The impact of multinational enterprises
The United States is the country of origin for the largest amounts of licensing and foreign investment direct. Therefore, its policies understandably arouse some of the main unions of those moments outwards. One of these critics is organized labor, which holds that foreign production often displaces what would be the U.S. production. For example, large corporations have been criticized because they decided to move Part or all of their production to cheaper countries like Mexico, the NAFTA agreement. The unions also cite many examples of advanced technology which has been at least partially developed through government contracts and then transferred abroad. An example is the transfer of aerospace technology Boeing China to produce aircraft parts. According to the unions, if Boeing does not transfer technology to China buys products in the United States, increasing employment U.S. and production.
Closely related to the issue of job losses is whether the outsourcing of production placing a downward pressure on wages in the country. Moreover, there is anecdotal evidence that does. For example, computer programmers in the UK, for three to six times monthly salary of programmers in India. So the possibility of moving more work to India has caused a recent drag on real wages of programmers United Kingdom. Moreover, there is evidence that moves by companies to low wage countries increase the overall home country demand and wages of skilled labor. This is because the savings in production costs abroad increases the demand for goods produced abroad, such as Nike shoes, thus increasing the need Nike to hire additional management personnel in the United States.
Moreover, given the size of many multinational corporations (MNCs), there is much concern by the unions that will undermine through political means the sovereignty of nation states. The major concern is that a multinational company used as an instrument of foreign policy of his country of origin of the government. The fact that companies depend primarily on their home countries is illustrated by the finding that of the 100 largest companies in the Fortune 500, only 18 have most of their assets outside their country of origin and very few have abroad in its Executive Council. These companies are more internationalized in terms of sales, however, less than half of generating more than half of its sales outside their home markets. Because the home countries of most multinational companies are the industry, it is understandable that this concern is taken more seriously in the least developed countries (LDCs). But not limited to them.
Two other sovereignty issues arise less frequently. One is that the multinational can be independent of both the home and host countries, which is difficult for any country to take measures that are considered in their best interests. The second is that the multinational corporation could become so dependent on international operations which the host can be used as an instrument of foreign policy against their country of origin or another country. Under this sphere of influence, the unions have control of trade through the application of trade restrictions, antitrust laws, and key control measures in the sector, or even by forming state-owned enterprises. For example, much has been said about the government's attempt U.S. to apply their trade with the enemy to foreign subsidiaries of U.S. companies in order to prevent the sale to certain hostile countries. These measures, which restrict free trade and increase the threat of reduced profits, multinationals drive or to accept the new roles of the global game or most cases to oppose it.
About the Author
Jonathon Hardcastle writes articles on many topics including Investing, Business, and Employment
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