Reference no: EM13881120

As companies increasingly do business around the world, they often must decide how to behave in developing countries where the legal system may be more lax than that of their home base. Some believe in the principle, "When in Rome, do as the Romans do," justify- ing activities abroad that are illegal and unacceptable at home. Others argue that transna- tional companies must use their in?uence to nudge other businesses and nations towards higher standards, even attempting to make a di?erence in the way foreign governments handle human rights. In the 1980s many companies stopped doing business in South Africa, in an e?ort to pressure that government to end apartheid. In 1992 Levi Strauss withdrew operations from Burma, claiming, "It is not possible to do business [there] with- out directly supporting the military government and its pervasive violations of human rights.

" In 1994 Reebok and Liz Claiborne pulled out of Burma; in 1995 Eddie Bauer and Amoco also withdrew, citing growing opposition in the United States to company involve- ment there. Wal-Mart, IKEA, Crate and Barrel, Jones New York, and (under pressure from activists) Ames Department Stores have promised to stop sourcing products from Myanmar (formerly Burma). In 1998, after many strikes and negative press reports, Nike announced plans to improve conditions in Indonesia. It o?ered education and business loans to workers' families, promised to improve air quality in its plants, bringing them in line with U.S. OSHA standards, agreed to open its plants to inspections, and raised wages by 40 percent. Rejected at a 1998 shareholders' meeting was a proposal that Nike spend about 2 percent of its yearly advertising budget to double the wages of its workers in Indonesia, which would have provided them with what critics claim is a living wage.

Where should companies draw the line in their activities abroad?

If they decide to go in the direction of challenging the moral climate, is that a form of "cultural imperialism"?

How wide should they spread their net of rescue in these settings?

Is it enough to raise their own employees' wages, or should they also be concerned with the behavior of their sup- pliers?

Should they try to improve infrastructure (education, environment)?

Should they try to in?uence government policies? What about boycotting products from an "outlaw" state?