One of the goals of the corporations is to make huge profits. This has made them buy of small businesses that they may not be able to control in terms of cost of products and labor. Thus, by buying off small businesses they are let as the only players in the field. To fuel their desire to make a lot profit, child labor and low wages have been associating features o... ... middle of paper ... ...ation of the social and environmental stability and this affects the lives of people negatively. Corporate power has made it possible for a few people to control social and environmental growth and stability.
The companies seek markets to do direct investment which it is relatively cheaper or has a low cost of production or operations. To remain competitive, it is important for companies to produce their goods and services at low cost. Globalization has permitted companies to set up their offices and production units in other countries that have abundant resources at low cost. A country’s financial climate is one of major fuel in the influencing of globalization. It can be a magnet which attracts investments, say for example China there is an abundance of cheap labour, vast technologies and the know how therefore persons/ countries will prefer to sent things to be manufactured here, thus will fuel china’s economy.
However, production is cheaper if they are made countries where regulations are less strict (Wood 25; Stephanie para 1). Despite the profits made from this technique, it can have some repercussions on the U.S. economy and the environment of nations occupying those factories (Marquis 39; Ahmed 192; Zhang 776). This springs a debate to whether more concern should be held for the outcry of Americans to bring jobs back to the U.S. (Ahmed 192; Stephanie para1) or to the freedoms of the businesses and their right to seek a profit (Salanţă 270). Both sides can agree that outsourcing can be desirable for a business do to the potential profit. It allows goods to be made cheaper, management to run smoother, and money to be made faster (Salanţă 270).
This is because of the fact the rich find ways to get what they want made to be produced at a cheaper price, thus increasing their profits on the product. Another downside is that some large corporations and companies can be exempt from paying taxes in some countries (Collins, 2015). The benefit of not being required to pay taxes goes back to the rich becoming richer. I personally think the biggest con in the globalization of the economy is that some countries that are undeveloped cannot afford to pay some prices that big corporations set on their goods. For instance, many of the people living in Japan have small family farms, and they do not want to compete with the large American agricultural giants who mass-produce their goods using machines rather than everything by hand (Wright, 2015).
Supporters of globalization have argued that it has the potential to make this world a better place to live in and solve some of the deep-seated problems like unemployment and poverty. They argue that it reduces barriers such as tariffs, value added taxes, subsidies, and other barriers between nations, thereby promoting global economic growth, creation of jobs, competitiveness amongst companies and lowers prices for consumers. Globalization, they further argued, also provides poor countries, through infusions of foreign capital and technology, with the chance to develop economically and by spreading prosperity, creates the conditions in which democracy and respect for human rights may flourish. According to supporters, globalization
One of the main arguments against globalization is that large corporations take advantage of poorer nations. Opponents argue that corporations take advantage of the labor force by giving them unfair working conditions as well as having a disregard for the environment (“Economist” 2001). While this may have been the case in the past most multinational corporations are working to clean up their practices in developing countries. Regardless of the way that the standard of living is measured, there is clear evidence that economies that adopt free trade policies outperform their counterparts that maintain protective trade barriers. This economic performance has lead to clear increases in the standard of living in these countries, providing clear examples that free trade can be used to help underdeveloped economies catch up to more developed nations.
This is inevitable and ultimately beneficial to all parties involved. A larger percentage of companies will buy from the domestic market, domestic firms will increase their own profits, and the consumer pays less. This is the other significant advantage of international trade; it indirectly causes the domestic market to become competitive with the foreign market. A company that attempts to lower its production costs through outsourcing will unintentionally be benefitting local firms in the future. Business will eventually return to the domestic market once it is beneficial for companies to do
This presents another causative factor that can have a negative impact on the global economy or the economy of other countries. For instance, many corporations number one priority is to gather a profit, the highest possible profit. The idea is the company must act in the interest of itself by making decisions using this foundation priority of accumulating wealth. As a result, they expand into countries with fewer standards to increase the profit. Countries with low labor wages, benefits, and standards represent huge profitability for corporations who take advantage.
In addition, it is crucial to understand the geographical context in which these MNCs were founded. This paper will analyze the development of the multinational corporation (MNC) from the 1870s to the modern day and examine it what ways, and to what degree it has changed over time. Mira Wilkins defines a multinational enterprise (MNE) as a “firm that extends itself over borders to do business outside its headquarters country.” By 1870, a period denoted as industrial capitalism, MNCs started to evolve and the nature... ... middle of paper ... ... (eds. ), Leviathans: Multinational Corporations and the New Global History, New York: Cambridge University Press.
Last modified January 20, 2015. https://www.linkedin.com/pulse/role-transnational-corporations-world-economy-krystsina-lapko. The Economist. "The Role of Multinational Corporations in Integrating the World’s Economies." The Economist. Last modified November 20, 1997. http://www.economist.com/node/106613.