International managers-and all people-can no longer afford to ignore the impact of their activities on the environment. As Ward and Dubois put it; Now that mankind is in the process of completing the colonization of the planet, learning to manage it intelligently is an urgent imperative. [People] must accept responsibility for the stewardship of the earth. The word stewardship implies, of course, management for the sake of someone else.As we enter the global phase of human evolution, it becomes obvious that each [person] has two countries, his [or her] own and the planet earth.
Effectively managing environmental interdependence includes considering ecological interdependence as well as the economic and social implications of MNC activities. There is an ever-increasing awareness of, and a mounting concern, worldwide, about the effects of global industrialization on the natural environment. This concern was evidenced by the gathering of world leaders at the Earth Summit in Rio de Janeiro to discuss ecological preservation and decide on action. Government regulations and powerful interest groups are demanding ecological responsibility regarding the use of scarce natural resources and production processes that threaten pennanent damage to the planet. MNCs have to deal with each country's different policies and techniques for environmental and health protection. Such variations in approach reflect different levels of industrialization, living standards, government-business relations, philosophies of collective intervention, patterns of industrial competition, and degrees of sophistication in public policy. For an MNC to take advantage of less stringent regulations (or expectations) is not only irresponsible but also invites disaster, as illustrated by the Union Carbide accident in Bhopal.
In recent years, the export of hazardous wastes from developed countries to less developed ones has increased considerably. One instance was the dumping of over eight thousand drums of waste, including drums filled with polychiorinated biphenyl (PCB), a highly toxic compound, in Koko, Nigeria.70 While not all dumping is illegal, the large international trade in hazardous wastes (as a result of the increasing barriers to domestic disposal) raises disturbing questions regarding social responsibility. Although the importer of waste must take some blame, it is the exporter who shoulders the ultimate responsibility for both generation and disposal. Often, companies choose to dispose of hazardous waste in less developed countries to take advantage of weaker regulations and lower costs. Until we have strict international regulation of trade in hazardous wastes, companies should take it upon themselves to monitor their activities, as Singh and Lakhan demand:
To export these wastes to countries which do not benefit from waste- generating industrial processes or whose citizens do not have lifestyles that generate such wastes is unethical. It is especially unjust to send hazardous wastes to lesser developed countries which lack the technology to minimize the deleterious effects of these substances.
The exporting of pesticides poses a similar problem, with the United States and Germany being the main culprits. The United States exports about 200 million pounds of pesticides each year that are prohibited, restricted, or not registered for use in the United States. One MNC, Monsanto Chemical Corporation, for example, sells DDT to many foreign importers, even though its use in the United States has been essentially banned. Apart from the lack of social responsibffity toward the people and the environment in the countries that impo't DDT, this action is also irresponsible to American citizens because many of their fruits and meat products are imported from those countries.
These are only two of the environmental problems facing countries and large corporations today. According to Graedel and Allenby, the path to truly sustainable development is for corporations to broaden their concept of industrial ecology:
The concept [of industrial ecology] requires that an industrial system be viewed not in isolation from its surrounding systems, but in concert
with them. It is a systems view in which one seeks to optimize the total materials cycle from virgin material, to finished material, to component, to product, to obsolete product, and to ultimate disposal.
Essentially, this perspective supports the idea that environmental citizenship is necessary for a firm's survival as well as responsible social performance.
It is clear then, that MNCs must take the lead in dealing with ecological interdependence by integrating environmental factors into strategic planning. Along with an investment appraisal, a project feasibility study, and operational plans, such planning should include an environmental impact assessment. At the least, MNC managers must deal with the increasing scarcity of natural resources in the next few decades by (1. looking for alternate raw materials, (2. developing new methods of recycling or disposing of used materials, and (3. expanding the use of by-products. Multinatioflal corporations already have had a tremendous impact on foreign countries, and this impact will continue to grow and bring about long-lasting changes. Even now, U.S. multinational corporations alone account for about 10 percent of the world's GNP. Because of interdependence both at the local level and the global level, it is not only moral but also in the best interest of MNCs to establish a single clear posture toward social and ethical responsibilities worldwide and to ensure that it is implemented. In a real sense, foreign firms enter as guests in host countries and must respect the local laws, policies, traditions, and culture as well as those countries' economic and developmental needs.
Managing Environmental Interdependence : Managing Interdependence article from Global Management Catagory Managing Environmental Interdependence
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