Economist Milton Friedman once said, "responsibility... generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom". Business ethics reflect the fundamental purposes of a company and are extremely important for multinational corporations, especially when trying to expand their brands into new countries and cultures. As globalization further expands, multinational corporations find that business integrity is perceived differently in different countries and often poses a challenge for business expansion.
Many of the ethical issues and dilemmas in international business are due to the fact that political systems, economic development, and culture vary significantly from nation to nation. Common ethical issues involve corruption, human rights, environmental regulations, moral obligations of multinational corporations, and so on.
Biopiracy is a common ethics issue and it is when the knowledge of indigenous people, without permission, is used by others for profit. For example, the U.S. Corporation RiceTec attempted to patent certain hybrids of basmati rice in 2000, but the Indian government claimed that it was invalid. This act is not only unethical, but also violated global patent laws. If acts like these are not addressed or dealt with, industries and workers in developing countries can be negatively impacted in a major economic way.
Corruption has been a problem in almost every society in history, and it continues to be one today. International businesses have gained and continue to gain economic advantages by making payments to government officials. Bribery violates fair trade regulations and challenges small-to-medium size businesses when they try to expand abroad. It raises costs for other companies and damages the reputation of the company involved in the bribery when the news is revealed. To make international trade fair and transparent, many countries have come up with corrupt acts and regulations. These include the Foreign Corrupt Practices Act in the U.S, The UK Bribery Act, and the OECD Anti-Bribery Convention for developing countries.
As multinational businesses are becoming increasingly prevalent, the need for international business ethics has intensified. Cooperation is required from all parties to solve these problems. Specifically, governments should set up regulations and policies to maintain fair trade in international business and multinational corporations should be careful with the way business is conducted abroad.