Unethical Issues in Mnc

Introduction

Labor rights or workers' rights are a group of legal rights and claimed human rights having to do with labor relations between workers and their employers. In general, these rights' debates have to do with negotiating workers' pay, benefits, and safe working conditions. In labor’ perspective, wages are the principal means for satisfying the basic economic needs and working condition are related to their life in term of safety and health. But employers have an opposite viewpoint on these two criteria. Lowest cost production is their main consideration rather than providing a safety working condition. Hence, it caused the exist of sweetshop that has challenged the labor right. The term sweatshop is used to describe a workplace that has numerous health and safety hazard and poor working conditions, as well as low wages. Normally, sweetshops can be easily found in developing nations and most of the sweetshops are not owned by the companies for which they produce their goods, it belongs to multinational companies. In this case, we will analysis six different multinational companies (Walt Disney, GAP Inc., Nike Inc., Gucci, Nestle, and Apple Inc.) which having a similar practice that operating sweatshop in developing nation especially in Asia, and we will figure out how they void the labor right and what is reason labor abuses happen mostly in developing nation.

Part 1: How they void the labor right?

The basic ethical issue in this case is the violation of labor rights, through non-remunerated and forced work, workplace hazards, inhuman restrictions, and other unreasonable policies.

Outsourcing of manufacturing by selecting a local firm in developing nation was the tactic play by most of the multinational companies to involve in illegal labor practices because it was the best excuse for denied the illegal practices. Why they selecting developing nation instead of developed nation? We will figure it out in part 2. For example, Nike does not launch its production directly to the developing country, such as Pakistan, but instead it outsources the manufacturing by subcontracts to the selected local firm in Pakistan. Why?  That is because by using subcontract, when the multinational company like Nike was question about it labor practice, everything of the action can be throw to the sub-contractor since Nike has implemented their rules and regulations effectively for their subcontractor, but the problem is contractor does not abide to it. Hence, by using this ridicules reason, Nike has denied the claims many times, suggesting that the company has no control over sub-contracted factories. In addition, Nike did study the Pakistani market and fully know that child labor is no precaution in Pakistan before entering the market (same as Nestle, regarding to the illegal and forced child labor is rampant in the chocolate industry), so Nike choose to subcontract with local firm at Pakistan, it obviously might reduce the production cost as they looking for. As result, Nike has made a profit from its Pakistani contactors who in turn has used bonded child labor in the production process that lower the production cost.