Multinational companies and social responsibility in developing countries

¶ … investor friendly policy of the developing countries have provided the international companies to avail such opportunity and secure their gains. It is surprisingly to recall that multinational companies have recorded surging profits and rising expansion in their production and activities. Different factors are responsible for the upward trend of the multinational companies, most importantly, the companies have been provided with different incentives of minimum tax deduction, and low tax on the import of heavy duty machineries, along with the availability of cheap and skilled labors. The multinational companies have therefore scattered their production activities internationally, and have wide spread network of production units in different developing countries. The production activities are conducted to target and capture the shares in the market of developed countries. This sounds a strange phenomenon, the multinational companies at one hand are availing the suited policies and incentives of the developing countries, and on other hand, these companies are offering their services and goods to other part of the world. Such practices have been condemned by world social community, at every possible level. The several complains have been lodged, but majority of the multinational companies are not willing to abide by their moral and social responsibilities, for these companies the profit ratios are the only fascinating part of the business.

The ethics and moral demand just and fair attitude of the company towards the locality where it operates. It is true that the market of most of the developing companies is not encouraging, but it is the land of developing countries that offers many incentives important of all i.e. cheap labors. A multinational company operates in particular part of a third world country, it incorporates the services and expertise of the local population and furthermore it is provided with possible economic assistance by the local government, the multinational company operates, and produces in bulk on highly subsidized rates, and lately sell those good to the developed countries on high margin. The multinational company, during this exercise, ignores the contribution and services of the local population; it ignores and discourages their right of utility of the product that is being produced in their very own land, for international customers. The operations of multinational companies are therefore not much appreciated and welcomed by the social observers; these observers do not appreciate and support the cause of multinational companies. (William Marvin Hoad (1955). Third Small Business Case Book. Business Community Publishers).

SOCIAL RESPONSIBILITES ACCOMPLISHED by CERTAIN INTERNATIONAL COMPANIES

The local governments have therefore requested assurances from certain multinational companies to put in efforts along with the local government to improve the infrastructure of the local area, mainly within the proximity of the area where multinational company operates. In many of the case, different international companies including British Petroleum, OMV Petroleum, and Unilever are involved in the activities of supporting and assisting the local population in their quest of improving their living standard. British Petroleum operates in different poverty stricken countries like Africa, India and Pakistan. British Petroleum has successfully launched an educational campaign, the idea of which is to improve the literacy rate of that particular region, the company has put in the efforts without the support of the local governments, and therefore the policies of the company are appreciated and welcomed by the local population without any concern and opposition. Although British Petroleum has been reluctant to hire the services of the local population in their professional activities, for the simple reason because, the people of those areas are not capable and talented enough to handle and operate the advanced and hi-tech equipments, but the company has supported and improved the social and educational standards of the society and place where it operates.

Considering the case of Unilever, the consumer brand company is operating in different areas around the world, which lack economically and socially. The company has invested efforts and funds for the improvement of the social setup; the company has launched educational and healthcare campaigns in different areas. The company has further taken a bold step of introducing recorded number of employment opportunities for the local population, therefore the company has been supported by the local population at instances when the company's operation were facing criticism by the national governments of countries like Pakistan, India and African countries. (Ramananda Chatterjee (2001). The Modern Review. Princeton Hall)

Considering the example of Shell, the Dutch-based Oil production and marketing company has scattered its production and exploration operation through the world, either it is the developed part of the world, or least developed, the company has scattered its network internationally, with the vision to capture majority of market shares not just in the market of the developed country, but also in the market of the developing countries. Interestingly, the company has although not compromised over its level of profit, and has exploited the region of its operation through operation of its technical services, but irrespective of these facts, the company has contributed significantly towards the progress and development of the local infrastructure. The Shell Company has offered its services to those particular regions in the world, where never in the history, the particular government of that region or the non-governmental organizations reached. Apart from these social obligations that covers educational and healthcare sector, the company has also launched different learning campaigns that emphasize on entrepreneurship and leadership qualities of the local population. The company has launched such programs, where it encourages the individuals or groups to initiate their personal business, and if their business receives appreciation and recommendations from particular team of entrepreneurs, those individuals and groups are provided with certain economic assistance. (F. Neil Brady (1996). Ethical Universals in International Business. International Survey Publishers)

Many hotels and resort of international standard has invested their efforts for the better projection of the poor countries that are popular for their hostile activities. Considering the example of India, the Intercontinental Hotel chain was among the pioneers of those who promoted the soft image of India. The international company took the bold initiative to invest millions of dollars into the region, where its person fate hang in balance. Therefore, in this particular case, the service and contribution of the multinational resort chain is much more than social and ethical service i.e. national service. (Alvin Saunders Johnson (2002). Encyclopedia of the Social Sciences. Cambridge Publishers)

LEGISLATIVE SECURITY

The different organizations have documented several legislatures to control and monitor the record and affairs of the multinational companies, however such legislatures have not being fully intact, because the poor regions are afraid that their hard action towards the multinational companies will result in the shun of their operations and production activities, which will have irreparable impact on the economic activities of the poor countries. Therefore the international agencies have recommended certain laws and regulations which try to bridge both the parties, and avoid any tussle or clash of interest. According to the proposed laws, the countries and ruling authority should seek quarterly reports from the multinational companies for explaining their production activities, secondly the companies should be encouraged to invest funds towards the social and economic prosperity of the local population, and in exchange the ruling authority should offer the company with possible concession in terms of taxation or import duty. In different countries, including China, the hub of foreign investment, the country seek periodic reports from its investors about their operations, and offers maximum concession to those companies that have promised and provided economic prosperity to the local citizens. (Larry Kahaner (2003). Values, Prosperity, and the Talmud: Business Lessons from the Ancient Rabbis. Longman Publishers).