International Business: An Asia Pacific Perspective, Second Edition

14. Ethical and Social Responsibility in Multinational Management

Managers in a company are responsible to its shareholders and other stakeholders. Typically, shareholders who tend to have profit-related goals, are the stakeholder group to whom managers often feel the greatest responsibility. Yet a firm has a variety of other stakeholders – its employees, its customers, the people in the communities in which it is situated, to name a few – to whom it also has responsibilities.

The decisions a firm’s managers make will have an impact on each of these groups of stakeholders. In many cases, a firm’s decisions have an influence beyond the immediate corporation itself. For example, a decision by an electronics company to close a VCR assembly plant ...