Multinational Corporations: Questionable Payments and CSR

Multinational Corporations: Questionable Payments and CSR

Questionable payments are payments in any form involving no such economic return but a favor in an ethically questionable way”.

U.S. corporations have to abide by laws, while operating within the borders. In other countries, where no such rules regarding such payments are incorporated, there it becomes a decision of firms, whether to involve in such activities or not.

In competing with other firms, American companies engage in diverse activities. One of these activities is; payment of money to a person having authority or having access to those who have the authority to act in interest of the company (Sansweet& Blundell, 1975). These payments can take many forms, which include payments to agents. Millions of dollars have been paid in this regard. Over 400 companies admitted having paid questionable amounts abroad.

These actions by U.S. companies make serious adverse impacts on the image of the country as well. Questionable payments are different from bribe. Bribes can be given to do illegal activities. Questionable activities are often legal in the host country; however, ethical questions can be raised. Bribes are hidden from the public, while these questionable payments are not necessarily hidden by the companies.

Never the less these payments should be stopped, whether in the parent country or, in the host country. MNCs should ethically conduct their business abroad, since the reputation of whole parent country is on stake.

These payments to political campaigns comprise a huge amount of spending of these MNCs operating abroad. However, they try to overcome it in the media by claiming that it is not illegal in the host country. Few experts on ethics believe this notion. As, the actual competition lies in delivering superior quality to customers; and not payments, which are questionable.

Corporate social responsibility (CSR) is a word widely ...