Another drawback of multinational corporations is that they unfairly target the markets within third world countries. Take Coca-Cola for example. They have invested one hundred and five years of advertising and marketing to make their product as well known as it is, but this is not just within the western world.8 Coca-Cola has more than three hundred different brands in over two hundred countries around the world.9 It goes without saying that they have taken advantage of the cheap unskilled labour that is abundant in many developing countries around the world. When a multinational corporation moves into one of these countries, it is only natural that they would try to sell their product within that country.
This wouldn’t seem so terrible until you take into consideration the fact that it is in these countries that people spend all of their money on the bare essentials. Advertising for these luxury products targets these people, commands a disproportionate share of the market, and decreases the quality of life because people are not able to afford necessities when they spend what little money they have on products like Coca-Cola.10 Even though the MNCs are providing much needed jobs in developing countries, they are also providing a destructive new market.
It is always promising to see multinational corporations making serious attempts at bettering themselves, and bettering the working conditions in their factories, establishing regulations prohibiting the use of forced labour and requiring the payment of minimum wage. Goodyear is one such corporation. Though they are nowhere close to perfect, they have made some moves in the right direction, and are committed to maintaining their positive image. In their list of values, they indicate that they value operating “globally as a socially responsible corporate citizen”11.
Through all of my research on multinational corporations, I have come to a rather inconclusive conclusion. There will always be benefits of having a multinational corporation operate in a developing country – both for the host country and the home country. To the same effect, there will also always be drawbacks for both nations involved. Rather than making blanket statements that label all MNCs as being good or bad, we need to look at each corporation and each circumstance individually, and assess the situation based on the facts.
1 “Multinational Corporations” Economics Department, Iowa State University, 16 Feb 2004 http://www.econ.iastate.edu/classes/econ355/choi/mnc.htm
2 “What is a Sweatshop?” UNITE Stop Sweatshops! Campaign 16 Feb 2004 Copyright (c) 2000, Union of Needletrades, Industrial and Textile Employees http://www.uniteunion.org/sweatshops/whatis/whatis.html
3 “Forced Labour Convention” (c) Copyright 1997 – 2002 Office of the United Nations High Commissioner for Human Rights, Geneva, Switzerland 16 Feb 2004 http://www.unhchr.ch/html/menu3/b/31.htm
4 “Unilever Today” Unilever.com (c) Copyright Unilever 2003 Feb 19 2004 http://www.unilever.com/company/unilevertoday/