Question

As the number of multinational corporations continues to grow, we are experiencing a greater number of international ethical dilemmas. One very real concern has been the human rights abuses in sweatshops in exchange for cheap labor. Several retailers have now banded together to set ethical standards in foreign factories. Which of the following statements summarizes the challenges of companies doing business in developing countries and the concerns of their customers??A) Multinationals must subjectively determine the local living wage, which is usually more than the local legal wage in developing countries. Customers surveyed say they are willing to pay a few dollars more to improve working conditions in sweatshops.
B) Economically sensitive customers want companies to pass along cost savings to them, at all costs, even if the products are made through offshore outsourcing. Companies want to please customers, first!
C) Most multinational corporations have made no attempt to improve working standards at sweatshop factories. They will turn a blind eye to the problem unless U.S. law is passed to force the issue. Customers understand that legal limits come before ethical standards.
D) Multinationals cannot be expected to demand socially responsible behavior from their supplier, including foreign sweatshops. When doing business abroad, the U.S. company need not comply with U.S. law when its supplier(s) is not in the U.S. or on U.S. territory.

Answer 1

Answer: A) Multinationals must subjectively determine the local living wage, which is usually more than the local legal wage in developing countries. Customers surveyed say they are willing to pay a few dollars more to improve working conditions in sweatshops.

Explanation:

Countries where sweatshops are rampant are usually so because the authorities set a low minimum wage which is often done to attract foreign investment.

If Multinationals want to improve conditions therefore, they would usually have to subjectively determine the local living wage, which is usually more than the local legal wage in these countries and that presents a problem because the Multinationals themselves may not be physically present in these countries so gathering such information might prove to be cumbersome.

Customers who are also surveyed generally tend to be willing to pay a little more than they do if it means that those in sweatshops get better working conditions.