Businesses that operate in the global markets have several obligations to societies in their host country. It is vital for outside pressure to be applied to hold them accountable for their irresponsible actions. This essay will discuss some of the corporate social responsibilities of businesses operating in the global market.
Businesses operating in the global market have the obligation to ensure that labour exploitation and child labour does not occur in sub companies within their branches. In reality, most of the companies set up in the least developed companies exploit the cheap labour resources. They also prefer the underdeveloped countries in order to obtain high profits as they pay lower taxes compared to the branches in developed countries. States like Indonesia are developing fast due to the presence of these companies. However, their workers become devastated due to living in poor conditions as a consequence of low wage payment. A study carried out in 2001 found that most companies set up in Indonesia paid 33% more for the blue collar workers. Workers in the white collar jobs got paid 77% more money than those doing similar local jobs. Moreover, the foreign workers got paid a higher salary than local workers. As a result, this translated to the inequality in terms of income earned, thus increasing the gap between the rich and the poor.
Robinson (1999) asserts that Asia is the leading country when it comes to child labour abuse. Asia has a rate of 61% in relation to child labour abuse while Africa has about 32%. Poverty is the main cause of child labour accompanied by the lack of jobs or limited proper jobs for the parents of these children. Some of these families are too poor to take their children to school Most of the developing countries depend on jobs provided by these companies. With this in mind, the businesses can easily influence government officials to have easy access to cheap labour. The companies also interfere with workers’ rights. Countries, which do not have high labour standards, allow its workers to be infringed upon by the businesses. This is because the companies implement their management styles and affect labour regulations for their host countries, which significantly affects the workers involved.
Alan (2012) argues that in the London 2012 Olympic Games, the Adidas Company spent over £100 million to get the position of being the official sportswear of the games. At the same time, workers who made the clothes could not afford their basic needs due to low wage payment. The authorities of this country did not even respond to the needs of its people. Due to poverty and lack of alternatives, some workers continued with the job. Some workers had to skip meals in order to save money. Moreover, some employees would even pass out due to exhaustion. The workers had to work overtime in order to meet the production targets set by their managers, who were mostly expatriates. The workers had to ask for permission every time before going to the washrooms. Additionally, the employees experienced various forms of verbal abused. Some of them would be slapped or have shoes thrown at them if they disobeyed the managers. Those, who disobeyed the managers, would be transferred or dismissed immediately, despite repeated pledges from workers and campaigners to improve the working conditions of labourers. Workers who participated in unions also got dismissed.
Thus, companies such as Adidas, have an obligation to society with reference to labour. Many developing countries have tried to appeal to these companies to obey international labour regulations but their plea fall in deaf ears. The Adidas Company has a social responsibility to ensure workers’ basic dignity can be maintained through ensuring humane working conditions.
Businesses operating in the global market should preserve the natural resources of host countries, especially in developing countries. This is because they exploit the resources of a country unsustainably. The massive extraction of resources leads to economic loss. The unreasonable extraction of natural resources, such as excessive cutting of trees, leads to environmental degradation in the form of erosion of the top fertile soil, deforestation, pollution of water and desertification. This results to the degradation of soil fertility that is essential for production of food.
In the Niger Delta, there is a group of indigenous people known as the Ogoni. The Ogoni people have protested against the Shell Company and the government of Nigeria against land degradation in Ogoni land over the years. The Nobel Peace Prize nominee Ken Saro-Wiwa got executed among eight other activists for protesting against the Shell Company. The oil industry in Nigeria generates ninety per cent of the foreign export earnings. Shell Company generates half of this production. Nigerian oil accounts for 80% of the country’s annual revenue (Tonks and Dowling 2006). This means that, since the Nigerian people are highly reliant on oil controlled by Shell, the Company has a responsibility to preserve the country’s natural resources.
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Businesses operating in the global market should be concerned with the health and concern of the consumers of their products. Mike (2008) argues that in developing countries, wastes obtained from industries highly pollute water sources to non-consumable levels. Infants in such areas are mostly fed with baby milk substitutes. The milk substitutes are at times mixed with the polluted water. Most parents are too poor to afford clean water and cannot even afford to boil the available water. Thus, such infants are more likely to die from diarrhoea compared to infants fed with breast milk. In some cases, it is the milk substitutes themselves that are harmful. In India, there are occasions when Nestle promoted the mother’s milk substitutes. Some of the mothers, who were unable to read the labels of products written in English, gave their babies the milk substitutes. The milk substitutes led to malnutrition and in some cases death, even where proper hygiene was observed.
When discussing the health issues, some companies manufacture products that are not compatible with ecological sustainability and do not aim at reducing poverty. Some pharmaceuticals businesses produce medicines that are harmful to humans, and yet they market these products. A company like Sterling Winthrop from the U.S. sells dipyrone, which is an illegal medication. They sell the medication in twenty three countries, of which twenty are in the developing states category. The company usually markets the product using Conmel 1 as the brand name, yet the drug has serious side effects when consumed (Kymlicka 2006). In my opinion, these companies have another societal obligation to maintain public health of its consumers.
Businesses operating in the global market have the obligation to control subliminal messages. Subliminal messages influence buyers in developing countries where they are applied. The human mind has different levels of consciousness. The subconscious level is responsible for logic and reasoning abilities. The subconscious level cannot distinguish the material in what is false and what is real. Messages brought to the brain subconsciously can enable the mind to bring it to reality. Cunning companies take advantage of such situations and control the mind of people through advertisements and commercials. Most of the subliminal messages are in the form of brief audio or visual messages that the brain can register.
The Coca-Cola Company is famous for using subliminal messages in developing countries. The Coca-Cola Company is under scrutiny for using too much water that it has led to water shortage in a country like India. A factory in India state of Kerala got closed due to the contamination of water by the activities of the Company. The company is claimed to have put thousands of farmers into poverty due to the Company contaminating the water in their wells. The Coca-Cola also contaminated water in the river, which in turn poisoned land adjacent to rivers. The effects that the Coca-Cola Company had on the Kerala area are severe. At one point, the village council that permitted the company to work there demanded its closure. In the past villagers, who did farming in the area made a lot of profits. However, after pollution of the water, they became fully reliant on water trucks that supply water on a daily basis to fulfill their basic water needs. There have been a number of similar reported cases in India and Latin America due to the effects of the company on the environment. Similar cases of exploitation of workers’ rights and waters resources exhaustion have been reported. The case of Coca-Cola failing to adhere to its obligations is one of the worst in developing countries.
Dylan (2012) states that the company is brave enough to sell contaminated sludge in various forms sometimes in the form of a giveaway. However, sometimes they damp the remnants in river beds. The sludge contains high lead and cadmium levels. Lead is seriously harmful for children since it affects their nervous system. On the other hand, if cadmium is absorbed by plants and then consumed by people, it affects the functioning of the liver and kidney organs, and in some cases it leads to cancer. Accordingly, businesses operating in the global market ought to protect the health and safety of consumers of its goods.
Businesses operating in the global market have the obligation to control capital intensive technology in the host country. In Nigeria, these companies have obstructed local technological innovation. The businesses apply capital-intensive technology that leads to unemployment. Olufemi (2008) states that even before the arrival of foreign companies in Nigeria, there were different types of technology in the country. Instead of the foreign companies developing the existing technologies, they have over the years introduced advanced machinery that is most suitable for them, but have minimal benefit to the host country. Governance systems limit this issue. The companies also restrict licenses that prevent the Nigerian population from copying and internalizing the advanced technologies even when they have the capacity to do so. Thus, Nigeria, like many other developing countries, is forced to depend on this form of development, which has devastating negative effects on the economy. The technologies can be so complicated, such that whenever there is any technological breakdown, the companies bring experts from abroad. Such industries include oil companies like Shell. In my view, the Shell Company should develop existing local technology if it aimed at supporting the invention of local people and improving their lifestyle.
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Businesses operating in the global market should demonstrate social responsibility. This is in order for businesses to address issues brought about by the presence of foreign companies in host countries. Outside pressure should be applied to the foreign companies in the form of ensuring corporate social responsibility. Corporate social responsibility ensures that businesses are held accountable for their actions. Businesses should take responsibility for externalities brought about by the presence of their behaviour in the market. With the adoption of corporate social responsibility, the code of conduct between employees and organisation can be regulated. In order for the corporate social responsibility to be effective, the private companies should work jointly with the government to develop new business models and governance systems. Business will in turn benefit since they will be able to retain new customers and enjoy tenure of employees. This is possible because customers prefer to deal with companies that treat their workers well compared to the companies, which exploit their employees.
Employees are any company’s most valued asset. Therefore, businesses operating in the global market should be obliged to comply with corporate social responsibilities if they aim to improve their business reputation. This means that MNC’s should ensure that they offer ethical working conditions, clear hiring practices and non-discriminatory work stations. This improves the morale of the employees and their approach to work. With motivated employees, the company can enhance business relationship and improve business reputation.
Corporate social responsibility enables companies to think beyond ethics and consider the advantages of active involvement in the social welfare of host communities. In order to have a competitive advantage, companies should ensure that they build long-term relationships with clients through ensuring that they are responsible. They must also be involved in giving back to the communities. One such company involved in philanthropy is Bill and Melinda Gates Foundation. The foundation offers aid for education of talented and perspective people, who cannot afford a degree. This way the less privileged people in the society have an equal opportunity to learn. The Foundation mostly sponsors the poor people in developing countries, since they are the most affected by the lack of education funds. The governments of such countries are too poor to give full education funds, and this is where the grants from Bill and Melinda Gates become useful.
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The world has become a connected global village. Thus, the use of the Internet has become an essential aspect. With sponsorship of computers from the foundation, schools can now access the Internet and connect with the rest of the world. Through the availability of sponsored computers, countries have the potential to improve since the ideas and information can be easily shared. Work can also be done faster, and solutions for global problems can be easily shared.
The Foundation also funds agricultural activities. The economies of developing countries rely on agriculture as the central source of annual revenue. Thus, with funds from the organisation, these countries are able to develop their economies. The funds from Bill and Melinda Gates Foundation help agricultural organisations to practice sustainable agriculture. The organisation encourages women to be involved in farming since women and children are the most affected when it comes to poor economies. Also, with an increased number of single parent women, the foundation encourages them to go into farming since most young people in developing countries shun agriculture, yet it has vast potential if well tapped. With the availability of such funds, small agricultural organisations are able to sponsor scholarships in agricultural courses, thus improving the mental and intellectual capacity of the recipient of the fund.
The Foundation also sponsors polio vaccines in Africa, since the disease is still an immense issue in the mentioned continent. HIV/AIDS is also highly prevalent in Africa. The Bill and Melinda Gates Foundation offer a sign of relief to poor African countries since it gives out funds to address the issue. The funds are to be used to sponsor the acquirement of Anti Retro Viral drugs commonly known as ARV’s (Wiig and Kolstad 2010).
In my opinion, it is a necessary step to have a vibrant justice movement. This will ensure that businesses operating in the global market adhere to society obligations in host countries. In order to develop host societies, various forms of interventions can be used. Intervention can include the grassroots level, where if consumer movement requirements are managed well, the businesses will be able to deal with income inequality. Businesses operating in the global market should be encouraged to ensure that they invest in the host societies. The companies can also contribute part of their gains to the social sector in areas such as education and healthcare.
Government legislation by host countries can reduce the tendency of exploiting the low income groups. In my view, businesses operating in the global market should promote better-paying jobs to ensure people get the basic requirements. They should also revise and implement their roles in providing social obligations. This step can be put into place at the government level. At the global level, businesses operating in the global market should work with the relevant agencies in order to ensure the companies operate effectively in the global market.
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In conclusion, businesses operating in the global market should be more responsible in addition to adhering to laws of the host country. The businesses should voluntarily integrate social matters in the way they conduct their business operations. A lot of businesses operating in the global markets neglect their social responsibilities. Thus, outside pressure should be applied to hold them accountable for their actions. The companies should also impart humane working conditions irrespective of where the worker is situated.