Abstract:
This paper identifies that not all multinationals are exposed to the same level of ethical risk. It proposes a
framework which will assist business to asses the level of ethical risk to which it is exposed. The framework is
based upon two dimensions: the visibility of the business and the extent of cultural differences between the home
and host country. These two dimensions interact to form a two by two matrix which identifies the conditions which
predicts the level of ethical risk to which a firm is exposed. The paper proposes that those firms exposed to a high
level of ethical risk should actively manage their exposure if they are not to be caught unawares by unanticipated
challenges to their business. The paper suggests appropriate risk management techniques.
