All of us understand that the law is a floor for judging our behavior, an absolute minimum standard of conduct that one must follow. Anyone doing business in a foreign country understands that he or she must abide by the laws of the host country.
But what about the unwritten or informal rules of doing business there—rules based on culture, religious codes, and societal constraints? Sometimes these laws can be very different from those in one’s home country or in other countries in which one is working. Pollution may be a crime in one country and tolerated in another; bribery may be a crime in one country and customary in another. What is an accepted practice for employing children in industry in one country may be abhorrent in another, and so on. How does the multinational manager reconcile differences like these? What is the appropriate standard of ethical conduct for a multinational manager—that of his or her home country, the host country, some internal personal value system, or something else? How will the manager be influenced by the laws, unwritten rules, and cultural values of the host country? How does one balance his or her social responsibility regarding the health, safety, and well-being of the people of the host country with the company’s overall objective of maximizing shareholder profit? What can a multinational corporation do to aid its managers in the development of a personal value system that is in keeping with the legal and cultural values of their host countries?