Multinational Companies tend to benefit and harm third world countries at the same time, obviously depending on the perspective you choose to make the analysis. I believe that depending on the industry the company is part of, the scale might be unbalanced. On the same manner, it also depends if these companies are exporting whole goods, materials, or providing a service to the country host country as well.
Let’s take the example of US firms that decide to switch their customer service to another country.
India is one of the main destinations for call centers, “While a typical wage earner earns 5,000 rupees a month, a call center employee takes in as much as 15,000 rupees (300 dollars).” (Walker, Forbes- 2013). In this case- Microsoft- opted to outsource their customer phone services to India were they offer a lower wage than they would in the US. In return, Microsoft offers training courses with partnership with DeVry University and Orion Edutech. Of course, the wage difference to what a typical employee in India earns is 3 times better in more favorable conditions.
Nike and the Child Labor incident in Bangladesh in the 1990’s is also a case to analyze. Even though the Nike Corporation had no direct blame on the use of child labor by the suppliers, they could have done some research on how it was possible they could get such ridiculous low prices. After all the issues that arose, this turned in a lesson not only for Nike but for other MNC’s. If the company is directly in charge of all of their supply chain they should make sure they suppliers stick to their mission, vision and values.
Regardless of the industry or what they are producing, it is essential that a company that is offshoring any kind of service not only respects the foreign and national laws but in a nutshell; comply with all human rights. Child labor is not acceptable and should not be regardless of the benefits (low labor costs) to MNC’s. I absolutely support outsourcing labor in third world companies that will bring higher wages to the host-country employees. It might also create lower priced products domestically. Say for example the fast-food industry that goes multinational offers job, new ways producing food and more effective ways of food production.
Multinational corporations should be always be held liable to health and safety standards since we are dealing with human lives. Sticking to human rights, like Auren van Heerden mentions in his TEDTalk:
“The private actors, companies and NGOs, are going to have to get together to face the major challenges we are going to face. Just look at pandemics — swine flu, bird flu, H1N1. Look at the health systems in so many countries. Do they have the resources to face up to a serious pandemic? No. Could the private sector and NGOs get together and marshal a response? Absolutely.”(van Heerden)
It should not only be an act of but taken as a responsibility that the companies are now also liable for environmental hazards and damages, health and safety requirements. Multinationals should act as they would in their native country and respect the land where they are benefiting from. Companies should invest in the host country health and safety programs since it is also a way to make sure they can actually count with the employee’s labor. It is not good enough that the companies offer labors, this is the kind of mentality that supported slavery for many years.
If is not fair when there are extensive labor hours, when the environment is damaged among other repercussions a MNC’s brings. These companies save millions of dollars by outsourcing, they would have to pay tremendous amounts of money in national training, insurance among other payments mandated by law in the United States. It is not only ethical but beneficial that these companies have educated, mentally and physically healthy workers in their natural environment that should be mutilated the least possible.
References
- Walker, Chris & Hartley, Morgan. The Culture Shock of India’s Call Center. Entrepreneurs. Forves. Dec 16, 2013. http://www.forbes.com/sites/morganhartley/2012/12/16/the-culture-shock-of-indias-callcenters/#170d7d2b3540
- Nisen, Max. “How Nike Solved its Sweatshop Problem”. Busines Insider. May 9, 2013. http://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5
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