Choosing to operate in different countries can be good for business, as you are exposed to expanded markets. However, ethical matters are bound to surface when you engage in a multinational business environment. Human resource managers will typically look for manpower in the host country, and the resulting challenges include language and cultural differences, local employment laws and differences in business etiquette. Bridging these gaps requires skill to ensure the organization operates within acceptable practices.

Cultural Divide

Culture plays an important role when considering the ethics of leadership in multinational business. A uniform code of ethics might not work for the corporation's parent country and the foreign country where it does business. HR should have strong cross-cultural training and strive to make operations abroad align with the parent company's values, policies and identity. Depending on the country where global business is being conducted, conservatism or liberalism should be embraced by HR as new hires come aboard. Overseas employees should be developed so they are eligible for promotions.

Compensation Differentials

Different countries have different compensation levels even when the job specification and duties are similar; these are based on the foreign country's cost of living and other economic factors. It is likely that multinationals headquartered in the U.S. with branches or franchises in developing countries will have significant salary differences. An individual transferred from the American office to an overseas branch will make several times the pay of the local counterpart doing the same job. This can undermine the motivation of local employees who are doing a job that requires the same skill set. Narrowing the gap in compensation is an ethical challenge for HR.

Cronyism, Bribery and Unfair Competition

Operating your multinational corporation abroad subjects you to complex legal and ethical issues in your business dealings. HR will confront social equity, human rights and environmental problems that can affect your productivity and marketing goals. Some tax and employment-related laws can be complicated, giving advantage to your competitors. You may encounter officials asking for a range of payments -- bribes, in effect -- to facilitate business deals. HR may also get requests for employment of unqualified personnel or preferential promotion of employees with relatives in government. Preparing how to properly interact with the authorities is key when operating outside the U.S.

Safety and Security Threats

As multinationals globalize their enterprises, they face a world that's fragmented along cultural and political lines, and they also encounter regulations and standards that aren't found in the U.S. Safety and security are the most difficult challenges for HR in multinational companies. Companies have to prepare for epidemics, natural disasters and acts of terrorism to protect employees and the workplace from harm. Other than natural disasters, the biggest threat comes from employees who have ulterior motives, and HR has to effect stringent hiring procedures to mitigate this risk -- especially for multinational companies with subsidiaries in politically volatile countries or countries where natural disasters are common.