Multinational Corporations ( Mncs ) Role

Can a multinational firm adopt varying ethical standards [such as with regard to product safety (Pinto), employee benefits (Nike) and “kickbacks” to win business (Siemens)] in its global operations? Why or Why Not? Discuss in depth based on the goals of multinational corporations? (Be sure to identify the merits and demerits for both options).

Sustainability and business are not always looked as a good functioning pair. Businesses often struggle to implement sustainability measures, as they think that it is costing money to shareholders/investors. However, due to increasing pressure from the public, businesses are being forced to reconsidering at adopting sustainability and good business practice. In today's interconnected global economy, the long-term goals and success of business are inevitably connected by embedding the environmental, social and governance issues into corporate management, operations and supply chain. While corporate sustainability recognizes that, though the corporate growth and profitability are vital, it also requires the corporation to pursue societal goals, particularly those relating to sustainable development like; safeguarding environmental, social equality and economic development.

Numerous debates have been waging over the past few years among business elites about the whether or not a corporate entity has a responsibility to society. It’s an extremely interesting topic with real and global ramifications that impact nearly every person and animal on this planet in one form or another. Anyone who owns public shares in a company has invested hard-earned money into a corporation based upon their perception that the company will be profitable and sustainable. The corporation’s board of directors are then responsible to manage the company in such a way as to increase their share-holders’ investment. For hundreds of years, this attempt to increase a corporation’s worth was done with little or no interest in social responsibility. Until very recently this topic was not very much in the public eye. However, at the moment the global economy is rapidly changing and business transparency is increasing through the accessibility of information across the world. Social and global change is moving faster than ever and progressing through this century any business will undoubtedly need to keep up to remain profitable. More mature business students will certainly recall being bombarded with the idea that the only responsibility of a corporation was to increase the value of the company and maximize long-term shareholder wealth without regard to ethics or social obligations. Is there a correlation that occurs between large multinational corporations and their

One thing to be observed in case of the MNCs is that they have usually developed in a impulsive and unconscious manner. Very often they developed through "Creeping incrementalism" Many firms become multinationals by accident. Sometimes a firm established a subsidiary abroad due to wage differentials and better opportunity existing in the host country.

Transnational Corporations (TNCs), also known as Multinational corporations (MNCs), are businesses that have subsidiaries in at least one other state other than their home state (Jackson, 2013) Due to their reach they have a fairly significant role on global politics. They control the mass of the economy and GDP of many states, place pressure on policy makers through their decisions and influence the decisions of citizens through media. They, however, would not be able to function without the rules and economic control states have to create a market place and media channels. This limits their power to an extent but they still retain a position of power within the global political scene.

This investment encourages entrepreneurship and breeds a culture of competition, increasing competitiveness amongst local companies, causing them to improve their own goods and services by increasing their efficiency and ultimately quality in order to better compete.

How Multinational Corporations Can Better Impact Social Causes, Mitigate Community Emergencies and How the Right Response to Each Adds Multi-Bottom Line Value in Finance, Culture and Brand

“Researchers and theorists suggest that the skills and techniques of a MNC are very different than those of an organization without a global presence.”

In the management of multinational corporations there are a multitude of ethics issues that arise. For instance in the United States it is illegal to bribe someone, but in Romania where it is illegal but still socially acceptable bribes sometimes are required to make a deal in business; when it comes down to a matter of cultural differences there is a lot more pressure for corporations to behave in an unethical manner. Other common problems are things like a corporation asserting political influence, using products that are legal in one country but illegal in others, tax evasion, and the exploitation of workers in developing counties. Though there are many problems faced there are solutions to these problems as well.

Globalization is the establishment of economic, political, social, military, scientific or environmental interdependence that span worldwide distances (Steiner). This process has evolved for hundreds of years. However, this trend has rapidly increased over the last century, primarily due the forces of an ever changing society, government, and business environment. Corporations are expanding their business operations all over the world and are evolving into multinational corporations. Companies choose to invest capital for starting, acquiring, or expanding their enterprise to another country predominately for a few factors. Investing capital in a foreign nation can lead to growth. By entering a new market, a new segment of consumers can be reached, leading to new potential customers (Steiner). In addition, corporations can seek efficiencies in a foreign nation. With different resources located all around the world, as well as, generally less strict regulations on business in developing countries, multinational corporations can take advantage of cheaper labor, economies of scale, and other resourcing efficiencies to reduce their overall costs (Steiner).

Multinational corporations have operations in multiple countries which in turn brings together many cultures. Saying a multinational corporation has no moral or social responsibility to engage in corporate social responsibility (CSR) programs goes against what a company should strive to be. In recent years, firms have undertaken corporate social responsibility programs due to pressure from their stakeholders as well as their shareholders (McWilliams & Siegel, 2000). If a company does not believe they have to be morally and socially responsible, that company will not be around long.

The power globalisation brings politically is extreme to the point that "globalization is thought to result in the erosion of nation states and national sovereignty by new international actors." (Yeates, 2001). This can be seen looking into transnational corporations and the huge rise of these, to the point that some TNC 's have huge influence of a state due to their size and worth, even to the extent of having a larger GDP than the country they are looking at redeveloping. "TNCs can be caught between competing value standards of political non-interference in a country’s domestic affairs and the pursuit of either activist involvement in such politics or a penalizing withdrawal from the country aimed at forcing changes in the host government’s policies." (UNCTAD, 1999). To the point the state create policies to allow for TNC 's to establish themselves within a given country, which benefits them most due to they have no attachment to government and move freely across the globe. "Since TNCs owe no allegiance to any state, they (re)locate wherever market advantage exists." (Yeates, 2002). Making TNC 's a very attractive investment for states due to the pulling power they bring to a countries economy. If even it means cutting costs in the public sector for example, as the opportunity to have a TNC within the country more be extremely beneficial for the economy and society due to the revenue and employment opportunities it brings. Also see how economic policies are being

Recent advances in information technology, deregulation, and market liberalization worldwide have resulted in the growth of Multinational Corporations. Multinational Corporations or MNCs are growing both in scale and complexity. Today, a MNC can be present in multiple countries, dealing in multiple markets with different currencies, speaking different languages, and adopting to different cultures as they spread their wings across the world. But with growth, they also have to deal with different legislations, and regulations. They have complex ownership structure with complex supply chains and extra and intra-business transactions. These organizations who employ 1000s of people, deals with billions of customers every day that results in millions of transactions taking place continuously across group businesses, time zones, regional, and national boundaries. These MNCs are constants growing and are evolving in different ways in different countries that results in thousands of pages of financial information generated each day around the world. This puts constant pressure on MNCs accounting departments to keep pace with the constant change in operations and regulations to achieve strength in depth, and be consistent in the hundreds of locations around the world (PWC, 2012). MNCs, and their stakeholders expect consistent quality of audits from each of their location spread across the globe. MNCs headquarters, the board and their committees expect their group

As Multinational Corporations (MNCs) have become a growing force in world trade they have attracted supporters and critics. Briefly discuss the arguments put forward by both sides. Explain how the WTO Organisation assists in managing world trade.

TNCs’ environmental responsibilities are becoming particularly a matter of urgent concerns, heavy emphasis and worthy research. All corporates should be theoretically obligated to fullfil their social accountabilities including the environmental ones because their manufacturing and managing activities impact on the environment, but TNCs are playing a more crucial role in their host countries’ sustainable development because of their massive sizes and powerful strength. They can cast the governments aside and have the power to move all or part of their business overseas.They should not treat the host countries as their pollution pouring zones and profit from overseas weak environment.