Wage Ethics

• Few consumers would profess that 8-year-olds working 16-hour days in a dimly lit factory is ethical. And yet several large multinational corporations disregard these issues in favor of producing a product at a significantly lower cost. John M. Wage, author of the book, "Ethics for International Business," explains the quandary arises when foreign governments have no set minimum wage. In these situations, companies can contract foreign workers and have them work for less than a livable wage.
  
  Corporations that wish to maintain strong business ethics by paying local, American workers a higher wage for the same job that an overseas worker could do for less face a significant disadvantage. Because consumers typically value less expensive products over ones that are not made in sweatshops, companies that adopt fair wage practices lose over ones that do not.
  
  

Bribery and Grease Payments

• Some countries, particularly African nations, are accustomed to receiving "grease payments" as a means of getting bureaucratic tasks achieved in less time or currying favor with local authorities. For instance, a 2009 "Harper's Magazine" article explains that Halliburton paid Nigerian officials $180 million to secure contracts worth $6 billion. Though American companies are not allowed to offer grease payments, in situations such as Halliburton's, the company benefited from its exchange even after settling the matter in court. Thus, other companies that abide by the ethical rules are at a disadvantage to companies that do not.
  
  

Lack of Enforceability

• Another disadvantage of maintaining ethics in international business is the lack of enforcement for the other companies who break the rules. Chad Philips Brown states in his book, "Self-Enforcing Trade: Developing Countries and WTO Dispute Settlement," that low preferential tariffs are nearly impossible to enforce. Therefore, countries that charge a high amount for certain imports to protect their local economy face few consequences despite the illegality of the act as outlined by the World Trade Organization.
  
  

Potential and Consideration

• Consumers exert considerable influence over the ethical behavior of corporations, particularly in international affairs. For instance, the high demand for fair trade coffee compelled many large companies such as Starbucks and Pete's Coffee to offer it as part of their menus. Similarly, consumer demand for wooden products not originating from rainforests is also increasing, which in turn inspires companies to use renewable, sustainable materials such as bamboo. Therefore, one of the strongest drivers of international business ethics is the consumer and his spending habits.