Tncs

MNCs are business entities that operate in more than 1 country. Typical MNC normally functions with a headquarter based in 1 country while facilities are based in other countries. This model allows the company to take advantage of incorporating in a given locality while also being able to produce goods and services in areas where the cost of production is lower.

1) Symbolize what’s wrong with gl-on

* These comp’s are richer than most countries in the developing world (revenues of Gen. Mot. > 190 bil. Dol. => greater than GDP of more than 148 countries

* Politically powerful

* Pursue profits / survive by getting costs down in any way within the law

2) At the center of bringing benefits of gl-on to the developing world

* Transfer of techs

* Bring jobs and economic growth to the developing countries / inexpensive goods of high quality to the developed ones

Corporations are in the business of making money, not providing charity => corporate incentives must be reshaped

Incentives:

* No government regulation – no incentives from corps to protect env. Sufficiently (actually they have incentive to despoil it if doing so saves them money)

* Bribery and corruption in developing countries / in sophisticated economies – political campaign contributions

* Impact on local communities => TNCs drive out small businesses / squelch their competitors

* Strict policy against union organizations => workers are often low-paid and not provided with health care benefits.

* Rarely corporate managers and CEOs are found guilty of corporate crime

* In developing countries TNCs can threaten to move elsewhere (if one leaves another may not fill the gap). Money speaks loudly. Corporate efforts to construct favorable regulatory environment in poor countries are often successful.

How to make gl-on work? Incentives must be reshaped.

* Introduce corporate social responsibility

BSR is as much a moral issue as an economic one....