W.B. Milestone, Inc., a manufacturer of sophisticated computer parts, recently moved the operations of one of its divisions to Malaysia. The Company has hired several hundred workers at wages considerably below their U.S. counterparts, but well above the prevailing wages in Malaysia. Not only is the Company benefiting from the lower wages, but the increased employment rate and rate of pay for the Malaysian Milestone workers has significantly improved conditions in the local economy.  Milestone is also able to reduce its costs further because of the lesser standard in Malaysia for factories used for its operations there (no air conditioning and poor ventilation), it can dispose of waste without the burdensome oversight of U.S. environmental agencies, and Malaysian government inspectors are routinely given gratuities to facilitate inspection reports or to otherwise to ease bureaucratic burdens on the Company. No laws are being broken.  The Company’s operations are in all key respects in accordance with the laws of Malaysia. The Company’s foreign operations are also in compliance with all relevant U.S. regulations, noting that the U.S. does not require that foreign operations comply with the laws applicable to domestic operations.

You were recently hired as a senior vice-president in charge of the Malaysian operations and you are concerned about what you have seen and heard about how the plants are being operated. When you called a colleague in the states, he said to you “keep your mouth shut and when in Rome do as the Romans do”. He also points out that none of the Malaysians are complaining, and that the Milestone operations have been an economic boon for the local economy.

What are some of the ethical issues you should consider in charting your course of action and how would you resolve these issues?  Based on this weeks readings, you might also revisit the question of whether or not a corporation can be a moral agent in its own right, which we first looked at in connection with the Manville case.

References:

Ethics Without Regulation Won’t Cut It

Role of government in Regulating Business Ethics

Compliance and Regulation (A review of regulatory areas with respect to ethics)

Business Ethics: The Law of Rules

Corporate Moral Agency (French on Gulf oil and moral responsibility)

Business Ethics

The Corporation as a Moral Person Author(s): Peter A. French