In what ways are MNEs developing new business networks with an ethical Essay

In what ways are MNEs developing new business networks with an ethical orientation Using examples, explain why these developmen - Essay Example The sheer size of these corporations have made them almost like political actors, in the countries they are present and it is believed that their decisions and actions can affect the demography in both positive and negative ways (Holland, 2010). The emergence of the Corporate Social Responsibility (CSR) can be traced to this very point which is concerned with the issue of reducing negative impacts of the corporate on the population of the country. The CSR deals with the ethics and social responsibility of the company, the two major factors in the strategic management process of a country (Godiwalla and Damanpour, 2006). Ethical conduct is a major requirement of the MNEs in countries in which they operate. The expectations of the countries, in which these companies operate, are the major determinant of the ethical and social conduct of an organization. This essay aims to understand the ways in which MNEs are expanding their new business networks, considering the ethical considerations and the way these contribute in building competitive strength of the companies. Business Ethics: Definition There are numerous definitions of business ethics that can be considered. For the purpose of this essay, business ethics can be defined as the principles, values and standards, which guide the business in its conduct with the external world (Ferrell, Fraedrich and Ferrel, 2011). Principles include the basic rights like, freedom of speech, justice and equal rights, which are universal and form the basis of the rules. Values, on the other hand, comprise of social norms established by conventions in the society which are socially enforcing. These include integrity, accountability and trust and the standards for these are largely determined by investors, employees and interest groups and influence the society’s acceptance of what is permissible or not by the business. Strategic ethic management has the potential of improving both the economic and ethical goals of MNEs, whe n they consider expanding the existing business to new geographies. Research work has shown that there is a positive correlation between ethical business conducts and long-term financial development of the companies (Takei, 2011). This prompts companies to take ethical issues seriously in their expansion. The causality relationship between the profitability growth and business ethics are yet to be confirmed. Empirical evidences show that there are positive correlation between financial growth and ethical considerations. These discoveries imply that the strategic management must take into consideration the aspect of business ethics in their management process (Krishnamurthi, 2008). Rationale for business ethics Business ethics forms an important responsibility of the manager who conducts the business. The need for implementation of business ethics is more severe for managers who have the responsibility of conducting foreign operations as they face more pressing ethical issues which a re absent within the domestic borders (Luminita and Constantin, n.d.). There are various reasons responsible for this difference like: Firstly, the difference in the legal and political structure of a country in which the business is likely to operate. These differences are further pronounced by the ethical and traditional conventions of the society. Secondly, the differences between the economic organizations of countries in