political, social, and economic impacts as accelerated by the MNCs
Today, more and more multinational corporations are expanding their operations globally, with their objectives extended beyond not only on profitability but also economic, political, and social factors. Notability the implementation of MNCs has social, political, and economic impacts on both host and home countries. The differing impacts are gauged by the defining operations policies, business environment including the market nature and the stability level of the host country. However, the resulting political, social, and economic impacts as accelerated by the MNCs may positively or negatively affect countries.
Economically, MNC has enhanced the advancement of technology in the host countries thus boosting the productivity of the local economies. Notably, most of the MNC originate from developed countries that are technologically and economically doing well. With advanced machines and systems in their operations, MNCs, implement these technologies in the developing countries. Traditional mechanisms of operation practiced by most of the countries hosting MNCs are expensive and unproductive. For instance, Northern Thailand uses anomaly traditional production methods after rejecting MNC’s implementation thus less developed than Southern Thailand which has adopted production technologies from MNCs. Therefore, with MNCs implementation of productive methodologies in local economies, production is enhanced, hence economic growth and development.
MNCs have economically impacted positively to the developing countries through employment generation. Through job creation, residents of the host country can access common needs such as education and health facilities and invest that boom the economic performance. For instance, DaimlerChrysler in Brazil has generated employment that has engaged many unemployed Brazilians. Additionally, job creation has resulted in improved living standards through the introduction of new products, better education reforms, and affordance to modern technology. With the Employees acquiring new skills from the MNCs, local companies engage such personnel to implement the skills in their operations. The spread of this innovation in various industries and companies gradually improves the production standard of the host country. Hence, job creation by MNC has a significant impact on the economic well-being of the host country.
MNCs have gradually negatively imposed inequality amongst the host countries globally. Despite their primary role being the reduction of global economic inequality, MNC has been operating and implementing policies that don’t correspond to their primary economic role in the host countries. For instance, MNC survey conducted to assess their effect on income quality between the years 1980-2008 across Europe, showed the income inequality contribution instead. Additionally, MNCs has been injecting low skilled labor in developing countries. MNCs sacred the high skilled positions for foreigners thus supporting inequality through acquiring and implementation skills between countries. Comparably, the income payable to the low skilled laborer is far low as rationed with MNCs profits. Therefore, the MNCs have put the economies of the developing countries in a severe state due to the vigorous introduction of low skilled labors.
Tax evasion amongst the MNCs has severely affected the economies of the host countries. With tax evasion, there is no balance in the use of resources by MNCs and the revenue they contribute to maintain or renew the resources. The notorious MNCs in evasion of taxes include Apple, Amazon, and Google which for long have been harassing economies of developing companies. These companies use techniques such as complex tax rules to create loopholes and bargaining for the reduction of the constituted taxes. Since the evaded that could have been used to improve infrastructures and create a better business environment, the host countries operate in undesirable market conditions. With poor infrastructures and unstable market conditions, investors avoid investing in these countries due to the probability of high-risk occurrences. Hence, Tax evasion by the MNCs may economically diminish the developing nations.
Politically, MNCs contributes to the strengthening of the relationship between countries globally. For MNCs to be implemented in the host country, they must adhere to the policies anchored by the government. However, the recent alteration of the policies is dependent on the host country and the origin of country political relations. For instant, the advanced relationship between the East African countries and China, has been resulted in the acceptance of East African counties to implement friendly policies to Chinese MNCs. Through these relations, other reforms such as low-interest loans have been witnessed. Additionally, MNCs working with the government on the major project has attracted political attention. US-Japan has developed nations which have strengthened their relationships as triggered by MNCs working on space projects. Therefore, nations may develop a stronger relation accelerated by MNCs operations.
Notably, MNCs have been at the forefront in contributing to economic boom amongst many developing countries that are consequently gaining political stability. With a high employment rate, constant revenue flow, and productivity in the economy, countries are making a balanced political decision that is desirable for the residents and foreigners. Decades ago, most of the developing economies were unable to accumulate the rising population in the then present employment opportunities. This resulted in political temperate as the ruling parties were blamed by the opposition parties for the high unemployment rate. However, with the implementation of MNCs, employment and high-end product have been achieved resulting in political stability amongst the ruling bodies.
Hence the economic stability brought in by the MNCs has a concurrent positive impact on the political stability of various nations.
To gain favor through friendly policies in the host country, the MNCs use a technique of contributing campaign donations to particular parties and candidates. Such a leader who received donations tends to address the demand of the corresponding MNCs without legal procedures. Although this is not ethical to business conduct, instances of campaign contributions by MNCs have been witnessed. For instant, surveys show that campaign contribution that entails lobbying distributes more funds to candidates and political parties than the campaign contribution from the committees. In doing so, the MNCs work with political committees and industries association that will compensate through addressing the challenges that may hinder MNCs from profitable operations.
Additionally, the campaign donations from the MNCs take the role of bribing officials for successful tax evasion. The unfortunate move negatively affects other MNCs which might have not contributed to such political leaders. Unfriendly policies and elimination of some MNCs may result from poorly procedure policies implemented as triggered by sovereign MNCs. Hence, campaign donations by MNCs can lead to implications in the fair address of international trade issues and the implementation of policies.
MNCs get involved in political domains by representing their political views to exert pressure on the host country. Most of the MNCs have taken control of most of the developing economies. Through the contribution of high revenue and employment generation, the MNC is gaining the power of consultation by political bodies.
Notably, the MNCs are exerting pressure through the presentation of political views that support their operation and political desires of the origin country. For instance, US MNCs such as Google Cooperation may threaten developing economies to implement vast use of Google supported platforms or they withdraw their services. In other circumstances, MNCs such as Huawei’s implementation of a 5G network in the US may be discriminated as a result of pressure from the major MNCs in the country. Therefore, political implications may rise triggered by pressure from MNCs while demanding certain interests from political bodies and political leaders.
MNCs have been the vanguard against the thriving gender inequality in the developing countries. Through the implementation of investment, the MNCs are considering hiring women in higher positions as a way of delivering social-cultural intervention by reducing the inequality gap. Notably, most of the governmental and local companies consider employing men in various high organizational positions. The practice has left a huge income gap between the two genders. To reduce inequality and empower women, foreign direct investors are objectively investing in the gender inequality affected country to target skilled unemployed women. To optimally engage women in employment, MNCs have innovated technology that supports the workforce and also equip women with the required skills.
Healthy service is a crucial social sector in the livelihood of many people in different countries. However, the serves are not efficiently derived due to factors such as economic status, technology level, and scarcity of resources in many developing economies. To cub the challenge and enhance efficiency in the delivery of health services, MNCs partakers role in their host countries. Notably, the engagement of the MNCs by bringing healthy services and technology from their home country, which were initially accessible by traveling abroad. Additionally, MNCs have been at the forefront in collaboration with the local medical school to upgrade the curricula; and engage the skills and knowledge through direct spillover. Consequently, the trained students apply their professionalism in the domestic healthy facilities thus improving the quality of services. Hence, the MNCs role in the development and improvement of domestic healthy facilities has positively impacted the social lives of the residents of host countries.
Today, e-waste is the major environmental pollution in many countries. Comparably, most of the other type of waste is recycled to manufacture various products, whereas the e-waste has rare instances of recycling.
For instance, in the US only 11 to 14 percent of the e-waste undergo recycle, while the rest is disposed of causing toxicity to the population, thus healthy issues. In developing economies, MNCs bare the major channels of the electronic products with less live span thus disposal rate keeps rising. Despite the existence of international policies to debar the e-waste by encouraging recycles, MNCs has occasionally failed to adhere to the policies. Frequent importation of the disposed of electronic products by MNCs from their home countries is the major source of e- wastes in the developing economies. Therefore with low technology and recycling capabilities, developing counties are affecting the social life of their residents through pollution sourced by the notorious MNCs.
Occasionally, MNCs investors have failed to deliver social responsibility to the communities surrounding their investments as required by the policies abiding them. Notably, the corporate social responsibilities are abandoned by MNCs operating in oil refineries. For instance, oil corporations operating in Nigeria have led to the displacement of many residents to pave ways for roads heading to corporations thus failing to adhere to cooperate social responsibility. Additionally few of the corporations are taking the role of social responsibilities only to the communities closest to their investments. The discrimination of other surrounding communities has resulted in inter-community conflicts. Therefore failure by the MNCs to deliver the social responsibilities has gradually affected the social lives of the host community residents.