Criticism And Defend Of Mnc's By.. Vikrant Kumar

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INDEX Page no. 1

Cover page

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Index Page

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Introduction

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What is MNC.?

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why company go abroad.?

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Top 10 MNC’s

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Criticism of MNC’s

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Graphs

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Criticism Points & garph

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Support Evidence

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H.C.R. in Nike

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Disagreement with Corporations

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Defends of MNC’s

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Bibliography and Links.

END.

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INTRODUCTION: Criticism and Defends of MNC’s What is MNC !: MNC(Multinational Corporation/Companies or MNE(Multinational enterprise) or TNC(Transnational Companies). Such companies have offices and/or factories in different countries. They usually have a centralised head office where they coordinate global management. “A corporation that has its facilities and other assets in at least one other foreign country.” or “MNC Company is the company where the company produces the goods in any where of the world and sells the goods in any where of the world.” e.g. Nike, Coka-Cola, Wal-Mart Honda etc.

Why Compaines go Abroad: • Companies go abroad for two main reasons: • For Market Seeking • For Resource Seeking • Lately, companies are also venturing into other markets for Knowledge Seeking

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Top Ten MNCs by Market Values: Rank

Companies

Market values

1

Microsoft

(in billion $) 264

2

GE

259

3

Exxon Mobil

241

4

Wal-Mart

234

5

Pfizer

195

6

Citigroup

184

7

Johnson & Johnson

170

8

Royal Dutch/Shell

149

9

BP

144

10

IBM

139

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MN Criticism of MNC’s: •

MNC’s are not provided much salary to their employees as they deserve.

•

MNC’s are affecting the economy of the countries. They taking our money to their country.

•

MNC’s just wanted to increase the sale of their products, they are not considering about the effect of that product.

(E.g. china made toys which are not healthy or the children’s, China use harmful chemicals to produce them. E.g. Production of cigarettes by Wills, they are not considered about the hoi-polloi they mention on the packet of cigarettes that “ Cigarettes are injurious to health” but on the other hand they spend huge money on the selling/promotion of the cigarettes )

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CRITICISM SHOWS ON THE BASES OF GRAPH: E.g. Workers Pay vs. Productivity:

Workers Pay: Ratio of Top 10% vs. Lower 10% :

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Ratio

RatioofW orkers' Pay

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GD Few more points of Criticisms Towards MNCs

• A threat to national sovereignty and democratic accountability • Accused of neutralizing anything that stands in the way of profits • MNCs accentuate social inequalities • MNCs destroy jobs

3000

2500 Page no. 8

*Support evidence Evidence supporting this belief includes invasive advertising (such as billboards, television ads, adware, spam, telemarketing, child-targeted advertising, guerilla marketing), massive corporate campaign contributions in democratic elections, interference in the policies of sovereign nation states (see, for example, Ken Saro-Wiwa), and endless global news stories about corporate corruption (Martha Stewart and Enron, for example). Anti-corporate protesters suggest that corporations answer only to shareholders, giving human rights and other issues almost no consideration. In practice, the management of a limited company do have primary responsibility to their shareholders, since any philanthropic activities that do not directly serve the business could be seen as a breach of trust. This sort of financial responsibility means multi-national corporations tend to pursue strategies which intensify labour, and attempt to reduce costs. For example, corporations will (either directly, or through subcontractors) attempt to find low wage economies with laws which are conveniently lenient on human rights, the environment, trade union organization and so on (see, for example, Nike, Inc.). Additionally, corporations, in the ongoing pursuit of material production and devotion to material ends, neglect the soul of humankind, intentionally forcing not only Americans, but the rest of the world to abandon their religious convictions and their religious practices, so that they live not as "one nation under God" but as "one nation under corporations."

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Source: http://en.wikipedia.org/wiki/Nike,_Inc.

Human rights concerns (H.R.C.) in NIKE: Nike has been criticized for contracting with factories in countries such as China, Vietnam, Indonesia and Mexico. Vietnam Labour Watch, an activist group, has documented that factories contracted by Nike have violated minimum wage and overtime laws in Vietnam as late as 1996, although Nike claims that this practice has been halted. The company has been subject to much critical coverage of the often poor working conditions and exploitation of cheap overseas labor employed in the free trade zones where their goods are typically manufactured. Sources of this criticism include Naomi Klein's book No Logo and Michael Moore's documentaries. Nike has been criticized about ads which referred to empowering women in the U.S. while engaging in practices in East Asian factories which some felt disempowered women.[24] During the 1990s, Nike faced criticism for use of child labor in Cambodia and Pakistan in factories it contracted to manufacture soccer balls. Although Nike took action to curb or at

least reduce the practice of child labor, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it hard to ensure that child labor is not being used.[25] In 2001 a BBC documentary uncovered occurrences of child labor and poor working conditions in a Cambodian factory used by Nike.[26] In the documentary, six girls were focused on, all of whom worked seven days a week, often 16 hours a day.

A July 2008 investigation by Australian Channel 7 News found a large number of cases involving forced labour in one of the biggest Nike apparel factories. The factory located in Malaysia was filmed by an undercover crew who found instances of squalid living conditions and forced labour. Nike have since stated that they will take corrective action to ensure the continued abuse does not occur.[28]

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People who object to corporate culture are forced into the corporate "system", given a number, an address, tracked by computers, so that they can be used as perfect corporate consumers, thus making corporations and their CEO's wealthy, in complete control over the means of survival of everyone, and so powerful they can never be challenged. The message from corporate America is clear: Hold a corporate job, buy our corporate products, be an obedient corporate American, or be destroyed. In this corporate imperialism, no other way of life or culture is allowed to exist, or it is allowed to exist only "under" the corporations. It can never be the dominant power structure, even in its own country.

Disagreements with corporations •

•

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Activists argue that corporate globalization corresponds to a displacement in the transition from a highly industrial-based economy to one where trade development is connected with the financial deregulation on the basis of circulation of capital. Globalization has changed the world’s awareness of time and space, but also increased the pressure of the market system throughout all reaches of the globe. An increasing number of diverse societies have been pushed into a market structure, leading to displacement. As this expansion has occurred, market-governed regulation has outrun the grasps of the state. The government cannot control the markets, widening inequalities have developed, new forms of sophisticated violence have been created, and the corporations have gained strength. People have begun to reject capitalism and the corporate globalization, pushing more for a different globalization that does not practice the same inequality views.

DEFENDES OF MNC’s

The defenders of corporations would argue that governments do legislate in ways that restrict the actions of corporations and that lawbreaking companies and executives are routinely caught and punished. In addition from the perspective of business ethics it might be argued that chief executives are not inherently more evil than anyone else and so are no more likely to attempt unethical or illegal activity than the general population. Nonetheless, the structures of bureaucracy and the financial imperatives of capitalism seem to result in forms of behaviour which are often damaging for local communities, employees and the environment.

Despite the criticisms against the MNCs, we need to remember that: MNCs are engines of growth. • MNCs are social institutions. • In addition to being profit agents, MNCs can also be good corporate citizens. •

Therefore, MNC should not be destroyed, but rather channeled and harnessed for the benefit of the global human society.

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Consider some of the facts: “As Jagdish Bhagwati, the eminent Columbia University economist and author of In Defence of Globalisation, • Argues, a raft of empirical studies has been conducted in Bangladesh, Mexico, Shanghai, Indonesia, Vietnam and elsewhere, and the findings are straightforward. Multinationals tend to pay well above the going rate in the areas in which they are located. • In the case of US multinationals, pay is 40 per cent to 100 per cent above local wages. No wonder locals queue up to get a job whenever a multinational opens its doors in a poor country: wages that may look miserable to us allow their recipients in Burma or Bangladesh to live in relative comfort.”

He cites Vietnam as a case in point. “Workers fortunate enough to work for multinationals there enjoy a standard of living that is twice as high as that of the rest of the population. The average wage-earner in Vietnam earned US23c an hour, but workers in foreign-owned businesses fared far better, making an average of US42c an hour. When Glewwe conducted his work, 15 per cent of Vietnamese were classified as very poor and 37 per cent as poor. • But nobody working for multinationals was classified as very poor and only about 8 per cent were poor, proving that working for a foreign company is the best way to escape poverty and deprivation. Foreign employers drive wealth creation, pushing up everybody’s wages.” •

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Women seem to also benefit from MNCs:

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• “The presence of multinationals in Vietnam also disproportionately benefits women and the young, two groups that are usually marginalised in poor countries. Two-thirds of workers in foreign-owned businesses in Vietnam are women, and nearly two-thirds are in their 20s, confirming that globalisation is driving social change and female emancipation.” •

The United Nations will continue to encourage "development" based on responsible multinational companies, as will most rich countries' development agencies, whose strategic planning includes the importance of multinationals for the "development of the countries in the Global.

CultureWatch By Bill Muehlenberg’s commentary on issues of the day…

Also In Defence of Multinationals: •

Multinational Corporations (MNC’s) often get a bad rap, and they are usually seen as a source of exploitation and oppression. This mindset goes back at least to Lenin. Following Marx, Lenin argued that capitalism is inherently imperialistic, and one country becomes enriched only by the impoverishment of another. The West is wealthy, he argued, because it bleeds dry the Third World.

Reference: http://www.billmuehlenberg.com/2006/12/19/in-defence-of-multinationals/

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BIBLIOGRAPHY & LINKS

Major web-site and topics taken as references are the following; • • • • • • • • • • •

Anti-consumerism Anti-globalization CounterCorp Film Festival McLibel case Multinational Monitor Sweatshops Ralph Nader Union Organizer When Corporations Rule the World Corporation Criticisms of corporations

Other References This article includes a list of references The Corporation Bakan, J (2004) The Corporation. • • • •

Political Actions by Billy Knows Hertz, N (2002) Silent Takeover: Global Capitalism and the Death of Democracy, Arrow. Klein, Naomi (2000). No Logo. Vintage Canada. ISBN 0-676-97282-9. Monbiot, G (2001) Captive State: The Corporate Takeover of Britain, Pan.

1. ^ Abeles, Marc (2006). "Globalization, Power, and Survival: an Athropological Perspective". Anthropological Quarterly (Institute for Ethnographic Research) 79 (3): 484–486. 2. ^ Delacampagne, Christian (2006). "The Politics of Derrida: Revisiting the Past". MLN (Johns Hopkins University Press) 121 (4): 869. 3. ^ The Corporation 4. ^ Political Actions by Billy Knows 5. ^ Zetter, Kim (2008-06-13), "The Secret Seven", Condé Nast Publications, http://www.portfolio.com/news-markets/national-news/portfolio/2008/06/13/Anti-Corporate-Websites, retrieved 2008-09-03

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6. ^ Zetter, Kim (2008-06-13), "Dotcom Confidential", Condé Nast Publications, http://www.portfolio.com/news-markets/national-news/portfolio/2008/06/13/Dotcom-Confidential, retrieved 2008-09-03 7. ^ a b c d e f g h Juris, Jeffrey S.. "The New Digital Media and Activist Networking". The Annals of the American Academy of Political and Social Science (Sage Publications, Inc.) 599: 191–199.

External links 1. Farewell to the End of History: Organization and Vision in Anti-Corporate Movements by Naomi Klein, Socialist Register, 2002 2. Retrieved from "http://en.wikipedia.org/wiki/Anti-corporate_activism" Categories: Anti-corporate activism | Corporations law | Corporate crime This is the theme of a new article by Allister Heath penned in the Spectator. http://www.theaustralian.news.com.au/story/0,20867,20948144-7583,00.html Thursday, February 5, 2009 Global Compact 2.0: multinationals to the rescue! By Albert Sales i Campos*, translation by Tamara Slowik. (1) http://www.asiafloorwage.org/ (2) http://www.cleanclothes.org/appeals.htm (3) For a thorough analysis of the deficiencies of social audits in the textile sector, we recommend the report Looking for a quick fix, available at www.cleanclothes.org/publications/quick_fix.htm (4) Many workers in the apparel industry in recently industrialized countries have been driven out from rural areas by agro export policies driven by rich countries' large corporations and international financial institutions. (5) Those interested in the impact of Spanish multinationals' activities may find contrasted information and documents in the following websites: http://collectiurets.wordpress.com/, http://www.noetmengiselmon.org/, http://repsolmata.ourproject.org/, http://supermercatsnogracies.wordpress.com/, http://www.unionpenosa.org/, http://www.turismo-responsable.org/, * Albert Sales i Campos is an associate professor at the Department of Political and Social Sciences of Universitat Pompeu Fabra in Barcelona. He is also an activist of the Clean Clothes Campaign. © Illustration by Miguel Brieva. Posted by Bart at 9:28 PM Labels: UN Secretary-General

THANK YOU By: VIKRANT KUMAR