Final answer:
To avoid unethical practices by a foreign supplier, an effective business practice is to implement a code of conduct that stipulates ethical standards. Ignoring unethical behavior, increasing orders, or immediate contract termination are not the advised initial steps. Codes of conduct and supply chain oversight exemplify a company's dedication to ethical practices and corporate responsibility.
Step-by-step explanation:
To avoid unethical practices by a foreign supplier, an effective business practice is to implement a code of conduct for suppliers. This code would serve as a set of guidelines that stipulates the ethical standards and practices that the supplier must follow, including the prohibitions against child labor and forced labor, which are morally objectionable. Implementing such a code of conduct is crucial as it reflects the commitment of the company to corporate responsibility and ethical practices. Moreover, multinational corporations (MNCs) need to monitor their supply chains closely to ensure compliance, which can be challenging due to subcontracting practices where control becomes diluted.
Ignoring unethical practices or increasing order quantities from an unethical supplier would inherently compromise the company's corporate responsibility. On the other hand, terminating the contract with a supplier could be an appropriate reaction if the supplier consistently fails to meet ethical standards and disregards the code of conduct. However, this should be a last resort after efforts to align the supplier with ethical standards through engagement and improvement plans have been exhausted.