Abstract
This paper addresses two issues. The first issue relates directly to transnational corporations, while the second issue is broader and relates to all diversely held companies. To address the first issue I cite three representative instances where wanton environmental damage has signalled a lack of moral judgment on the part of a transnational corporation. I conclude from these instances that ethical considerations are not given adequate weight in corporate investment decisions.
This leads to the second issue. Who should be making ethical decisions within the corporate milieu? I conclude that neither management nor the typical shareholder should be expected to exercise moral judgment because they are not free agents. They have fiduciary responsibilities that must override personal moral suasion.
Similar content being viewed by others
References
Allmon, D. E. and Grant, J.: 1990, ‘Real Estate Sales Agents and the Code of Ethics’,Journal of Business Ethics 9(10).
Ball, D. and McCulloch, W. H., Jr.: 1990,International Business: Introduction and Essentials, Fourth Ed. (Homewood, IL BPI-Irwin), pp. 9–11, 18, 244–246.
Bartlett, A. and Ghoshal, S.: 1989,Managing Across Borders (Harvard Business School Press).
Dolecheck, M. M. and Dolecheck, C. C.: 1989, ‘Ethics: Take It From The Top’,Business (Jan–Feb–Mar 1989), pp. 12–18.
Ekins, P.: 1989, ‘Trade and Self-Reliance’,The Ecologist 19(5), pp. 186–190.
Gatt: 1971,Studies in International Trade, Industrial Pollution Control and International Trade (GATT, Geneva) p. 239.
Getz, K. A.: 1990, ‘International Codes of Conduct: An Analysis of Ethical Reasoning’,Journal of Business Ethics 9(7).
Jensen, M. C. and Meckling, W.: 1976, ‘Theory of The Firm’,Journal of Financial Economics 3, pp. 305–360.
Keohane, K.: 1989, ‘Toxic Trade-Off: The Price Ireland Pays for Industrial Development’,The Ecologist 19(4), pp. 144–146.
Klein, S.: 1988, ‘Is a Moral Organization Possible?’,Business and Professional Ethics Journal 7(1).
Moore, N. H., Pruitt, S. W. and Maurise Tse, K. S.: 1990, ‘What Price Morality? South African Divestment Decisions and Shareholder Wealth’,Working Paper from Indiana University School of Business, appendix.
Multinational Production Enterprises: 1985, UN Industrial Development Organization, September 10, pp. 1–3.
Shrybman, S.: 1990, ‘International Trade and the Environment: An Environmental Assessment of the General Agreement on Tariffs and Trade’,Alternatives 17(2), pp. 20–29.
Smith, K. R.: 1988, ‘Air Pollution: Assessing Total Exposure in Developing Countries’,Environment 30(10), pp. 16–25.
Thomson, K. and Dudley, N.: 1989, ‘Transnationals and Oil in Amazonia’,The Ecologist 19(6), pp. 219–224.
UN Centre on Transnational Corporations, Environmental Aspects of the Activities of Transnational Corporations: 1985,A Survey (UN, New York).
Vitell, S. and Davis, D. C.: 1990, ‘Ethical Beliefs of MIS Professionals: The Frequency and Opportunity for Unethical Behavior’,Journal of Business Ethics 9(1), p. 63.
Author information
Authors and Affiliations
Additional information
John Dobson is currently an Associate Professor of Finance at California Polytechnic State University, in San Luis Obispo. His primary research interests are Agency Theory, and Financial Ethics. His publications include articles and letters inJournal of Business Ethics, Financial Management, Business in the Contemporary World, andBusiness and Society.
Rights and permissions
About this article
Cite this article
Dobson, J. Ethics in the transnational corporation; the “moral buck” stops where?. J Bus Ethics 11, 21–27 (1992). https://doi.org/10.1007/BF00871988
Issue Date:
DOI: https://doi.org/10.1007/BF00871988