To what extent are transnational corporations globalizes organizations? Transnational corporations (Tons) are organizations that have a global approach to markets with operations and economic interests in more than one country. They are globalizes entities in the sense that they have created social and economic interdependence between nations. This has been facilitated by cross-border movement of people, goods, capital and ideas in the name of business and trade. Social interconnectedness takes place as Tons are more likely to transplant their existing corporate culture and take their nation’s interests with them when they move offshore.
However, there are limitations to what extent Tons can be considered truly globalizes organizations because much of the actual trade generated is largely confined to specific countries or regions. There has been a bias towards the developed north than the poorer south. 2) How have transnational corporations affected world trade? World trade represents the exchange of capital, goods, and services across international borders or territories. As of 2012, the international trade of goods worldwide stands at an estimated $36 trillion.
Like the rise of technology, Tons have sped up this honeymoon simply because they are incredibly wealthy and are a major source of foreign direct investment. Big corporations like General Motors and Walter are able to command economic resources which are bigger than many of the major nations. Tons have affected world trade by arguably facilitating a broader distribution of wealth through Joint venture. By moving offshore to developing countries, they are reducing levels of unemployment and introducing new technology and capital.
However, a negative effect is that in regions and countries where Tons play a major role, high tariffs on imports have been imposed. This includes the US, European Union and Japan where 88 out of the world’s top hundred Tons are based. This has affected the ability of developing nations to export their products which would generate wealth for them. 3) In what ways could the expansion of Tons in developing countries be Justified? Economically speaking, transnational corporations in developing countries inject large amounts of foreign direct investment into the country economy.
This then triggers a chain of positive effects. For example, with Tons investing in certain industries, the demand for supplies increases. As such, this encourages local genuineness to sprout up to meet these needs, inducing a multiplier effect. This creates employment opportunities at different levels. Also, Tons pay higher wages than the local average and have higher labor standards, although whether these labor laws are enforced properly is another matter. When the rate of unemployment decreases and wage earnings go up, people get lifted out of poverty and the purchasing power of the local population increases.
This in turn increases demand tort goods and services ultimately leading to more private-sector investment which is beneficial for the country. On another side note, Tons also introduce cutting edge technology in developing countries which is necessary if a country wants to move forward in the 21st century. 4) What ethical and social responsibility concerns do sweatshops raise for transnational corporations and how have they tried to resolve this? Depending on one’s view point, sweatshops of Tons in developing countries are either a ‘necessary evil’ or ‘stepping stone’ on their path to prosperity.
Regardless of the answer, it cannot be denied that globalization has made the actions of TNT answerable not Just to investors but to the world’s ethical backbone. Tons which use headships have to take into consideration labor conditions, minimum wage, work hours and general workforce wellbeing. The issue of child labor is also a concern which Tons have to deal with. With consumers being increasingly concerned with ‘ethical shopping, firms are starting to realism that any association with negative sweatshop labor can lead to a dip in profits.
As such, Tons are trying to become more transparent and stricter in enforcing appropriate codes of workplace conduct. They have also introduced Corporate Social Responsibility which deals with ethical ways a company can make money. This is a form of self-regulation which is integrated into the business outlook. 5) Are transnational corporations the cause of uncompetitive trade in the textile and agricultural trade sectors or Just part of it? It seems to appear that Tons are the main cause of uncompetitive trade in the textile and agricultural trade sectors.
If Tons were considered as one big organization, they would essentially have monopoly over both types of trade. A good example is Zambia where the number of textile companies dropped from 140 in 1991 to Just 8 by 2002. In 2001, Bangladesh tried to convince the US to abolish quotas imposed on Bangladesh garment imports. To educe competition in their own domestic markets, Tons are backed by their own governments which impose high tariffs on agriculture imports. This negatively affects agricultural focused developing countries which seek to export.
Tons affect 86 per cent of the world’s land that is cultivated for export crops. An increasing number of local farmers, generally unable to compete with powerful Tons in production and marketing, become marginalia and lose their land. On the other hand, local peasants and laborers who have their land may still be excluded from most of the benefits of agribusiness. This happens through Tons increasingly engaging in untactful arrangements with small local farmers to produce export crops for sale to the TNT. They are able to control the price and crop type.
These local farmers become laborers on their own land. 6) In what ways has Australia, especially the manufacturing sector, been impacted upon by Tons? Australia’s trade policies, since the middle of the sass’s, have been geared to opening domestic industries to the global market. The rising level of foreign direct invest is a good indication of the increasing influence optics in Australia. In 2011, foreign direct investment (FED) inflow was $41. 3 billion while the gross domestic product ( P) was $914 5 billion meaning FED contributed 4.
GAP, a significant percentage. The impact of Tons can also be seen in terms of employment. In 1999, when BP Billion, an Australian multinational mining and petroleum company shut down its steel plant in Newcastle, they destroyed thousands of Jobs in the process. There has been considerable growth in the manufacturing sector, with annual growth in manufacturing exports from 1985 to 1995 standing at 12. 9%. As well as supplying goods and services, successful Tons in Australia bring in steady revenue and provide employment, both of which strengthen the economy.