Multinational Corporations and the Thirld World Impact

by Rhonda Corcoran

Learning for the 21st Century - Spring 2000

A WAOL course

INTRODUCTION REFERENCE PERIODICAL ARTICLES NON-PRINT
TOPIC ANALYSIS BOOKS INTERNET SOURCES REVIEW

"Any business arrangement that is not profitable to the other person will in the end prove unprofitable for you. The bargain that yields mutual satisfaction is the only one that is apt to be repeated." by B. C. Forbes

INTRODUCTION

Many countries in the developed world have corporations operating abroad in developing nations. The scope of this project is to discuss the impact that multinational corporations (MNC's) have on the developing countries they operate in. The project will focus on examples in the literature which best illustrate both the positive and negative impacts these corporations can have, and identify some of the organizations that have developed to regulate such profit making industries.


Topic Analysis

Academic Disciplines

LC Subject Headings

Keywords

Most Important Databases and Periodical Indexes


REFERENCE SOURCES

Organizations

Multinational Monitor

http://www.essential.org/monitor/monitor.html

Multinational Monitor is a watchdog website published under the auspices of Essential Information Inc., a non-profit organization founded by Ralph Nader in 1982. The Monitor is published in print format and is indexed and available through periodical databases such as EBSCOhost. The website itself offers little information about its goals or purpose. The main features of the site are access to back issues, a search feature to look for particular topics within Monitor articles, information about multilateral agreements on investments, and links to other useful web resources. Articles are signed and the author credentials are listed. While the articles in this periodical are available via other avenues, the website still contains enough unique information to make it a useful site to bookmark for anyone researching this topic.

Global Trade Watch

http://www.tradewatch.org/

Founded in 1993, this organization describes itself as dedicated to holding governments and corporations accountable in the new era of economic globalization. Developed out of Public Citizen, a group founded by Ralph Nader in 1972, GTW was instrumental in the peaceful demonstrations at WTO in Seattle in 1999.

Statistics

In 1995, total employee compensation for parent companies operating abroad was over $815 billion dollars. Employee compensation for their foreign affiliates totalled only $239 billion.
“U.S. Multinational Corporations Selected Characteristics: 1995.”  Statistical Abstract
     of the United States.  Washington:  GPO, 1998.  Table 908.

Articles in Reference Books

Graham, Edward M.  “Multinational Corporations.”  The McGraw Hill 
     Encyclopedia of Economics.  2nd ed.  New York:  McGraw Hill, 1994.

This brief, encyclopedic entry offers a precise overview of MNC’s. The article spends a great deal of space defining what is and isn’t an MNC. Space is also given to discussing why firms become multinational, and what social welfare consequences result from their operation.

Spar, Debora L.  “The Spotlight and the Bottom Line:  How Multinational 
     Corporations Export Human Rights.”  Annual Editions:  Economics.  Guilford, 
     CT:  Dushkin/McGraw Hill, 2000.

Annual Editions is a noted source for covering many different academic disciplines. The editors tend to revisit similar issues with each update, reporting the changes via selected articles that were published throughout the year in scholarly journals or popular press sources. The article cited here was originally published in the journal, Foreign Affairs in 1998. It names a number of U.S. companies found out for committing human rights violations via labor subcontractors in manufacturing plants abroad. The author cites increasing public awareness for creating an impetus for these companies to behave more responsibly to foreign factory workers.


BOOKS

Barnet, Richard J. and Ronald E. Mueller.  Global Reach:  The Power of the 
     Multinational Corporations.  New York: Simon, 1974.

Global Reach is a lengthy look at how the world economy came to be controlled by a comparatively small number of business enterprises. Chapters are devoted to identifing the "global managers," to understanding the impact of globalization on the underdeveloped world, and to showing the power that developing nations have to draw on. Final chapters look at how the U.S., American labor and the interests of the public have been impacted by the emerging global economy. Written twenty-six years ago, this work still appears to be a useful resource for anyone wanting a fuller understanding of multinational corporations and their influences at home and abroad. This book can be found in Peninsula College Library's general collection. It was located using the library's online catalog.

Korten, David C.  When Corporations Rule the World.  West Hartford, CT:  Kumarian 
     Press, 1995.

Korten's discussion of the place which corporations fill in the world's economy appears to be much more than an academic exercise. This discussion is a culmination of the author's last 30 years, first attending Stanford and Harvard business programs, and then living abroad in developing regions such as Asia, Latin America and Africa. His time abroad was spent assisting local communities in understanding the changing world economy and how to participate successfully in it. In the early '90's Korten and his wife returned to the U.S. to continue the discussion - this time directing it at Americans and the leaders of financial institutions. While this work is very grounded in fundamental economic theory, the author works through his own conservative viewpoints to express a need for the global powers to let money take a back seat to spiritual and community revitalization. This work should be considered a useful perspective for anyone seeking a current understanding of the role of modern corporations and the future of the global economy. This book was found in Peninsula College Library's general collection. It was located using the library's online catalog.


PERIODICAL ARTICLES

Miller, William H.  "A Force for Good."  Industry Week  19 April 1999:  8-11.  
     MasterFile EBSCOhost.  Peninsula College Library, Port Angeles, WA.  21 May 2000 
     <http://search.epnet.com/>.

The Global Environmental Management Initiative (GEMI), a report put out by a Washington non-profit group argues that MNC's do more good than the ill that most media reports relate. This brief article refers to the transfer of intellectual capital, safety quality and environmental health as indicators of that positive force. This report is worth seeking out for a fuller view of what is usually a one-sided perspective of international corporations.

Moser, Titus and Damian Miller.  “Multinational Corporations’ Impacts on the
     Environment and Communities in the Developing World: a Synthesis of the 
     Contemporary Debate.”  Greener Management International.  Autumn 97:  40-52.
     MasterFile EBSCOhost.  Peninsula College Library, Port Angeles, WA. 5 June 2000
     <http://search.epnet.com/>.

The literature supports the notion that discussing MNC’s and their potential to be negative or positive forces in the global economy is heated at best. In this article the authors successfully present ideas from a number of differing perspectives on the role MNC’s play. Central to the discussion is the role of MNC’s in the sustainable development of less developed countries (LDC’s). Moser and Miller conclude by offering possible solutions to improve corporate social responsiveness via internal and external actions.

Prahalad, C. K.  "The End of Corporate Imperialism."  Harvard Business Review Jul/Aug 
     1998: 68-79.  MasterFile EBSCOhost.  Peninsula College Library, Port Angeles, WA. 21 May 2000 
     <http://search.epnet.com/>.

An interesting turn on the usual discussion of how MNC's impact the local economies and cultures of their host countries, this article predicts that MNC's themselves face many transforming influences. At the heart of this article is the notion that an emerging middle class in developing economies is forcing MNC's to rethink how they conduct business abroad.


INTERNET SOURCES

Multinational Monitor.  Essential Information, Inc.  5 June 2000 
     <http://www.essential.org/monitor/monitor.html>.     

Multinational Monitor is a watchdog website published under the auspices of Essential Information Inc., a non-profit organization founded by Ralph Nader in 1982. The Monitor is published in print format and is indexed and available through periodical databases such as EBSCOhost. The website itself offers little information about its goals or purpose. The main features of the site are access to back issues, a search feature to look for particular topics within Monitor articles, information about multilateral agreements on investments, and links to other useful web resources. Articles are signed and the author credentials are listed. While the articles in this periodical are available through other avenues, the website still contains enough unique information to make it a useful site to bookmark for anyone researching this topic.

Global Trade Watch.  Public Citizen.  16 May 2000
     <http://www.tradewatch.org/>.

Founded in 1993, this organization describes itself as dedicated to holding governments and corporations accountable in the new era of economic globalization. Developed out of Public Citizen, a group founded by Ralph Nader in 1972, GTW was instrumental in the peaceful demonstrations at WTO in Seattle in 1999.


NON-PRINT

Brave New World:  Global Capitalism and the Moral Imperative.  Prod. Michael W. 
     Doyle.  Videocassette.  Films for the Humanities, 1998.

This brief exploration highlights developments in the globalization of economics. In particular, attention is devoted to the treatment and conditions of populations in developing countries.


REVIEW of my Research Process

I began my research using terms I was already familiar with from earlier reading - multinational corporations, underdeveloped countries, corrupt behavior. I also used the Library of Congress subject heading, international business enterprises, coupled with other keywords in most of my initial searches. I found that the LC subject headings worked best in the online catalogs that I used (Peninsula College's Voyager system, Lasercat, and the North Olympic Library System). When I searched in the online databases for periodical articles I had more success and better results identifying the controlled vocabulary terms that are used by the database indexers. For example EBSCOhost uses the term international business enterprises instead of multinational corporations or transnational corporations. EBSCO also uses developing countries as part of its controlled vocabulary rather than less developed countries. ProQuest uses multinational corporations rather than international business enterprises. Ethnic Newswatch had a feature for identifying subject terms, but the times I used the database I had problems with the system locking up.

With web searches I found that my best strategy was to use all of the terms I had discovered, and organize complex strategies (if the search engine supported this), or conduct multiple searches with these various terms. With some searches I found that the information didn't really speak to my topic specifically. I added keywords such as impact and conduct to provide a better focus. I truncated my terms whenever possible. While many of the search engines I used were useful for locating information, I feel I had the most success with Google and the meta search engine, Dogpile.

My initial research strategy unfolded slowly. I looked for a couple articles in the periodical databases to give me background to my topic, and to help me identify a few other keywords that would help further my research. Class exercises helped me to identify Library of Congress subject headings and Library of Congress call numbers. I used the subject headings to search in three different online catalogs, and I browsed the college reference collection using the LC call numbers. The reference books provided me with some useful background information to my topic such as definitions of multinational organizations and descriptions of other non-governmental organizations that regulate international activity. The books I located by using the online catalog were lengthier works usually written by one or two authors from own perspective. I browsed the general shelves and located six or seven useful titles.

Quite a lot of the information I found via websites was not surprisingly very biased against MNCs. Although based on what appeared to be valid data, many of the sites made little or no attempt to offer a balanced view in their descriptions of multinational corporations. Very often they were self-described watchdogs of international corporate activity. It is wonderful that the Internet provides a voice for such organizations to make their information and message available to a wider audience. Serious researchers however should be cautious of stopping too soon in their quest for an accurate picture of whatever topic they may be exploring.

After reviewing the literature that is available in print and via electronic sources, I feel that I have a much better picture of the role that multinational corporations play in the global economy. The literature strongly indicates that MNCs do engage in practices that threaten the environment, treat poorly the foreign workers employed in their factories, and offer little to no assistance for developing sustainable economies in their host countries. What is clearer to me now is the activity of regulating bodies to monitor MNCs and to hold them to human rights standards and other standards of positive behavior. It is also clearer to me that these regulating bodies and non-governmental organizations (NGOs) are having their own positive impact on MNCs to do a better job at operating responsibly.


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