Abstract
This paper examines the foreign direct investment decision from an ethical perspective, and considers the moral agency involved in such decisions, with emphasis upon the corporate decision-maker. Historical capital allocation models once regarded as both financially and ethically normative are shown to be deficient in today's environment. Work of modern western philososphical and theological ethicists is included in analyses of the applicability of selected ethical approaches or metaphors to multinational foreign direct investment decisions and the corporate manager's role and responsibility as corporate decision-maker and moral agent. The ethical perspectives reviewed can serve as an aid to the individual manager's determination of what constitutes a responsible exercise of decision-making power.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Apter, D. E. and L. W. Goodman, eds.: 1976, The Multinational Corporation and Social Change (Praeger Publishers, New York).
Booth, L. D.: 1982, ‘Capital Budgeting Frameworks for the Multinational Corporation’, Journal of International Business Studies 13 (Fall), 113–123.
Calvet, A. L.: 1981, ‘A Synthesis of Foreign Direct Investment Theories and Theories of the Multinational Firm’, Journal of International Business Studies 12 (Spring/Summer), 43–59.
Caves, R. E.: 1982, Multinational Enterprise and Economic Analysis (Cambridge University Press, Cambridge).
Dunning, J. H.: 1988, ‘The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions’, Journal of International Business Studies 19 (Spring), 1–31.
Eiteman, D. K. and A. I. Stonehill: 1986, Multinational Business Finance, 4th ed. (Addision-Wesley Publishing Co., Reading, MA and Menlo Park, CA).
Folks, W. R., Jr. and R. Aggarwal: 1988, International Dimensions of Financial Management (PWS-Kent Publishing Company, Boston).
Friedman, M.: 1970, ‘The Social Responsibility of Businesss Is to Increase Its Profits’, The New York Times Magazine, September 13; reprinted in McCoy, C. S.: 1985, Management of Values: The Ethical Difference in Corporate Policy and Performance (Pitman, Boston, London, Melbourne, Toronto), 250–260.
Galbraith, J. K.: 1952, American Capitalism: The Concept of Countervailing Powers (The Riverside Press, Cambridge, MA).
Grosse, R.: 1981, The Theory of Foreign Direct Investment (Center for International Business Studies, The University of South Carolina, Columbia, SC).
Gunnemann, J. P., ed.: 1975, The Nation-state and Transnational Corporations in Conflict (Praeger Publishers, New York).
Gunneman, J. P.: 1986, ‘Capitalism and Commutative Justice’, in A. B. Anderson, ed., The Annual, Society of Christian Ethics, 1985 (Georgetown University Press, Washington, DC).
Hennart, J.-F.: 1982, A Theory of Multinational Enterprise (The University of Michigan Press, Ann Arbor).
LaPalombara, J. and S. Blank: 1979, Multinational Corporations and Developing Countries (The Conference Board, New York).
Lessard, D. R.: 1985, ‘Evaluating International Projects: An Adjusted Present Value Approach’, in D. R. Lessard, ed., International Financial Management, 2nd ed. (John Wiley and Sons, New York).
Litzenberger, R. H. and M. O. Joy: 1975, ‘Decentralized Capital Budgeting Decisions and Shareholder Wealth Maximization’, The Journal of Finance 30 (September), 993–1002.
McKenzie, R. B.: 1987, The Fairness of Markets (Lexington Books of D.C. Heath and Co., Lexington).
Madura, J.: 1986, International Financial Management (West Publishing Co., St. Paul).
McCoy, C. S.: 1985, Management of Values: The Ethical Difference in Corporate Policy and Performance (Pitman, Boston, London, Melbourne, Toronto).
McCoy, C. S.: 1987, ‘Managing Values in Today's World’, in D. A. Krueger, ed., Proceedings of the First National Consultation on Corporate Ethics (The Center for Ethics and Corporate Policy, Chicago).
Miller, E. M.: 1987, ‘The Competitive Market Assumption and Capital Budgeting Criteria’, Financial Management 16 (Winter), 22–28.
Mill, J. S.: 1952, first published, 1863, Utilitarianism, Great Books of the Western World, Vol. 43, 443–476 (Encyclopaedia Britannica, Inc., Chicago).
Murray, J. C., S. J.: 1960, We Hold These Truths: Catholic Reflections on the American Proposition (Sheed and Ward, New York).
National Conference of Catholic Bishops: 1986, Economic Justice for All: Catholic Social Teaching and the U.S. Economy, Third Draft (United States Catholic Conference, Washington, DC).
Niebuhr, R.: 1932, 1953 printing, Moral Man and Immoral Society (Charles Scribner's Sons, New York).
Niebuhr, R.: 1941, The Nature and Destiny of Man, Vol. I, Human Nature, Paperback, 1964 (Charles Scribner's Sons, New York).
Niebuhr, R.: 1943, The Nature and Destiny of Man, Vol. II, Human Destiny (Charles Scribner's Sons, New York).
Norris, W. C.: 1987, ‘Unmet Social Needs as Business Opportunities’, in D. A. Krueger, ed., Proceedings of the First National Consultation on Corporate Ethics (The Center for Ethics and Corporate Policy, Chicago).
Nueno, P., N. Martínez and J. Sarlé: 1981, Las Inversiones Españolas en el Extranjero (Instituto de Estudios Superiores de la Empresa, IESE, Ediciones Universidad de Navarra, S.A., Barcelona).
Phillips, D. L.: 1986, Toward a Just Social Order (Princeton University Press, Princeton).
Rawls, J.: 1971, A Theory of Justice (The Belknap Press of Harvard University Press, Cambridge, MA).
Rodriguez, R. M. and E. E. Carter: 1984, International Financial Management, 3rd ed. (Prentice-Hall, Inc., Englewood Cliffs).
Ryan, J.: 1927, Distributive Justice, new and revised edition (The Macmillan Co., New York).
Shapiro, A. C.: 1986, Multinational Financial Management, 2nd ed. (Allyn and Bacon, Inc., Boston).
Smith, A.: 1952, first published, 1776, An Inquiry into the Nature and Causes of the Wealth of Nations, Great Books of the Western World, Vol. 39 (Encyclopaedia Britannica, Inc., Chicago).
Stanley, M. T.: 1986, ‘The Foreign Direct Investment Decision and Job Export as an Ethical Dilemma for the Multinational Corporation’, in W. M. Hoffman, A. E. Lange, and D. A. Fedo, eds., Ethics and the Multinational Enterprise (University Press of America, Lanham, MD).
Tavis, L. A., ed.: 1982, Multinational Managers and Poverty in the Third World (University of Notre Dame Press, Notre Dame and London).
Tillich, P.: 1954, Galaxy Books edition, 1960. Love, Power, and Justice (Oxford University Press, New York).
Walzer, M.: 1983, Spheres of Justice (Basic Books, New York).
Author information
Authors and Affiliations
Additional information
Marjorie T. Stanley is Professor of Finance, M. J. Neeley School of Business, Texas Christian University. She was visiting Professor of Finance and Scholar in Residence, Institute for Business Ethics, DePaul University, 1986–87. She has related publications in, e.g., Ethics and the Multinational Enterprise (ed., Hoffman, et al), Journal of International Business Studies, California Management Review, The Financial Review, and Management International Review.
Rights and permissions
About this article
Cite this article
Stanley, M.T. Ethical perspectives on the foreign direct investment decision. J Bus Ethics 9, 1–10 (1990). https://doi.org/10.1007/BF00382557
Issue Date:
DOI: https://doi.org/10.1007/BF00382557