Question 1 : Describe the ethical challenges faced by organizations operating globally

Ethical challenges

One of the ethical challenges that global organizations face is corruption. Corrupt government officials demand global companies to secure their licenses and government approvals. This forces the company's corporate executives to set aside some resources for bribing the local politicians and government officials to invest. The global companies are also forced to bribe the government officials for their products not to be termed as counterfeit or illegal. There has been discrimination in taxation where the global companies are supposed to pay high taxes as compared to local companies making the market less competitive (Jobin et al., 2019). There have also been illegal policies developed by the foreign country limiting the prices of the products leading to losses. The management of the global company is forced to sell some of its shares to government officials to have control of the company.

The foreign country restricts the global countries from importing the raw materials but purchasing locally available materials. The prices of the raw materials are then increased, leading to unexpected expenses. In some foreign countries, the government restricts the outsourcing of labor. The restriction leads to the use of locally available labor that is unskillful and incompetent (Vallaster et al., 2019). Global companies have also been facing the loss of assets through theft from employees. Terrorism has also been used to destroy the structures of the global companies to avoid competition with the local companies. This aims at creating a monopoly of a local company in order to maximize its profits. In some countries, the directors and top management of foreign companies have been assassinated by local businessmen for failing to pull out their competition.

Scenario

A company X was involved in corruption scandals where it bribes the government officials to be allowed to operate in a certain country. It received forged documents and licenses, which were processed in hours. The management was also asked to bribe the government officials to escape the taxation process (Krishnamurti et al., 2018). They were supposed to pay a higher tax, but after bribing, they could pay less tax. The company also employed children to do some cleaning, which was a violation of the Children Act. There was unfair compensation in paying the employees. Due to protection by government officials, the company produced low-quality products that were not safe for consumption. After two years, a new government was put in place. The president was determined to eradicate corruption in the private and public sectors. All the government officials that assisted the company in carrying out the dealings were sacked and prosecuted for corruption and abuse of office. The tax regulatory authority found that the company had never paid any tax, and it was fined for all the years that it declined to pay. The company started experiencing financial challenges because of many fines for illegal activities. There was a high turnover of employees for failure of being paid. The company also experienced a bad reputation leading to low sales, and finally, the company was shut down.