Government And Business: Global Economies, Civil Societies (Research Paper Sample)

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Executive summary
This report elaborates how multinational corporations present a threat to the global economies, civil societies as well as the natural environment. The report paper presents the reader with detailed information on how international companies impact both host national economy and the global economies at large. It points out that despite the advantages which accrue to developing countries which attract foreign investors; MNCs stagger their economy since they tend to monopolize the production and utilize their power to force other organizations out of the industry. Furthermore, the report describes in depth the threats posed to the civil society by transitional corporations. The research revealed that marketing strategies and promotion techniques employed by powerful companies often result to unbecoming attributes among the community members of the host society. Apart from widening the gap between the third world nations and developed countries, MNCs are associated with negativities such as brain drain and undue influence to the native culture of the host nations. Besides, the report explains the influence of corporations on the natural environment where they run their business operations. The study found out that, the majority of the MNCs shift their commercial undertakings preferably to nations where rules regulating business operations and strictly advocating for corporate social responsibility are less austere. They purposely aim at thriving in environments where they will be able to exercise full political power significantly with limited control from the federal government. They, therefore, tend to evade incurring costs occurring from their negative externalities- which remain a responsibility of the affected society. This research was based on quality academic journal articles, books, and websites such Word Health Organizations and World Economic Forum. The study concluded that economic imperialism is threatening the global society in many ways since powerful multinational corporations, despite their advantages in the economy, are posing a significant threat to the worldwide economy, the environment as well as the civil societies.
Introduction
In the recent years, neoliberalism has turned out to be increasingly prominent as a form of administration in several nations around the globe (Hall, Peter and Michèle Lamont,63). Initially, the underlying foundations of neoliberalism were planted by a traditional political economy theory which advocated for business sectors (and in this manner people) to be entirely liberated from any governmental interference. The model advocated for the idea that global economies should be allowed to develop without obstruction by any administrative forces. Over decades, there has been a revitalization of economic neoliberalism on the global level as nations around the world now either opt or are compelled to participate in neoliberal governance. As a consequence of the developing hegemonic noticeable prominence of neoliberalism, there have been limitless changes at all levels in the global economy. As a result, multinational corporations have become exceedingly powerful and presenting a significant risk to the global economies, general social orders and the environment at large ( Idris-Soven, Ahamed, Elizabeth Idris-Soven, and Mary, Vaughan 9). Large organizations are an economical, environmental, and political and social constraint that is inevitable in the current globalized world. Transnational enterprises affect the lives of billions of individuals consistently, regularly in complex and imperceptible ways. The development of these companies is typically measured in financial terms – paybacks, resources, the number of employees, and stock costs. However, their effect expands well beyond the monetary domain. The production decisions made by global corporations have noteworthy environmental implications at the national and worldwide level. Enterprises exert political influence to obtain subsidies, decrease their taxation burdens, and shape the public policy. Company policies on employees working conditions, benefits and wage rates affect the living standards of millions of people around the globe. So me individuals perceive the power of global corporations as a constructive constraint, bringing commercial development, occupations, lower prices, and quality products to a growing share of the world’s population. Others see large firms as exploiting laborers, controlling the public policy process, destructing the natural environment, and corrupting cultural values. Certainly, global enterprises are an inevitable presence in the contemporary world and will remain so for the predictable future. The terms "global corporation," "multinational corporations" and "transnational corporation" used interchangeably will be defined in the proceeding section of the report.
How corporations present threat to the global economy
A multinational corporation (MNC) is a corporate enterprise that manages the production of commodities or conveys services in more than one country. An MNC varies slightly from a transnational corporation (TNC), on the grounds that while MNC's are generally national organizations with foreign subsidiaries, a TNC does not identify itself with a given national home (Baumüller, & Martin,38). However, these terms are applied interchangeably in this report paper. Multinational companies can have an intense impact on both local economies and even the global economy.
National and local governments regularly compete to attract MNC facilities, with the anticipation of improved tax revenues, job opportunities, and economic growth and development (Jensen,& Nathan,23). In order to compete favorably, responsible government entities may offer MNCs impetuses, for example, tax breaks, promises of direct governmental assistances or subsidized infrastructure, or lax environmental or workforce regulations. Other than holding the guarantee of financial development for local and national governments, multinational enterprises also exert power and control over political entities once they are set up, through their regulation over the intellectual and technical property (Heater, & Derek, 251 ). For instance, Adidas owns elite patents on shoe designs. Siemens A.G., on the other hand, holds many exclusive rights on equipment and infrastructure while Microsoft Company benefits from software patents. These exclusive rights granted to the multinational companies often allow them to exercise a monopoly in the global economy, preventing other small corporations from developing (Dachs, & Bernhard, 43). This phenomenon helps in keeping labor wage rates low which might be exploitative to the individuals working in these organizations. Reduced salary levels often contribute to low living standards of people compelling the federal government to accumulate kitty for the low-income earners; money which could have been diverted to a productive sector.
Multinational companies exert substantial influence over local and global governments, often compelling them to implement policies that favor their business operations, rather than improving the welfare and protecting rights of people. As a result, economic globalization in the form of multinational corporations can lead to the exploitation and mistreatment of individuals, funneling of vital assets of a country into foreign exports and hence overreliance of developing nations on the wealthy nations. According to the World Economic Forum, multinational companies should invest their capitals in the most productive sectors not where tax levied will be favorable (World Economic Forum, Par.1). In other words, powerful transnational corporations often contribute to the unequal distribution of resources among countries and as a result, drag economic development in the world.
Besides the uneven dissemination of wealth that is often associated with the powerful transnational corporations, it is also worth noting that resources are diverted from the home nations into foreign countries. For instance, some of the pieces of land in Cape Verde could be used to feed natives, but instead, it is planted and harvested with cash crops purposely meant for foreign exchange. Fresh products are commonly sold or converted into a nonperishable variety, like canned tuna for international export, instead of being consumed by the population. Prevalent malnutrition is another side effect of this excessive foreign dependency (Dachs, Bernhard, 214).
In a nutshell, economic globalization leads to unequal and unsatisfactory economic relations of overdependence of the developing nations in the developed countries (Kapstein, Ethan, 37). Instead of operating autonomously on behalf of the native citizens of the country, federal governments of developing countries seem to concentrate more on the benefits of MNCs and of other populations on whom they depend on for assistance. According to them without these procedures of economic connections, their home nations can seldom survive in this dynamic world. Thus dependent relations that were established on during the colonial era continue currently in the form of what majority of the scholars refer to as neoliberalism or economic imperialism. How corporations present threat to the civil society
Apart from increasing dependency ratio between developed and third world countries, powerful MNCs also pose problems for the host nations where they carry out their operations.
Multinational companies are commercial establishments, and their primary objectives are to achieve optimal returns on the capital invested, acquire huge market shares and safeguard their long-term competitiveness in the industry. This often contributes to the conflict of interests betwe...