Business Ethics and Virtue Ethics
As the multinational companies extended their operations beyond the geographical boundaries, there was an absolute need for such corporations to really consider the personal and cultural values of individuals living outside their countries of origin (Fadil, 1999). Therefore, such organizations had to be equipped with adequate principles since variation in cultures was a big challenge to corporations moving beyond borders. It often led to disagreements and conflicts with other organizations or even individual members of society. One of the main aspects of culture that likely resulted in conflict between multinational companies and members of the society was the ignorance of the corporations in respecting the moral values and believes of the different societies of the world. Different societies have different moral values, and therefore individuals judge acts differently. What is right in a certain society may be perceived as wrong in another society in a different part of the world (Fadil, 1999). Sethi et.al (2010) argues that in the recent past, there have been a lot of accusations levied upon acts by multinationals on overseas activities. Several individuals and different societies have accused oversea activities of multinational corporations as unethical and plainly directed towards exploiting the emerging new markets.
In the past, ethics in business was not perceived by managers as an issue of major interest, but today it forms a core principle in operations of every single organization. Globalization, however, has made positive contributions toward the formation of a similar society of the world with seamless moral values (Fadil, 1999). The US was among the first nations of the world to pass legislation in regard to moral issues in relation to the global challenges back in 1977. This was aimed at restraining all the American Multinational Corporations from engaging in unethical practices when operating outside the American soil. Different scholars have resurfaced and aided in the development of the various cultural models to support the decision made by the US government to prohibit multinational corporations from exploiting the new emerging markets. Amongst the most valued model being the theory developed around moral relativism since it is of great importance to multinational corporations. It shows how such corporations should address the different cultures of the world.
Ethics is simply a study of what is right or wrong for the mankind (Fadil, 1999). A virtue describes an admirable human characteristic that can be used by people to distinguish good from evil. Justice, honesty, and fairness are examples of such admirable human characteristics. Justice can be referred to as what is involved in the critical discussions and attainment of what is just. This means giving each and every person what he or she deserves. Application of justice differs with culture, and is therefore varied across different communities of the world. Factors, such as religion, law, and ethics are among the few factors that influence and determine justice. Honesty in a business set up is simply the act of not lying. This is the act of remaining truthful to every act done or statements issued to other individuals may it be employees, colleagues or even customers. Temperance on the other hand refers to self restraint from some actions that one feels are wrong. Different scholars, philosophers, and psychologist have lately developed interest on temperance, as its application in business is new (Brady, 1999).
Applying the Three Virtues in the Mattel Case
Mattel extended its business operations in other parts of the world over 20 years ago (Sethi et.al, 2010). At the time, it introduced general guiding principles that the company used in all its operations all over the world. However, these principles never lasted for long. After some years of operation, these principles were later on dropped following various reasons that can be directly attributed to the change in management of Mattel while some others can only be a part of history, and therefore attributable to the changing times and the increased emergence of new potential markets and the need to exploit them. Factors, such as cheap labor, safety, and health policies as well as the environmental policies have made the emerging global markets a main target for most big corporations of the world today. This is so because when such factors are carefully addressed, an organization attains a competitive advantage over its rivals.
Justice is good for everyone and whenever a person is denied justice, he/she feels offended. Mattel Corporation could still have made use of justice as a part of its guiding principles to its operations outside America, and more particularly outside Europe. Different scholars suggest that the differing justice across the world is highly attributable to differing moral values and believes possessed by different individuals as a result of cultures and religions (Brady, 1999). In the 1990s, most multinational corporations were in the quest for cheaper resources hence the reasons for Mattel expanding its operations to the Far East. In the 2007 incident, for example, justice was never served. In fact Mattel ran away from justice and protected its name from being tarnished. Instead it could have accepted the burden and work on developing new policies addressing key issues of safety of its products to both workers and the consumers. The American culture is quite different from the Chinese culture. That is the reason why China did not take the 2007 incident lightly, and that is one of the reasons why Barbie one of the newest Mattel’s products has failed in Shanghai. The Application of justice would have helped Mattel preserve a future room of investment in the Chinese market.
Honesty is a crucial factor in growth and development of any business regardless of the firm being small, medium sized or a multinational corporation. Every employee has the right to know the truth concerning the operations of the organization. For example, the 2007 incident in China can be attributed to lack of honesty between the involved parties. The supplier was not honest with the plant owner concerning the product’s constituent ingredients. The honesty aspect of human characteristics seems like it would have worked excellently in this situation for Mattel Corporation if it had been applied by the management personnel. Its application would have changed not only Mattel’s working environment but also the public image. Honesty would have helped Mattel’s management create a swift, comfortable, and an adorable market for its products. Lack of honesty in an organizational set up is likely to result in inadequate working condition for the employees and in some situations; this can dangerously harm the reputation of the company.
It calls for self sacrifice to practice temperance. This means that the act of practicing temperance does not come easily. Some actions by Mattel highly needed the intervention of the application temperance by the managers and the directors of the organization. In fact some of the actions were brought about by greed for more revenues. Some actions by Mattel on the other hand are attributable to lack of proper communication between the different stakeholders. Temperance would have helped the Mattel’s management refrain from acts of exploiting the new emerging markets, and not forgetting its attitude towards environment. After the 2007 incident in China that severely damaged the overseas operations of Mattel following the discovery of lead components which tested positive on Mattel’s products, several scholars have stepped forward to condemn the act of using lead to paint dolls while others have come to its rescue by expressing their opinion that it was not the job of Mattel to paint the dolls. But whose products are they? The application of temperance by the management would have made Mattel’s actions look more reasonable to the outside world.
Normative Ethical Theories
According to normative ethical theories, things should be done or should not be done according to how people act or believe. In Mattel’s case, therefore, the most useful theories in evaluation of its case are the virtue ethical theories in that a person’s traits and motives in doing an act are crucial elements in judging whether the act is right or wrong. On the same, Dunchon and Drake (2009) argued that an organization’s lack of a virtuous identity may limit and constrain its morals, and also an organization can adopt identities that would produce non-virtuous behaviors. Therefore, when placed on a tight spot, an organizations motive to protect its identity is far much important than the motive of acting morally.
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