Identify ethical issues that arise in domestic and global business environments using an understanding of ethical concepts and of legal and business principles

Issues

Ethics and ethical issues are significant in the domestic and global business environment as they indicate what is right and wrong. Businesses that adopt universal ethical standards perform better and enjoy a positive image in the society, a proper way to ensure long term operations. Several ethical issues can arise in both domestic and global business environments including moral principles in domestic contexts, intellectual property, innovation, and employment, among others (Gokmen & Ozturk, 2012). 

The domestic context refers to the unique setting of a host market with features like cultures, education, moral values, and legal instance that are specific to that particular market. While operating in a host country, an international business should consider that ethical values are different in every host market. Saying so, the moral values and culture in the host country determine ethical perceptions that estimate the mindset of clients. However, the moral obligation of a company is to produce products that meet ethical, legal and moral standards in sourcing raw materials, production and selling. 

Another issue that arises in domestic and international business environment is employment. International businesses that carry out operations in host countries are expected to provide employment opportunities to the local people. These businesses should have set standards that will guarantee a living wage for the employees, with acceptable pay levels and working conditions.  

Intellectual property protection is designed to reward investors for inventions that have proven to be useful, novel and non-obvious. Research and development particularly in the pharmaceutical industry is very costly and companies are given a patent to cover these costs. The issue that arises in patenting is whether much good is realized by having patented research or by not. A patent should not be monopolistic (Gokmen & Ozturk, 2012). 

Case study

Nutriset, a French company produces Plumpy’nut® a peanut-based paste that is high in energy and is made up of sugar, skimmed milk powder, vegetable fat, vitamins and minerals. The paste can treat chronic and severe acute malnutrition in children below five years (Rice, 2010). 

The company acknowledges the different domestic contexts of its host countries. UNICEF to treat malnourished children in Africa and Asia, purchases the product. The company has partnerships and franchises in these countries to produce the product. It therefore produces its products locally and with locally grown produce following the set local standards. However, ethical issues have come up regarding production in countries in the developing world whose peanuts are high in aflatoxin that causes sickness among children. The company should source raw materials that are safe and secure for human consumption. 

Local production in host countries has enabled the company to employ local population. In Niger for instance, the company has a factory that employs about 90 local people. The company also works with producers in several countries in Africa, Asia and America who produce 40%of the product. This shows that the company promotes local employment in host countries. 

The company has the formula for Plumpy’nut® patented and its production capacity has been impressive. The patent has enabled the company to do more research and come up with a better formula to re-nourish starving children. However, the issue that arise in patenting is whether much good is realized from the patent than when other companies are allowed to produce the product. Plumpy’nut is also expensive hence unaffordable for those in the developing world. According to FAO, increased production of Plumpy’nut is urgent as malnutrition is rapidly growing. Allowing other companies to produce the product at reduced prices and large volumes will greatly lower mortality rates from malnutrition (Morrison, 2013).