Financial giants and moral pygmies?

Purpose– How should a multinational corporation (MNC) from a mature democracy deal with the human rights issues in a country with a poor human rights standard? The paper aims to discuss these issues.Design/methodology/approach– The authors develop a mathematical model to depict MNC's behavior in response to human rights violations in the host country.Findings– The authors show that, first, in a country with a high level of human rights abuses, a firm will have to lower its human rights standards to survive; but, second, a collective effort by all firms is essential to improve the human rights conditions in the host environment; and third, a firm's human rights practices may have a multiplicative effect that can significantly affect the momentum of human rights development in a host country.Originality/value– This study is one of the first attempts to provide a theoretical framework on the issue of MNCs and human rights in host countries.