Read And Analyze A Multinational Corporation’s List ✓ Solved

Read and analyze a multinational corporation’s (MNC’s) list

Read and analyze a multinational corporation’s (MNC’s) list of values/value statement/or code of ethics. Share one ethical or one legal global situation the company is currently involved in. Explain how corporate culture or values should have influenced its decision making. Submit two recommendations on how this situation could have been avoided.

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Multinational corporations (MNCs) play a vital role in the global economy, influencing consumer behavior and shaping industry standards worldwide. One such MNC is Procter & Gamble (P&G), an American consumer goods company founded in 1837 and headquartered in Cincinnati, Ohio. P&G is recognized not only for its diverse product offerings but also for its pronounced commitment to ethical business practices, evidenced by its values and code of ethics.

P&G’s Purpose, Values, and Principles underscore its corporate ethics. They prioritize integrity, leadership, ownership, passion for winning, and trust. The company emphasizes doing what is right and fostering an environment that upholds honesty and accountability. However, despite this commitment, P&G has recently faced significant scrutiny for its environmental practices, particularly concerning palm oil sourcing, which has raised ethical concerns regarding deforestation and sustainability.

Currently, P&G is involved in a legal situation surrounding allegations of environmental degradation linked to its palm oil supply chain. Investor groups highlight that P&G’s sourcing practices are contributing to the destruction of climate-critical forests, threatening biodiversity and the well-being of local communities (STAND, 2020). The criticisms intensified with the company’s announcement of its climate initiative, “Our Home,” which promises a carbon-neutral approach moving forward. Critics argue, however, that P&G’s actions contradict its commitments, as it has yet to specify a timeline for halting environmentally harmful sourcing methods in regions like Canada (STAND, 2020).

Corporate culture should have played a crucial role in P&G’s decision-making regarding its sourcing practices. The company's stated values emphasize integrity and accountability. If P&G had ensured that its corporate culture genuinely reflected these values, it would have prioritized sustainable sourcing and engaged with stakeholders to address environmental impacts before pursuing its business interests (Procter & Gamble, 2020). Understanding local ecological concerns and regulations should be integral in shaping decision-making processes, especially when operating in environmentally sensitive areas.

To avoid situations like the current one, P&G needs to implement comprehensive sustainable sourcing guidelines. First, the company should conduct thorough environmental impact assessments (EIAs) before entering new markets. These assessments can help identify the ecological significance of sourcing regions and allow for better-informed business practices. This kind of foresight can significantly reduce the risk of legal and reputational repercussions while demonstrating P&G's commitment to environmental responsibility.

Second, P&G should enhance transparency around its supply chain. By publicly reporting on sourcing practices and engaging with stakeholders—including environmental groups and local communities—the company can build trust and accountability. Increased transparency can also mitigate public criticism while fostering a cooperative approach to solving environmental issues (Procter & Gamble, 2021).

Ultimately, P&G's ethical commitments excel when backed by proactive corporate culture and sustainable practices. Addressing the current legal situation regarding its sourcing would not only protect biodiversity but also enhance P&G's reputation as a leader in ethical consumer goods production. Emphasizing corporate values in decision-making processes can steer MNCs like Procter & Gamble toward ethical, sustainable, and responsible practices that resonate well with today's environmentally conscious consumers.

References

  • Procter & Gamble. (2020). P&G Announces Fourth Quarter and Fiscal Year 2020 Results. Retrieved from www.pg.com
  • Procter & Gamble. (2021). Policies and Practices. Retrieved from www.pg.com/purpose-values-and-principles/
  • STAND. (2020). Procter & Gamble faces mounting criticism over its 'Our Home' climate initiative. Retrieved from www.stand.org
  • Snider, M., & Baig, E. (2019). Facebook fined $5 billion by FTC, must update and adopt new privacy, security measures. Retrieved from www.usatoday.com
  • International Institute for Environment and Development. (2018). How to make supply chains sustainable. Retrieved from www.iied.org/resources
  • World Wildlife Fund. (2020). Palm oil: environmental issues. Retrieved from www.worldwildlife.org/pages/palm-oil
  • Environmental Defense Fund. (2018). Sustainable palm oil. Retrieved from www.edf.org/issue/sustainable-palm-oil
  • United Nations Global Compact. (2019). Sustainability and the UN Global Compact: A guide for business. Retrieved from www.unglobalcompact.org
  • Global Reporting Initiative. (2018). Sustainability reporting: What you need to know. Retrieved from www.globalreporting.org
  • Harvard Business Review. (2019). The future of sustainable sourcing. Retrieved from www.hbr.org

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