on social aspects of entire company (Scherer et al., 2016, p273). Managers are expected to conduct themselves legally, economically and morally before they can be seen as socially responsible.
Corporate ethics assumes various supplementary dimensions whenever organizations transforms into a multinational entity (Cullen, and Parboteeah, 2013, p486). Even though the guidelines for ethical mannerisms may vary from one region to another, organizations should consider the host nation’s values alongside the necessity to demonstrate open-mindedness and reception of foreign region customs. Most of the times, business owners fail to define company values hence are forced to adapt new practices which are universally accepted.
Respecting local customs should be done according to the host’s perspectives and policies. An organization conducting business in another country is not considered an invader but rather a guest and must adhere to the customs familiar to the locals. This might generate ethical dilemma. For instance, an American business ought to provide equal salaries to the locals regardless of gender or nationality (Cavusgil et al., 2014, p196). Thus, a multinational corporation’s ethical and social obligations reputation is a vital aspect in strategic administration. Ethical conduct normally goes beyond the lawful comportment and be highly influential to multinational corporations in various nations. Social responsibility conduct gives a company a brand meaning to the local people. Various cultures interpret social and ethical obligations quiet differently. Moreover, a multinational’s social and cultural surroundings alter with time hence a multinational company should always change its approach from time to time in order to align its operational activities to the values of the host’s nation. Consequently, a multinational company needs to consider its stakeholder’s perspectives on local and foreign issues. There are three factors which make up a multinational company’s social and ethical surrounding- local, international and host nation (Luthans, and Doh, 2018, p241). The key ethical and social responsibility values and preferences might be of great concern for the top management team on an international scope. For foreign subsidiary, the objective should be customizing applicable and informed policies and operative procedures. Some of the ethical and socially inclined obligatory values and preferences might be similar across a global scale especially if the countries in question are regional neighbors. Even among traditionally close nations, the precise understandings, executions and urgencies of ethics and social obligations differ greatly. Ethical and socially responsible conducts are traditionally connected (Wang et al., 2016, p132). Even so, the globalizations mechanisms evidently relates nations based on related local matters hence making ethical issues more profound and uniform. Thus, this issues might be general- integrity or even honesty. Based on past researches, combining ethical and social managerial concepts helps in strategic management and decision making at top positions of companies (Harzing, and Pinnington, 2010, p111). There need to be operational and supportable social obligations frameworks to handle the various emerging challenges. Before an organization is considered ethical and socially responsible it should be able to attain high levels of performance in each and every level of the economy.
In the current world, there are various perspectives on social responsibility. Hence social responsibility is not well defined. On the other hand, ethics defines wrong from right. Most establishments can manage ethics by creating ethical management curriculums. Normally, ethics courses instill corporate values, frequently using programs and strategies to direct decisions and conduct, and could comprise of broad teaching and assessing, reliant on the needs of the multinational corporation (Lenssen et al., 2011, p227). They might offer guidance and dilemmas. It is hard to find two programs matching in terms of needs and conditions. Most multinational companies have ethical programs. An average ethical program comprises of value, guidelines, and actions which influence external and internal mannerisms of the organization.
For further emphasis, multinational companies find it difficult comprehending and adhering to various regulations, managing workforce situated far from the head offices, serving clients and connecting suppliers and business partners’ prerogatives (Fernie et al., 2018, p143). Due to the mentioned challenges multinational companies have to come up with mutual corporate values in order to harmonize and embrace one culture. Multinational companies encounter various issues such as fostering a culture of ethical behavior in all host nations they operation in; and how to comply with various network of multifaceted legal and compliance regulations present in various locations. The solution to overcoming ethical and social obligations challenges lies in creating a systematic holistic strategy that will influence a broader region. International ethics and values exist in different procedures and certainties (Vaiman et al., 2012, p786). These ethics include fundamental human socializations such as respecting differences, trust and an honest way of doing business. The need for international ethics and specialized principles relies on self-comprehension, tolerance, appreciation for unique aspects of the host nation’s people. Most multinational companies are not coerced into taking ethical and social responsibilities, they just comply. For the sake of promoting an international multinational tradition, organization must generate a unified culture which complies with accepted corporate conduct in all international operations while regarding local personnel and their customs. Majority of the firms claim that integrating international principles based on acceptable business norms will allow local guidelines to integrate with local cultures. The advantage of using international principles to formulate local policies is that international standards are most likely to strengthen an organization’s values and endorse the company culture in order to instill international ideals of business mannerisms (Vaiman et al., 2012, p215). Thus, local frameworks prove that respecting local cultures helps in motivating the local workforce to work better. It is vital to note that business can advise their workers not to accept gifts which seem to influence the company against the local’s traditions. In some places gifting might be interpreted as bribery which in turn might lead to unlawful business practices. This is the main reason the managerial teams should always focus on the main issues and activities of the company.
Social Entrepreneurship
Social entrepreneurship is quickly gaining traction due to the amount of skills, finances and attention. However, with the concept of social entrepreneurship comes the functionalities its core ideas. By definition, social entrepreneurship is an interesting construct because it centers on an individual. Thus social entrepreneurship is an individual who follows fresh applications which have the ability to unravel communal challenges. These people are determined to take risks and make an effort to produce desirable changes within the community through certain initiatives. The in-depth usage of ethical mechanisms such as impact investments, consumerism and commercial social obligations programs enable social entrepreneurs to thrive in various market environments (Fadun, 2014, p13). It important to note that social entrepreneurs are interested putting up a business entity to serve the community rather than make profits for themselves. Social entrepreneurs might sought out the production of environmental friendly items which serve the community or initiate philanthropic undertakings. Social entrepreneurship is a rising trend and helps in the investment of different business ventures. Hence, social entrepreneurship is gradually gaining pace in the corporate world due to volunteerism and community obligation. It integrates a common cause with industrial ethics and social obligations. More so, the concepts of social entrepreneurship have enlightened on the need to cater to the welfare of different members of the community (Crane, Matten, and Spence, 2013, p15). One of the most important role of business communities apart from fulfilling legal and technical obligations is protecting the community from adverse effects. Traditional business frameworks are usually focused on making profits consequently concentrating their efforts on increasing efficiency and productiveness in order to meet the market demands on a timely basis. Nonetheless, the market size and resources are restricted and the competition is always on an upward trend. This forces business owners to not only focus on increasing their profits but also develop social aspects of the community (Visser et al., 2010, p219). With the increasing social challenges, new problems have forced commercial business to adapt business models which accommodate social aspects of the business. Thus corporate social responsibility has forced corporates to balance social pressures hence remaining afloat. Thus businesses are able to maximize on profits while focusing social value the business offers on the surrounding communities.
Social entrepreneurs play a crucial role in the society as they upgrade systems, devise innovative practices, grasp chances others ignore and produce solutions which change the community forever (Aguinis, and Glavas, 2012,p932). Social entrepreneurs are different from the usual conventional business models. The first difference lies in strategy. In social entrepreneurship, business strategy applied is collaborative rather than competitive due to the objective of social entrepreneurs. Secondly, social entrepreneurship business are attained via ownership share issuance or short term loans. In terms of market, social entrepreneurs operate under marketing surroundings where the expenses are not completely included the income.
Social entrepreneurship entails identifying social issues and then applying effective business ideologies, mechanisms and functionalities to bring about a solution. Thus, one has to isolate a certain community problem and then organize, generate and manage societal undertakings in order to achieve the desirable change (Kanji, and Chopra, 2010, p119). The change may not completely do away with the actual social challenge, but it may continually focus on upgrading solution so that it can at lease alleviate the present social challenges. Even though social entrepreneurship centers on producing social capital without considering the profit margins or the financial assets, social entrepreneurs are nonprofit entities by nature and help to come up with sustainable solutions to existing challenges. Apart from societal challenges, social entrepreneurs also concentrate on environmental challenges. For instance social entrepreneurship entities might focus on planting trees and empowering women (Renouard, 2011, p85). Thus, social entrepreneurship is associated with non-profit activities and public events. In the current society. In simpler terms, social entrepreneurs are interested in the welfare of the community and ensure that everything runs smoothly for the betterment of the community and other issues. In the long run everything in the community is under control and people can go about business as usual. Social entrepreneurship combines social issues with commercial principles.
Women International Management
One of the most pervasive myths is that women cannot assume managerial positions. However, as time went by, women have broken the glass ceiling in the management positions. The increasing importance of intercontinental commercial operations is unavoidable to the present day economic trends (Du, and Vieira, 2012, p413). The percentage of international business is gradually rising in different parts of the entire world. The increasing importance of international commercial activities signals the growing urgency for managers who can handle the complex business activities. Conventionally, for a long time, men have occupied managerial positions. Even though in the last ten years, women have slowly taken up managerial positions, in the international domain women are very few. In the current situation, men outnumber women as men as international managers. An expatriate manager is a skilled worker sent to a foreign nation to fill in a managerial position. In the past most international managers were men but recently, women have slowly taken up the positions and have proven effective. Past researches have proven that most women are domestic managers. The increasing number of women in managerial positions is due to changes in social, economic, mechanical advancements and most notably the legal surrounding (Crane et al., 2019, p280). For instance, in America women are entitled to an equal pay due to the Equal Pay Act of 1963. Also companies are required to meet gender parity policies while staffing their workplaces.
A lot has been said and done for women in international management. Based on data from one survey, women are more likely to occupy international managerial position if they work under financially strong companies. This is because companies with more capital and widespread public acquaintance may be forced to comply with gender parity policies from the government hence consider creating more job opportunities for women. Moreover, organizations reluctantly send women to international assignments hence always micromanage women while in the foreign nation (Katamba et al., 2012, p396). For instance, women are more effective communicators than men hence are able to foster good relations whereas men are more dominant in their management style. These variances then impact gender relationships, managerial styles and usually lead to conflict as men and women are generally different from each other. Leadership research shows that men and women have different managerial styles. Despite of the variances in leadership styles between women and men, the end outcome is the same. Thus men and women attain the same outcomes. Most of the times, women are seen as weak and most men stereotype then thus forcing executive board of directors to avoid on picking working women for top managerial positions (Abu, 2012,p475). Most of the times organizations are used to a dominant male manager who control everything from the top to the bottom. However, placing a woman at the helm of a company signals gender neutrality where everyone is recognized for their skills rather than their gender. Thus, the placement of women in international managerial positions signals the rewarding people for results and their work ethic. Additionally, women in the international managerial positions might vary depending on the organization and positions which in turn dictate the duties. In the current world, diversity management is key in the development of international companies. As part of strategy the growing demand for intercontinental delegates, has helped the number of women in international managerial positions to increase tremendously. In fact, the number of women in international managerial positions has led to a certain desired effect (Santos, 2012, p335). The participation of women in international operations under the administration of multifaceted set of traditional, societal, legal, financial and political within the innate surrounding of the host nation are influencing women.
Ambicultural Approach to Management
An ambicultural environment helps in the fostering of good relations between different cultures. In the wake of economic crisis, experts and managers are looking for creative ways of ensuring that the market needs of the consumers are met and profit margins among the consumers are maintained through so that the company can remain afloat (Dacin et al., 2011, p1203). The combination of western and eastern cultures assisted Chinese business thrive in western regions due to the integration of different cultures in management of business operations. Even though the Chinese and the western regions have been business partners for long, different communication styles have prevented them from effectively managing how their consumers view them. For instance, the Chinese prefer nonverbal forms of communication while western people prefer verbal forms of communication (Defourny, and Nyssens, 2010, p32). Communication and directing business decisions needs a concrete management systems that surpasses language barrier. The Chinese people focus on building relationships as the basis for conducting a business. On the other hand, Americans rely on quantitative sources such as profit margins and expenses and try to avoid uncertainties. Different kinds of thinking might hinder comprehension between the two regions. Ambicultures allows these group of people to coexist and understanding each other (Shortland, 2016, p665). Ambiculturism encourages openness and ability to overlook cultural differences for the greater good. In the end ambiculture promotes productivity and acceptance of various mechanisms as a means to an end. In the end, ambiculture bridges in two differing cultures. However, ambicultural concepts are applicable to international business where a business relies on more than one culture to purchase its products.
The Ability of Japanese Firms to Globalize
Just like any firm or business venture, Japanese firms can easily globalize their brands in order to capture a wider market and in the process increase profit margins. In this period of globalization, it is important for companies to look for other lucrative market spaces in other regions. In the current business environment businesses are shifting production to oversee sites where the raw material are cheaper and labor is affordable (McNulty, 2014,p124) One of the key ways through which Japanese firms can globalize their brand is through the removal of a barrier. Japanese people have a unique language which is only unique to them. Before initiating plans to globalize, the firms will have to label their merchandize using a universal language such as English. Removing a language barrier is one of the most effective way of penetrating global markets. Secondly, the ability to come up with effective mechanisms for marketing is important for the floating the business models and ensuring that all other aspects of the business work seamlessly (Matsa, and Miller, 2011, p635). Globalizing a company pertains surviving hard economic times hence the need of coming up with effective means of implementing the issues in a manner that affects the firm effectively and appropriately. More so, increasing production will help Japanese companies supply their items to other regions. Thirdly, changing the global mechanisms to fit international standards. Thus, the Japanese companies will have to change their workforce and include people from the host country.
Small and Medium Sized Companies’ Enterprises in International Management
Study aspects upsetting the internalization of small and medium sized businesses is gaining the much needed attention. Nevertheless, only few researches center their empirical data on businesses. Communication is the first effective tool one needs to internationally manage small and medium sized businesses (Amatucci, and Crawley, 2011, p370). Hence, the managers need to communicate openly and often as possible without creating any bias. Managing workers situated in a foreign location requires good communication skills in order to build trust and attain certain objectives at the same time. The second step is closing the disparity emerging from technological advancement. An isolated business network is vital for the management of international teamwork and suitable technological mechanisms assists in international management. Sharing technological advancements, shared workspaces and cloud facilities helps to keep businesses afloat. Thus, the management of technological frameworks help in the management of international businesses (Harzing, and Pinnington, 2010, p345). The third aspect is embracing cultural variances so that consumers can feel appreciated and management can accurately cater to the needs of the consumers hence the need to come up with business plans that respect religion and other aspect of people’s lives and then the business should learn how to embrace various cultural perspectives.
Corporate Leadership
The scarcity of highly skilled managers has impended the rate at which Asians companies can move into the international market (Cavusgil et al., 2014, p516). The development of information reliant societies together with penetrating emergent market places resulted in strategic corporate leadership. Human resource and skilled people are significant in business management and giving companies a competitive edge over other rivals. Corporate leaders had to narrow down the gap between multinational organizations and human resource teams. Corporate leadership has to consider the proper management of human resource by giving the staff the right jobs and also placing the right operational procedures within the company.
Internationalization of Emerging Market Companies
The internalization of an emerging market easily helps the company interpret the needs of the consumers (Bower, and Paine, 2017, p165). With the increasing or taking away the need for the demand and supply, consumers have to shape the entire marketing needs. International activities within emerging markets tends to advance with each passing day. Experts confirmed that emerging markets are different from other developed economies. A common rationale behind the advancement of emerging markets is the internalization and contextualization of emerging markets helps in risk diversification hence ability to explore different experiences with intensified technology and social networking via cultural associations. Thus, an emerging market helps an organization spread its networking abilities and penetrate new markets. More so, aspects of an emerging market helps in the management of operational affairs and helps companies hence helps a company trace theoretical and practical aspects of the market space.
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