Transnational Companies

October 31, 2006 at 2:37 am 5 comments

When discussing transnational companies (TNCs) the most significant issue in my opinion is the fact that in most cases, these global companies are not governed by the same types of laws as national companies are. In order to save immense amounts of money TNCs re-locate in far off, lesser developed parts of the world. They do so in order to avoid the democratic laws which govern the western world.

 

Due to their great revenue and span, the concerns of host countries take second priority to TNCs unethical needs and requests. TNCs are now known to establish themselves in a country and proceed to destroy local ecosystems, take part in child labour, and avoid paying proper wages for labour. In summery, they take advantage of the fact that lesser developed countries have lower environmental and social standards, in order to attract business.

 

The behavior of TNCs will inevitably continue, because of the influence they have on international trade and economics. Organizations such the WTO and the U.N will therefore correspond their goals to the wishes of TNCs, since they can not survive as predominantly western lead organizations without the support of globally successful TNCs. TNCs are able to hold this influence because of the amount of global market share they have come to control. In fact, it is typical for a TNC of today to make more than numerous countries combined.

           

Included in the following are resources I found helpful in researching the topic of TNCs:

 

Foreign Direct Investment. Wikipedia. Retrieved October 12, 2006, from        

http://en.wikipedia.org/wiki/Foreign_direct_investment.

 

Gnazzo, V.
Douglas. Transnational Corporations: The
New World Order. Retrieved October 11, 
2006, from http://www.financialsense.com/fsu/editorials/gnazzo/2006/0209.html.

 

Infact (n.d.) Infact: Challenging Corporate Abuse, Building Grassroots Power, Since 1977. Retrieved October 13, 2006, from http://www.infact.org/homepg.html.

 

Library of
Alexandria. Transnational Corporations. Received October 13, 2006, from
http://www.halexandria.org/dward318.htm.

 

Nisbet, T. Charles. (1970). Transferring Wealth from Underdeveloped to Developed Countries via Direct Foreign Investment: A Marxist Claim Reconsidered [Electronic version]. Southern Economic Journal, 37 (1), 93 – 96.

 

Raghavan, Chakravarthi. (1996). TNCs Control Two-Thirds of World Economy. Retrieved, October 13, 2006, from http://www.hartford-hwp.com/archives/25/007.html. 

Shah, Anap. (2002). Corporations and Human Rights. Retrieved October 12, 2006, from http://www.globalissues.org/TradeRelated/Corporations/HumanRights.asp.

 

Sierra Club. (n.d.). Transnational Corporations: Statement of the Problem. Retrieved October 11, 2006, from http://www.sierraclub.org/policy/conservation/transcorp.asp.

 

UN Committee on Trade and Development: Multinational Corporations (MNCS) in Least Developed Countries (LDCS). Retrieved October 11, 2006, from http://www.globalpolicy.org/reform/2002/modelun.pdf. 

University of
Minnesota. (2003). Norms on the Responsibilities of Transnational Corporations
and Other Business Enterprises with Regard to Human Rights, U.N. Doc.E/CN.4/Sub.2/2003/12/Rev.2. Retrieved October 14, 2006, from http://www1.umn.edu/humanrts/links/norms-Aug2003.html.

 

Emilie Sheff

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5 Comments Add your own

  • 1. prclass  |  October 31, 2006 at 3:04 am

    There is no doubt that some corporations take part in the use of child labour and subjecting workers to inhumane working conditions. But I believe, from scholars I cannot list off the top of my head, that these situations are becoming more and more isolated. Can it not be argued that transnational corporations are bringing opportunities that otherwise would be in-existent? Just because other countries have lesser standards then North America has adopted does not mean its exploitation. Just my thought.

    dustin

    Reply
  • 2. Jamie Gill  |  October 31, 2006 at 5:17 pm

    Emily,

    The information you stated regards to TNC’s just wanting to make money and avoiding laws in First World countries, I 100 percent agree with you. I did my Business Report on Offshore Labour, and those are the trends that I came across while researching.

    It is very unfortunate, for companies to be self interested and just wanting to make money.

    Jamie Gill

    Reply
  • 3. prclass  |  October 31, 2006 at 10:30 pm

    Hi Jamie and Dustin and other readers

    A few thoughts come to mind:

    If you haven’t watched the documentary called The Corporation (http://www.thecorporation.com/) yet you might find it really interesting in relationship to the growth of transnational companies and off shore labour. I’ve seen the video at Blockbuster and it is available here at the school library.

    In Canada we’re told that the largest job growth sector is the small to medium sized business with 50 or fewer employees. This size of company gives some human scale to capitalism IMHO. I hope the trend will be of benefit to graduates of this program.

    I think the dilemma with off shoring or transnationals is that the human scale seems to get subverted. The incredible scope and large numbers of people employed becomes hard to comprehend. Companies like FORD lay off thousands of people. Yes companies are trying to save/make more money by using off shore labour.

    The world is an ambiguous place. If a North American company moves some work off shore and that work is welcomed in the new local is that a win-win situation or is that exploitation? If language is lost or cultural behaviours and traditions is that an inevitable cultural evolution or is it cultural imperialism?

    Most people want to work and for a fair equitable wage. They want some sort of security. They like to learn new things. They like to help others with their personal talents. Or, they like to see that the services or items produced are quality, or useful, or used. What seems to happen in large companies is that one or more of the previously mentioned items is missing. Maybe you’re making something, but you never see anyone using it. PErhaps you are a customer service representative, but you do not actually interact with customers that much – unless they are really mad… Work becomes impersonal. Multiply that concept across an organization with employees in several countries and all of a sudden the people are not treated much like the golden rule suggests.

    I used to work in a corrugated paper plant for the equivalent of three and a half years while I was a student. The fair wage was there and there was a sense that the product (boxes, cardboard, beer cases) served useful purposes, but not much of the other stuff lingered: the job wasn’t secure, ther weren’t many new skills to learn, and people’s personal talents were saved for their home life as there weren’t many outlets for those talents in that manufacturing assembly line format.

    Most people have occupations or use the services of companies that also have some ambiguity in their purpose or function in society. Canadians love Tim Hortons coffee and overlook the use of disposable cups or who grew and harvested the coffee and under what conditions…

    – not sure where I’ m headed with this, other than to say that if one ends up working for a small local company or a massive global force one needs to communicate as best one can given the variables at hand and to not knowingly harm or take things like culture and rights and traditions away from others, nor to advise that people be used, nor to knowingly impose harmful practices: a tough order in this complicated world.

    Reply
  • 4. prclass  |  October 31, 2006 at 10:57 pm

    who posted this? Dana?

    Reply
  • 5. prclass  |  November 6, 2006 at 5:18 pm

    Yes – it was my post. Dana

    Reply

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