Asked by Greyson Grubb on Jun 26, 2024
Verified
Legal, political, and ethical challenges to global business can be found in many arenas. What are the challenges to business that emerge from the actions of a host country and those that emerge from the actions of a home country?
Legal Challenges
Disputes or obstacles that arise in the enforcement or interpretation of laws.
Political Challenges
Issues, obstacles, or conflicts that arise in the context of governance, policy-making, or public administration that require strategic resolution.
Ethical Challenges
Situations or dilemmas that require individuals or organizations to choose actions that are morally right but may conflict with personal or societal norms.
- Identify legal, political, and ethical challenges in global business.
Verified Answer
For example, U.S.-based Intel manufactures semiconductors in China and Costa Rica, among other places. Its home country is therefore the United States, while China and Costa Rica are host countries to its global operations. To succeed, Intel must meet government requirements and local customs in all three countries.
The potential host-country costs include complaints that MNCs extract excessive profits, dominate the local economy, interfere with the local government, do not respect local customs and laws, fail to help domestic firms develop, hire the most talented of local personnel, and fail to transfer their most advanced technologies.
Whenever a domestic employer outsources jobs, or cuts back or closes a domestic operation in order to shift work to lower-cost international destinations, the loss of local jobs is controversial. Corporate decision-makers are likely to be engaged by government and community leaders in critical debates about a firm's domestic social responsibilities. Other home-country criticisms of MNCs include complaints about sending capital investments abroad and engaging in corrupt practices in foreign settings.
Learning Objectives
- Identify legal, political, and ethical challenges in global business.
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