Multinational Corporations Free Essays

Globalization The liberal economic theory Is based on the fact that not all state’s territories include the blessing of various natural resources. Therefore, state economies over the years have established several laws that make economic global trade a rather fair transaction. In its core trading was created to facilitate the gaining of products for territories in which producing a specific good might be limited due to their natural resources from those with comparative or absolute advantage. We will write a custom essay sample on Multinational Corporations or any similar topic only for you Order Now Economic liberalizes believe that governments should not interfere in the markets, because international elate Is maximized when states practice comparative advantage and specialize in certain products. It makes more sense for a country with easier and cheaper ways to produce a specific product do so in abundance and share it through global trade with the world, rather than it be extremely difficult and costly for a single state to do it alone. Through foreign direct investment, multinational corporations are able to invest in other countries by establishing their own facilities in foreign territories. This is the base of globalization. Through FED and Mans companies are locating closer to customers and Introducing themselves In the same area as competitors, meanwhile they hire local manufacturers and employees to assist the production of their product. By doing so, they not only fuel the international economy by creating a larger amount of production for trade, but they also are creating Jobs for people where they are most needed. They usually establish foreign facilities and plants in countries where wage is extremely cheap- indicating that these countries are probably home to extremely poor human beings, who would have trouble finding a Job In the first place. Yet they also search to Invest In states that have attractive resources. FED Is good for developing countries because they make their economies stronger. By paying taxes and training personnel, they enrich their host territories economy and development. Economic liberalizes believe that Mans can serve as a peace keeping potential during trying times between two countries. That interdependence globally would cause powers to be more understanding and hesitant before creating a war. However stating that underdeveloped nations cannot Lully control the Mans because of lack of proper enforcement of human right laws, there is a chance that the workers may be exploited, but through safety and health standards, this situation is usually controlled. I strongly believe that developing states should allow Mans to house facilities in their territories. It’s clear that for development, you must establish a strong economy, and FED and Mans without a doubt assist lesser-developed countries in reaching development. They create Jobs for those who are uneducated and therefore disqualified from many Job technological advancement of local companies. I do, however, support that specific tariffs and laws should be set against the Mans goods being sold in that state’s market, because local producers could not stand a chance next to mass productions. Also, the dangers of human rights being violated are possible when establishing an NC in a state with an unrecognized government and must be highly investigated for proper activity. In regards to those issues I believe that as long as the General Agreement on Tariffs and Trade (GAIT) enforce and practice their trade principals the global trade market will be a safe place. The prevarication and liberalizing of trade and foreign direct investment are the best way to go about developing a state. How to cite Multinational Corporations, Papers Multinational Corporations Free Essays Since industrial revolution, the world has changed tremendously.   Many industries have cropped up causing a great threat to the environment.   Globalization has encouraged free trade between countries leading to development of massive multinational corporations. We will write a custom essay sample on Multinational Corporations or any similar topic only for you Order Now Economists have varied ideas on the definition of a Multinational Corporation. However, various dimensions help to established what multinational corporations are.   This is in terms of ownership, management, strategy and its structure. (Root, 1994). Multinational corporations venture into various countries setting up factories and industries to increase their productivity.   It is largely viewed that sometimes they venture into countries with lenient air and water pollution controls to increase their production.   However, multinational companies usually pursue policies that are host country- oriented (perlmutter, 1969).   Although these corporations may operate in foreign countries the parent company exercises direct control over the policies of its affiliates. Multinational corporations serve an important role to the economy of the host country. They create employment opportunities, wealth and improve the technological aspect of the host county. (Dunning, 1993). Corporations also gain a lot from such an investment. Labor intensive operations can be shifted to countries that can provide cheap labor.   In other cases availability of raw materials and tax advantages act as incentives.   The corporations are able to spread risks instead of putting all the capital in a single country (Dunning, 1993). Examples of multinational corporations include Shell, Coca-Cola, Toshiba, Unilever and Honda. The Royal Dutch Shell Group is a huge multinational corporation with annual gross sales of more than 179 billion dollars.   It is one of the world’s top oil companies and the seventh largest chemical company. (www.groundwork.org.za/pamphlets/shell.asp) The company operates in over 140 countries and employs thousands of people.   It is based upon exploration, extraction, and transportation and refining of fossil fuels, oil and gas.  Ã‚   It supplies petroleum products to its thousands services stations around the world. (http://www.groudwork.org.za/pamplets/shell.asp.) In South Africa Shell Group owns the largest oil refinery called South African Petroleum Refinery (SAPREF).   It operates jointly with British Petroleum (BP). SAPREF is situated in Durban surrounded by residential areas with a huge population of over 200,000 people. (www.groundworks.org.za/pamplets/shell.asp) The company enjoys a lot of cheap labor and employs over 600 people and the same number of contractors.   The company also through SAPREF is able to refine over 170,000 barrels of crude oil a day.   It has a well connected network in the country with pipelines running from refinery to the storage tanks. Therefore it enjoys a lot of comparative advantages enabling it to grow strongly. The south Durban basin consists of over 100 industries. SAPREF refinery occupies one of the belts which are near residential areas.   Durban is one of the worst industrial pollution hit zone in South Africa.   Many people as a result have suffered Leukemia Chest complaints and other related ailments. (Butler Hallowes, 2002). Many accidents and incidents have also occurred which tarnished its operational record.   These include reported sulphur dioxide emissions, release of hydrogen fluoride into the atmosphere (in 1998) and others.   These has paused a serious threat to the firm, host community and workers. (www.foenl.org) As a result the South African environmental Alliance group coordinated and lead community action and negotiations with the industry.   There were concerns over excessive pollution from the industry, poor record of industrial operation and management, lack of a strong and enforceable regulatory framework for the industry and others.   Through community mobilization, meetings, demonstrations and media campaigns, shell had to introduce pollution reduction plans and to upgrade its facility.   It was resolved that shell’s international management address local concerns. This was during shell’s management AGM in London and The Hague (http://www.groundwork.org.za/pamphlets/shell.asp). Although the firm has had to spend a lot of money in repairing the detective pipelines, the company has reduced the rate of pollution and increased efficiency.   There has been growing confidence in the firm and this has improved it sales drastically. The social fabrics of people, local needs and interests have to be considered by any firm for it to enjoy maximum productivity.   This comes with improved confidence that leads to improved services.   All multinationals therefore ought to carry out a thorough research before investing.   ACME can learn from this experience to boost its productivity. How to cite Multinational Corporations, Essay examples