MULTINATIONAL CORPORATIONS ORGANISATIONS

multinational corporations Organizations who have established business in more

than one country, are called multinational corporation. The headquarters are in the
home country and the business is extended in many host countries. The Western
organizations doing business in the less-economically developed (developing, and
overpopulated) countries gain the advantage of inexpensive labor, availability of
natural resources, conducive-tax atmosphere, and virgin market for the products.
ADVANTAGES OF MNCs IN HOST COUNTRY
• Employment generation
• Automatic inflow of Foreign capital
• Proper use of idle resources
• Technical Development
• Managerial Development
• End of local monopolies
• Improvement in Standard of Living
• Promotion of international brotherhood and culture
DISADVANTAGES OF MNCs IN HOST
COUNTRY
• Danger for domestic industries
• Repatriation of profits
• No benefit to poor people
• Danger to independence
• Disregard of the national interest of the host country
• Careless exploitation of natural resources
• Selfish promotion
ENVIRONMENTAL ETHICS
• Engineers in the past are known for their negligence of environment, in
their activities. It has become important now that engineers design eco-
friendly tools, machines, sustainable products, processes, and projects.
These are essential now to (a) ensure protection (safety) of environment
(b) prevent the degradation of environment, and (c) slow down the
exploitation of the natural resources, so that the future generation can
survive.
• Environmental ethics deal with issues related to the rights of individuals.
• The environment ethics include-
1. The study of moral issues concerning the environment.
2. Moral perspectives, beliefs and attitudes concerning those issues.
• Engineers as experimenters have certain duties towards environmental
ethics, namely:
1. Environmental impact assessment: One major but sure and
unintended effect of technology is wastage and the resulting pollution of
land, water, air and even space. Study how the industry and technology
affects the environment.
2. Establish standards: Study and to fix the tolerable and actual
pollution levels.
3. Counter measures: Study what the protective or eliminating
measures are available for immediate implementation
4. Environmental awareness: Study on how to educate the people on
environmental practices, issues, and possible remedies.
BUSINESS ETHICS
• The term business ethics refers to the system of moral principles and
rules of the conduct applied to business.
• A business should aim to have fair dealing with everyone dealing with
it.
• Three sources of business ethics
1. religion
2. Culture
3. Law
 COMPUTER ETHICS

• Computer ethics are related to all the computer professionals such as

programs, analysis, operators designers, etc., along with the users.

• Computer ethics is defined as (a) study and analysis of nature and social
impact of computer technology, (b) formulation and justification of
policies, for ethical use of computers. This subject has become relevant
to the professionals such as designers of computers, programmers,
system analysts, system managers, and operators. The use of computers
have raised a host of moral concerns such as free speech, privacy,
intellectual property right, and physical as well as mental harm. There
appears to be no conceptual framework available on ethics, to study and
understand and resolve the problems in computer technology.
Types of Issues
• Different types of problems are found in computer ethics.
• 1. Computer as the Instrument of Unethical Acts
• (a) The usage of computer replaces the job positions. This has been
overcome to a large extent by readjusting work assignments, and
training everyone on computer applications such as word processing,
editing, and graphics
• b) Breaking privacy. Information or data of the individuals accessed or
erased or the ownership changed.
• (c) Defraud a bank or a client, by accessing and withdrawing money
from other’s bank account.
• 2. Computer as the Object of Unethical Act The data are accessed and
deleted or changed.
• (a) Hacking: The software is stolen or information is accessed from other
computers. This may cause financial loss to the business or violation of
privacy rights of the individuals or business. In case of defense information
being hacked, this may endanger the security of the nation.
• (b) Spreading virus: Through mail or otherwise, other computers are
accessed and the files are erased or contents changed altogether. ‘Trojan
horses’ are implanted to distort the messages and files beyond recovery.
This again causes financial loss or mental torture to the individuals. Some
hackers feel that they have justified their right of free information or they do
it for fun. However, these acts are certainly unethical.
• (c) Health hazard: The computers pose threat during their use as well as
during disposal.
3. Problems Related to the Autonomous Nature of Computer
• (a) Security risk: Recently the Tokyo Stock Exchange faced a major embarrassment. A
seemingly casual mistake by a junior trader of a large security house led to huge losses
including that of reputation. The order through the exchange’s trading system was to sell
one share for 600,000 Yen. Instead the trader keyed in a sale order for 600,000 shares at
the rate of one Yen each. Naturally the shares on offer at the ridiculously low price were
lapped up. And only a few buyers agreed to reverse the deal! The loss to the securities
firm was said to be huge, running into several hundred thousands. More important to
note, such an obvious mistake could not be corrected by some of the advanced
technology available. For advanced countries like Japan who have imbibed the latest
technology, this would be a new kind of learning experience.
• (b) Loss of human lives: Risk and loss of human lives lost by computer, in the operational
control of military weapons. There is a dangerous instability in automated defense
system. An unexpected error in the software or hardware or a conflict during interfacing
between the two, may trigger a serious attack and cause irreparable human loss before
the error is traced. The Chinese embassy was bombed by U.S. military in Iraq a few years
back, but enquiries revealed that the building was shown in a previous map as the
building where insurgents stayed.
Computers In Workplace The ethical problems initiated by computers in the
workplace are:
• 1. Elimination of routine and manual jobs. This leads to unemployment, but the creation of skilled
and IT-enabled service jobs are more advantageous for the people. Initially this may require some
upgradation of their skills and knowledge, but a formal training will set this problem right. For
example, in place of a typist, we have a programmer or an accountant.

• 2. Health and safety: The ill-effects due to electromagnetic radiation, especially on women
pregnant and employees, mental stress, wrist problem known as Carpel Tunnel Syndrome, and
backpain due to poor ergonomic seating designs, and eye strain due to poor lighting and flickers in
the display and long exposure, have been reported worldwide. Over a period of long exposure,
these are expected to affect the health and safety of the people. The computer designers should
take care of these aspects and management should monitor the health and safety of the
computer personnel.

• 3. Computer failure: Failure in computers may be due to errors in the hardware or software.
Hardware errors are rare and they can be solved easily and quickly. But software errors are very
serious as they can stop the entire network. Testing and quality systems for software have gained
relevance and importance in the recent past, to avoid or minimize these errors.
Computer Crime The ethical features involved in computer crime are:
• 1. Physical Security The computers are to be protected against theft, fire, and
physical damage. This can be achieved by proper insurance on the assets.
• 2. Logical security The aspects related are (a) the privacy of the individuals or
organizations, (b) confidentiality, (c) integrity, to ensure that the modification of
data or program are done only by the authorized persons, (d) uninterrupted service.
This is achieved by installing appropriate uninterrupted power supply or back-up
provisions, and (e) protection against hacking that causes dislocation or distortion.
Licensed anti-virus packages and firewalls are used by all computer users to ensure
this protection. Passwords and data encryption have been incorporated in the
computer software as security measures. But these have also been attacked and
bye-passed. But this problem is not been solved completely. Major weaknesses in
this direction are: (a) the difficulty in tracing the evidence involved and (b) absence
of stringent punishment against the crime. The origin of a threat to the Central
Government posted from an obscure browsing center, remained unsolved for quite
a long time. Many times, such crimes have been traced, but there are no clear cyber
laws to punish and deter the criminals.
WEAPONS DEVELOPMENT

• Military activities including the world wars have stimulated the growth of technology. The
growth of Internet amply illustrates this fact. The development of warfare and the
involvement of engineers bring out many ethical issues concerned with engineers, such as
the issue of integrity in experiments as well as expenditure in defense research and
development, issue of personal commitment and conscience, and the issues of social justice
and social health.
• Engineers involve in weapons development because of the following reasons: 1. It gives one
job with high salary. 2. One takes pride and honor in participating in the activities towards
the defense of the nation (patriotic fervor). 3. One believes the he fights a war on terrorism
and thereby contribute to peace and stability of the country. Ironically, the wars have never
won peace, only peace can win peace! 4. By research and development, the engineer is
reducing or eliminating the risk from enemy weapons, and saving one’s country from
disaster. 5. By building-up arsenals and show of force, a country can force the rogue
country, towards regulation. Engineers can participate effectively in arms control
negotiations for surrender or peace, e.g., bombing of Nagasaki and Hiroshima led to
surrender by the Japanese in 1945. Many engineers had to fight and convince their
personal conscience. The scene such as that of a Vietnamese village girl running wild with
burns on the body and horror in the face and curse in her mind has moved some engineers
away from their jobs.
ENGINEERS AS MANAGERS

• The characteristics of engineers as managers are:

1. Promote an ethical climate, through framing organization policies, responsibilities
and by personal attitudes and obligations.
2. Resolving conflicts, by evolving priority, developing mutual understanding,
generating various alternative solutions to problems.
3. Social responsibility to stakeholders, customers and employers.
4. They act to develop wealth as well as the welfare of the society.
5. Ethicists project the view that the manager’s responsibility is only to increase the
profit of the organization, and only the engineers have the responsibility to protect
the safety, health, and welfare of the public.
6. But managers have the ethical responsibility to produce safe and good products
(or useful service), while showing respect for the human beings who include the
employees, customers and the public. Hence, the objective for the managers and
engineers is to produce valuable products that are also profitable.
• CONSULTING ENGINEERS

• The consulting engineers work in private. There is no salary from the

employers. But they charge fees from the sponsor and they have
more freedom to decide on their projects. Still they have no absolute
freedom, because they need to earn for their living.
• The consulting engineers have ethical responsibilities different from
the salaried engineers, as follows:
• 1. Advertising The consulting engineers are directly responsible for
advertising their services, even if they employ other consultants to
assist them..
• But in many organizations, this responsibility is with the advertising executives
and the personnel department. They are allowed to advertise but to avoid
deceptive ones.
• Deceptive advertising such as the following are prohibited:
• (a) By white lies.
• (b) Half-truth, e.g., a product has actually been tested as prototype, but it was
claimed to have been already introduced in the market. An architect shows the
photograph of the completed building with flowering trees around but actually the
foundation of the building has been completed and there is no real garden.
• (c) Exaggerated claims. The consultant might have played a small role in a well-
known project. But they could claim to have played a major role.
• (d) Making false suggestions. The reduction in cost might have been achieved
along with the reduction in strength, but the strength details are hidden.
• (e) Through vague wordings or slogans
2. Competitive Bidding It means offering a price, and get something in return for the
service offered. The organizations have a pool of engineers. The expertise can be
shared and the bidding is made more realistic. But the individual consultants have to
develop creative designs and build their reputation steadily and carefully, over a
period of time. The clients will have to choose between the reputed organizations
and proven qualifications of the company and the expertise of the consultants.
Although competent, the younger consultants are thus slightly at a disadvantage.
3. Contingency Fee This is the fee or commission paid to the consultant, when one is
successful in saving the expenses for the client. A sense of honesty and fairness is
required in fixing this fee. The NSPE Code III 6 (a) says that the engineers shall not
propose or accept a commission on a contingent basis where their judgment may be
compromised. The fee may be either as an agreed amount or a fixed percentage of
the savings realized. But in the contingency fee-agreements, the judgment of the
consultant may be biased. The consultant may be tempted to specify inferior
materials or design methods to cut the construction cost. This fee may motivate the
consultants to effect saving in the costs to the clients, through reasonably moral and
technological means.
4. Safety and Client’s Needs The greater freedom for the consulting engineers in
decision making on safety aspects, and difficulties concerning truthfulness are the
matters to be given attention. For example, in design-only projects, the consulting
engineers may design something and have no role in the construction. Sometimes,
difficulties may crop-up during construction due to non-availability of suitable
materials, some shortcuts in construction, and lack of necessary and adequate
supervision and inspection. Properly-trained supervision is needed, but may not
happen, unless it is provided. Further, the contractor may not understand and/or be
willing to modify the original design to serve the clients best. A few on-site inspections
by the consulting engineers will expose the deficiency in execution and save the
workers, the public, and the environment that may be exposed to risk upon
completion of the project. The NSPE codes on the advertisement by consultants
provide some specific regulations. The following are the activities prohibited in
advertisement by consultant: 1. The use of statement containing misrepresentation or
omission of a necessary fact. 2. Statement intended or likely to create an unjustified
expectation. 3. Statement containing prediction of future (probable) success. 4.
Statement intended or likely to attract clients, by the use of slogans or sensational
language format.
• ENGINEERS AS EXPERT WITNESS

Frequently engineers are required to act as consultants and provide

expert opinion and views in many legal cases of the past events. They
are required to explain the causes of accidents, malfunctions and other
technological behavior of structures, machines, and instruments, e.g.,
personal injury while using an instrument, defective product, traffic
accident, structure or building collapse, and damage to the property,
are some of the cases where testimonies are needed. The focus is on
the past.
• The engineers, who act as expert-witnesses, are likely to abuse their positions in the
following manners:
1. Hired Guns Mostly lawyers hire engineers to serve the interest of their clients.
Lawyers are permitted and required to project the case in a way favorable to their
clients. But the engineers have obligations to thoroughly examine the events and
demonstrate their professional integrity to testify only the truth in the court. They do
not serve the clients of the lawyers directly. The hired guns forward white lies and
distortions, as demanded by the lawyers. They even withhold the information or shade
the fact, to favor their clients.
2. Money Bias Consultants may be influenced or prejudiced for monitory
considerations, gain reputation and make a fortune.
3. Ego Bias The assumption that the own side is innocent and the other side is guilty, is
responsible for this behavior. An inordinate desire to serve one’s client and get name
and fame is another reason for this bias.
4. Sympathy Bias Sympathy for the victim on the opposite side may upset the
testimony. The integrity of the consultants will keep these biases away from the justice.
The court also must obtain the balanced view of both sides, by examining the expert
witnesses of lawyers on both sides, to remove a probable bias.
Duties
1. The expert-witness is required to exhibit the responsibility of confidentiality just
as they do in the consulting roles. They can not divulge the findings of the
investigation to the opposite side, unless it is required by the court of law.
2. More important is that as witness they are not required to volunteer evidence
favorable to the opponent. They must answer questions truthfully, need not
elaborate, and remain neutral until the details are asked for further.
3. They should be objective to discover the truth and communicate them honestly.
4. The stand of the experts depends on the shared understanding created within the
society. The legal system should be respected and at the same time, they should act
in conformance with the professional standards as obtained from the code of ethics.
5. The experts should earnestly be impartial in identifying and interpreting the
observed data, recorded data, and the industrial standards. They should not distort
the truth, even under pressure. Although they are hired by the lawyers, they do not
serve the lawyers or their clients. They serve the justice. Many a time, their
objective judgments will help the lawyer to put up the best defense for their clients.
• ENGINEERS AS ADVISORS IN PLANNING AND POLICY MAKING
ADVISORS:
The engineers are required to give their view on the future such as in planning,
policy-making, which involves the technology.
For example, should India expand nuclear power options or support traditional
energy sources such as fossil fuels or alternative forms like solar and wind energy?
In the recent past, this topic has created lot of fireworks, in the national media.
Various issues and requirements for engineers who act as advisors are:
1. Objectivity The engineers should study the cost and benefits of all possible
alternative means in objective manner, within the specified conditions and
assumptions.
2. Study All Aspects They have to study the economic viability (effectiveness),
technical feasibility (efficiency), operational feasibility (skills) and social
acceptability, which include environmental and ethical aspects, before formulating
the policy.
3. Values Engineers have to posses the qualities, such as (a) honesty, (b)
competence (skills and expertise), (c) diligence (careful and alert) (d) loyalty in
serving the interests of the clients and maintaining confidentiality, and (e) public
trust, and respect for the common good, rather than serving only the interests of
the clients or the political interests.
4. Technical Complexity The arbitrary, unrealistic, and controversial assumptions
made during the future planning that are overlooked or not verified, will lead to
moral complexity. The study on future is full of uncertainties than the investigations
on the past events. On the study of energy options, for example, assumptions on
population increase, life style, urbanization, availability of local fossil resources,
projected costs of generating alternative forms of energy, world political scenario,
world military tensions and pressures from world organizations such as World Trade
Organisation (W.T.O.) and European Union (EU) may increase the complexity in
judgment on future.
5. National Security The proposed options should be aimed to strengthen the
economy and security of the nation, besides safeguarding the natural resources and
the environment from exploitation and degradation.
• MORAL LEADERSHIP Engineers provide many types of leadership in the
development and implementation of technology, as managers, entrepreneurs,
consultants, academics and officials of the government. Moral leadership is not merely
the dominance by a group. It means adopting reasonable means to motivate the groups
to achieve morally desirable goals. This leadership presents the engineers with many
challenges to their moral principles. Moral leadership is essentially required for the
engineers, for the reasons listed as follows:
1. It is leading a group of people towards the achievement of global and objectives. The
goals as well as the means are to be moral. For example, Hitler and Stalin were
leaders, but only in an instrumental sense and certainly not on moral sense.
2. The leadership shall direct and motivate the group to move through morally desirable
ways.
3. They lead by thinking ahead in time, and morally creative towards new applications,
extension and putting values into practice. ‘Morally creative’ means the identification
of the most important values as applicable to the situation, bringing clarity within the
groups through proper communication, and putting those values into practice.
• The Institute of Electrical & Electronics Engineers Code of Ethics We the members
of the IEEE, in recognition of the importance of our technologies in affecting the
quality of life throughout the world, and in accepting a personal obligation to our
profession, its members and the communities we serve, do hereby commit
ourselves to the highest ethical and professional conduct and agree:
1. to accept responsibility in making engineering decisions consistent with the
safety, health and welfare of the public, and to disclose prompt factors that
might endanger the public or the environment.
2. to avoid real or perceived conflicts of interest whenever possible, and to
disclose them to affected parties when they do exist.
3. to be honest and realistic in stating claims or estimates based on available data.
4. to reject bribery in all its forms.
5. to improve the understanding of technology, its appropriate application, and
potential consequences. 6. to maintain and improve our technical competence
and to undertake technological tasks for others only if qualified by training or
experience, or after full disclosure of pertinent limitations.
• Institution of Engineers (India) Code of Ethics (Effective from March
2004) Introduction Engineers serve all members of the community in
enhancing their welfare, health, and safety by a creative process
utilizing the engineers’ knowledge, expertise and experience.
• The code of ethics is based on broad principles of truth, honesty,
justice, trustworthiness, respect and safeguard of human life and
welfare, competence and accountability, which constitutes the moral
values every corporate member of the institution must recognize,
uphold and abide by. 1.0 Preamble The corporate members if the IEI
are committed to promote and practice the profession of engineering
for the common good of the community bearing in mind the following
concerns:
• 1. The ethical standard 2. Social justice, social order, and human rights
3. Protection of the environment 4. Sustainable development 5. Public
safety and tranquility
• Indian Institute of Material Management Code of Ethics
• 1. To consider first the total interest of one’s organization in all
transactions without impairing the dignity and responsibility to one’s
office.
• 2. To buy without prejudice seeking to obtain the maximum ultimate
value for each rupee of expenditure.
• 3. To subscribe and work for honesty and truth in buying and selling.
4. To denounce all forms and manifestations of commercial bribery
and to eschew anti-social practices.
• 5. To respect one’s obligations and those of one’s organization
consistent with good business practice.