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Multinational Corporations (MNC) & Facing Challenges

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Consider the large number of multinational corporations (MNCs) getting involved in philanthropies and local communities' development activities (such as providing financial aid to remove illiteracy and poverty, creating health and safety awareness programs, etc.) in the countries in which they have operations. Discuss the following:

Why are MNCs getting involved in such activities? Are they displaying a sense of social responsibility, or is this merely good business?

Does motivation matter if either way the effort contributes to society? Why or why not?

What is the responsibility of the multinational corporation in the countries in which it has business?

Consider the countries mentioned in your assignments. How can your corporation best behave in a socially responsible and ethical way toward the specific societies it has entered?

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Please see response attached (also presented below), including one supporting article. I hope this helps and take care.

RESPONSE:

Consider the large number of multinational corporations (MNCs) getting involved in philanthropies and local communities' development activities (such as providing financial aid to remove illiteracy and poverty, creating health and safety awareness programs, etc.) in the countries in which they have operations. Discuss the following:

1. Why are MNCs getting involved in such activities? Are they displaying a sense of social responsibility, or is this merely good business?

It is probably a little of both. Social responsibility is a doctrine that claims that an entity whether it is state, government, corporation, organization or individual has a responsibility to society. This responsibility can be "negative," in that it is a responsibility to refrain from acting, or it can be "positive," meaning a responsibility to act. (1) This is an implicit societal expectation for corporation e.g., corporate social responsibility. It is a corporate ethical obligation and responsibility.

In fact, social responsibility and ethical corporate behavior have been promoted vigorously after the scandals of large corporations (e.g., Enron, etc.) who were NOT considering their social responsibility, but instead were often exploiting both the people and the environment. It is about bringing 'ethics' back into business to increase or regain public trust, which had eroded. So, it was about business, but it is also about being obligated to give back to society, at least for most corporations. However, there is large inequality in the means and roles of different entities to fulfill their claimed responsibility. This would imply the different entities have different responsibilities. E.g. that states should ensure the civil rights of its citizens, that corporations should respect and encourage the human rights of its employees and that citizens abide with the written laws. But it also can be more than just that. It can also imply that corporations have an implicit obligation to give back to society; see more under corporate social responsibility and stakeholder theory. (1)

However, we also need to ...

Solution Summary

In relation to challenges of multinational corporations, this solution addresses the following questions: Why are MNCs getting involved in such activities? Are they displaying a sense of social responsibility, or is this merely good business? Does motivation matter if either way the effort contributes to society? Why or why not? What is the responsibility of the multinational corporation in the countries in which it has business? How can your corporation best behave in a socially responsible and ethical way toward the specific societies it has entered?

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