StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Do the Multinational Corporations Harm the Developing Countries - Essay Example

Cite this document
Summary
The author of this essay "Do the Multinational Corporations Harm the Developing Countries?" describes the effects of corporate practices in the developing nations. This paper outlines the role of Multinational corporations in the abuse of human rights and damage to the environment…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.9% of users find it useful
Do the Multinational Corporations Harm the Developing Countries
Read Text Preview

Extract of sample "Do the Multinational Corporations Harm the Developing Countries"

Do The Multinational Corporations Harm The Developing Countries? Multinational corporations (MNCs) are business entities organized with a given country while creating various affiliate firms in other countries worldwide. Globalization and industrialization have revolutionized the entire world and today, multinational corporations operate even in poorer countries. MNCs are located in developed countries and they seek to expand their activities in developing countries because of the advantages they are entitled to when they operate in poor countries such as cheaper labor and resources among others. These corporations lower the costs by taking advantage of relatively cheap and skilled labor forces in developing countries. In the operations of MNCs, developing countries are the host countries and so many people have questioned the benefits of hosting these companies. Those supporting and opposing the operations of multinational cooperation in developing countries argue based on the employment and the working conditions of the locals; foreign direct investment; introduction of sophisticated managing strategies; and transfer of new sophisticated technologies among others. MNCs either introduce valuable and productive tools to developing nations which benefits the poor countries’ economies, creates employment opportunities and creates a skillful workforce, or MNCs exploits the developing countries because they mainly focus on how to maximize their profits. Multinationals can cause more negative consequences as compared to the positive impacts on developing countries. Many individuals from these poor countries have accused multinationals of pretending to contribute to the development of the country while in the real sense they are only interest in cheap labor (Muller 163). The production process is disintegrated and takes place in various nations globally but the management of the production process remains in the corporation’s headquarters situated in the developed nations (Muller 160). Firstly, the governments in most developing countries are very weak and by this, they create room for these corporations to completely exploit the standards of domestic labor. In most cases, these multinationals undermine governmental regulations through attempts to reduce national investment restrictions, lower consumer standards, and the elimination of unitary tax policies. Many developing countries are forced to change their foreign investment code so as to attract more multinational corporate involvement in their economies. However, the multinational investment can prevent economic development in developing nations based on the kind of infrastructure required by these corporations. Moreover, multinational corporations also interfere with the political policies of the host country and this includes creating political uncertainty and military coup that may negatively affect the country for decades. Scholars suggest that the level of economic development in developing countries affects the impact of multinationals on polity. More so, they penetrate areas with adequate natural resources and fully exploit these resources because most developing countries do not have the necessary finance to carry out highly expensive resource exploration. Secondly, many popular multinational corporations have been accused of abusing human rights in poor counties where they have set up firms. In addition, these corporations have forced the local communities and indigenous populations out of their land so as to utilize the land for their profit maximizing purposes. Further, MNCs have used the militia to suppress those who are demonstrating against their commercial activities in the country. As a result, these countries experience violence and increased panic and instability. Cases of underpayment or virtual slave labor are common in developing nations where MNCs operates. These companies expect the indigenous population to worker for them and help them maximize their profits but they reward them low wages that cannot even help them escape poverty cycle. More so, there are many cases of unsafe working conditions in which the locals are at risk of developing serious health conditions in the process. It is true that these corporations help in creating job opportunities for many locals but again, these people work in terrible conditions and receive low wages for their labor. This way, they are exploited by these multinationals who are only interested in maximizing their profits and not the well-being of their workers. They focus on how to make abnormal profits and so they see exploitation and oppression as the best way to help them achieve this. In the end, these individuals remain trapped in the vicious cycle of poverty because there is limited scope to escape from it and improve their social and economic conditions. Actually, international protest against multinationals has been experienced as these companies have been accused of exploiting women from the developing countries (Muller 163). Additionally, the indigenous population lives in a persistent fear of being displaced from their land by multinationals and so they are stressed as these corporations continue to emerge in their countries. Lastly, the industrial practices of multinational corporations cause serious environmental implications for these developing nations. The operations of these firms affect the environment negatively, for instance, these companies create great externalities via land erosion, air and water pollution, deforestation as well as exploitation of the available natural resources among others. The anti-MNCs individuals accuse MNCs of exploiting both the indigenous population and the natural resources in The Third World countries. Agreeably, the extraction of the natural resources leads to great economic losses though environmental degradation including soil erosion, pollution of water supplies, and desertification among others. As a result, there will be infertile soil left and this will affect food production and many locals will lose their homes, forests flooded, and water sources polluted with toxic wastes among others. In the developing nations, water sources are in most cases polluted because of dumping industrial waste and this has adverse effects on individuals’ health and that of other organisms. The Shell Oil in Nigeria has been cited as an example of environmental degradation caused by the practices of multinationals. The Nigeria Niger Delta is a place characterized by conflicts between the host communities and the multinational oil companies invading the region. Nowadays, a mechanism called Corporate Social Responsibility (CSR) has been developed to enable multinationals have a positive impact on the developing countries where they operate. In addition, multinational operations do not help developing countries because their activities reduce the autonomy of the country and the local and increases dependency. The emergence of multinational companies in developing countries has led to high dependency rate in these countries and this has negatively affected the economy of these poor countries. Nevertheless, multinationals corporations may introduce high technologies that cannot be used appropriately and may as well increases cases of unemployment as many works will be done technologically and no labor will be required. So Third World countries are also concerned with the appropriateness of the technology being transferred to them as a foreign investment. On the contrary, many governments in the Third World countries have decided to work with multinational corporations and have accepted multinational investment because it results to many economic benefits. For instance, the corporate taxes that these corporations pay greatly contribute to increased government revenue. More so, MNCs play a leading role in developing countries by providing better public goods and improved infrastructure in these countries. Furthermore, these corporations provide employment opportunities for the local individuals. Advocates of multinationals argue that these companies have generated many employment opportunities worldwide. More so, these firms create many job opportunities in the manufacturing industries particularly those dealing with technologies. Those supporting the practices of multinational companies claim that these corporations provide good jobs with higher wages, safer working conditions and better benefits packers as compared to local firms. However, these companies may sometimes provide lower wages relative to the productivity of workers. Advocates for MNCs practices in developing nations claim that these corporations have enabled these countries to achieve sustainable development. Corporate accountability requires multinationals to be accountable to the society that they are serving and operating in. Those backing the MNCs argue that these companies operate in a socially responsible way by providing required capital in poor countries and job opportunities among other benefits. These multinationals have to respect the need to improve governmental and individuals’ mechanisms to enhance the accountability of businesses and industries. In conclusion, the role played by multinationals is underappreciated because they have given developing countries necessary capital, created job opportunities, and introduced sophisticated technologies and skills required in improving economy. On one hand, MNCs are very beneficial to developing countries as they improve the economy of these countries though provision of capital, technology, skills as well as exports. On the other hand, MNCs have been accused of exploiting the locals and the developing countries since their practices are driven by the aim of maximizing gains. They exploit natural resources and degrade the environment and even though these multinationals create job opportunities for the locals, they rewards them with very low wages and these locals also work in poor working conditions. Multinationals do sign agreements to respect the interests of the locals and maintain ethical standards, but they fail to do this and they lack transparency in their operations. In order to eradicate the adverse effects of corporate practices in the developing nations, there is need to establish a strong regulatory framework. Multinationals need to be forced to improve the working conditions of the locals and labor standards. They also need to ensure that their operations does not abuse human rights and damage the environment. Moreover, governments need pay more attention to the violation of human rights by these corporations and enforce effective policies in eliminating abusive power of multinational corporations in the Third World countries. Works Cited Muller, Gilbert H. The New World Reader: Thinking and Writing About the Global Community. Boston: Houghton Mifflin company, 2007. Print. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Do the Multinational Corporations Harm the Developing Countries Essay Example | Topics and Well Written Essays - 1500 words, n.d.)
Do the Multinational Corporations Harm the Developing Countries Essay Example | Topics and Well Written Essays - 1500 words. https://studentshare.org/business/1812650-does-the-multinational-corporations-harm-the-developing-countries
(Do the Multinational Corporations Harm the Developing Countries Essay Example | Topics and Well Written Essays - 1500 Words)
Do the Multinational Corporations Harm the Developing Countries Essay Example | Topics and Well Written Essays - 1500 Words. https://studentshare.org/business/1812650-does-the-multinational-corporations-harm-the-developing-countries.
“Do the Multinational Corporations Harm the Developing Countries Essay Example | Topics and Well Written Essays - 1500 Words”. https://studentshare.org/business/1812650-does-the-multinational-corporations-harm-the-developing-countries.
  • Cited: 0 times

CHECK THESE SAMPLES OF Do the Multinational Corporations Harm the Developing Countries

The Role of Multinationals in the Globalisation of Innovation

Section 3 of the paper deals with Multinationals and their impact on the emerging market and how the globalization of innovation has enabled the developing countries to develop faster.... Conference on Trade and Development that 29 of the world's top 100 economies in the world were multinational corporations rather than states.... With such economic power, the dominance of multinationals as leaders in technological innovation and can be seen by the fact that 98% of the expenditure on Research and Development (R&D) by the 700 top R&D spenders, is done by the multinationals (Castellani and Zanfei 2005); the magnitude of the statistics can be fully comprehended when we see that the R&D expenditure of few major multinationals is more than the expenditure of some countries....
7 Pages (1750 words) Essay

Social Responsibilities of Multinational Corporations

If the host countries are developing nations, they benefit from all the western assets that the multinational corporations come with.... It has been argued that multinational corporations in developing countries do more harm than good and function there without a social conscience.... Most multinationals have chosen to operate in more developing countries because the business standards and restrictions there are less tight as compared to those in the West (Arnold 156)....
9 Pages (2250 words) Essay

Multinational Corporations and Sweatshops

owever, based on the critics discussed above, I can argue that the disagreement concerning the social responsibilities of the multinational corporations should not continue.... In addition, they expect the suppliers in developing countries to produce quality products within a short time or precise delivery schedule (Maitland 120).... This report "multinational corporations and Sweatshops" discusses multinational corporations that are obviously doing more harm to their workers and host countries than promoting equitable trade and international development....
6 Pages (1500 words) Essay

Trade Liberalisation and Issues for Multinational Corporations

The outcomes of free trade are desirable for the developing countries in terms of rapid industrialisation and for the multinational corporations in the context of cheap labour and profit opportunities in the new market ... Thus, carries several opportunities as well as issues for the developing countries as well as the multinational corporations from the developed world. ... his report provides an insightful study on the issues encompassing multinational corporations underlying trade liberalisation between developed and underdeveloped countries in the world....
9 Pages (2250 words) Essay

Coordination and Control in Multinational's

multinational corporations are known to have very large budgets that even have the ability to exceed the budgets of many counties.... From this essay it isclear that a Multinational corporation or enterprise's trait characteristic is their presence in more than at least two countries.... countries are competing with one another to win the attention of MNC's so they could be considered by these corporations.... Some claim, Knights Templar, founded in 1118 was the first multinational when it started banking....
8 Pages (2000 words) Essay

Multinationals in Developing Countries

The paper "Multinationals in developing countries" highlights that multinational corporations do indeed improve the well being of host nations.... Investment in developing nations have improved the material well being of the people in these nations through access to better goods or services and improved wages.... tudies conducted by the OECD reveal that developing nations tend to receive higher wages from multinationals than their local counterparts....
7 Pages (1750 words) Essay

Liberalizing Trade Between Developed and Developing Countries for Multinational Corporations

MNCs recognize the newly emerging markets in the developing countries and the transition economies as opportunities for expansion across borders and foreign markets.... The writer suggests that all nations can gain from MNCs as they have huge funds and cutting-edge technology to offer to the developing nations.... This paper highlights the issues that multinational corporations have to address in liberalizing trade between developed and developing nations....
10 Pages (2500 words) Term Paper

Multinational Corporations and Living Wage

Activists have been seeking ways to improve the wellbeing of these employees by putting pressure on the multinational corporations to adhere to labor laws, prevent intimidation, better health and safety standards, and pay a living wage in their global sourcing operations (Varley, 2008).... Unlike the current immigrants who labor in the illicit sweatshops of North America and Europe, laborers in developing countries basically have no alternative to the law or social service agencies....
8 Pages (2000 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us