International Codes and Multinational Business - Essay Example

Task Title Name Affiliation Date Multinational corporations also referred to as big businesses, governments, and civil society are the most powerful economic forces in the world. The world is becoming increasingly globalised, and institutions such as Multinational Corporation (MNCs) have integrated with developing countries in complex ways (Becker, 1964).Competition among companies, organizations, governments has led to capitalism and division of labour. These factors are crucial in attaining high economies os scales. At the moment, access to cheap labour is the most important factor for integrating within a company. In the textile industry, there is a serious need to advocate for responsible businesses and business conduct. Joint global action by governments, civil societies, and organizations is necessary to create responsible supply chain management, abolish child labour, protect the environment, and guarantee human rights (Grassby, 1970).With international production, trade and production are organized into global value chains; from there we need to find answers to our questions about globalization. The art of promoting ecological transitions, sustainable trade, and sustainable development is being practiced in both the developed and developing countries. In the rise of competitive strength of organizations, companies, civil societies, and governments working toward implementing improved working condition policies, international business can engage in positive practices and social and environmental progress . In the recent past, countries such as France and the Netherlands have been advocating for improved work initiatives that are already taking place in Bangladesh. This initiative was intended to improve social and labour conditions for textile employees, such as in Bangladesh. These efforts included improving labour inspections and safety training initiatives. These improvements are critical to ensure that business conditions are good and that no casualties occur. Behind governmental economic globalization, companies and civil societies act as motivational factors; politics, media, education, culture, and technology have roles to play as well. Global organizations such as the UN, World Bank, and International Monetary Fund (I.M.F) along with national governments and civil societies, obtain their power from the economy (Beamer, L., & Varner, I. I. 2008).This enables them to make influential decisions within their countries and at a global level. Taking on political issues, wars, and conflicts, nearly three-quarters of top business corporations in the world maintain government relations offices, often within a few blocks of the lobbying capital of the world especially the United States of America (U.S.A). These companies are obligated to maintain good global business conditions by ensuring improved labour policies. According to Beamer, L., & Varner, I. I. (2008), global business revolution has completely changed the way capitalist companies run the pattern in which the competition is carried out and the manner that the economy is run worldwide economy. This particular point of view goes against the ‘growing hollow’ ideology. Multinational companies are intensifying their power through mergers and acquisitions. The prime level of the supply chain has always been heavily labour-based, since production is primarily located in the most populated nations Employers in the textile industry receive a number of incentives to omit labour standard policies. Insufficient or inadequate regulatory frameworks on the labour standards within textile businesses, in both developed and developing countries have created opportunities for companies and civil organizations to act impulsively (Beamer, 2008).There is an unclear distinction between the issues of labour standards and labour practices. This article presents labour standards as deriving its regulations from both local and international mandates. At this point, labour standards are real labour practices on factory floors. The key question is whether governments, big companies, and civil society have the necessary power to improve labour standards in developing countries. The essay argues that the motives of profit-seeking entities for instance multinational companies and other companies are completely intertwined with labour standards and their practices. In addition, multinational corporations and foreign direct investments selectively flow, in a strategic manner, to a few fast growing, populated, developing countries .To the rest of the world, the ability of MNCs, governments, and civil societies are limited in their ability to put labour standards into effect. The mass production of consumer goods, such as apparel and footwear, in textile industries in developing countries requires intensive labour. Often, it is the main source of foreign exchange for those developing countries. It also clearly depicts a shift in competition from north-south to south-south. This reveals an alliance of many different interests groups in relation to labour standards (Beamer, 2008).The textile industry stands on the bottom rung of the economic ladder of many governments. According to Beamer, L., & Varner, I. I. (2008), Textile industries, controlled by multinational companies, are outsourcing their operations through local agents and sub-contractors in these developing countries. This allows governments and MNCs to maintain their bargaining power. By the same process, they are avoiding direct control over labour standards. During the first World Trade Organisation (W.T.O) conference in 1996, the EU and US strongly supported labour requirements and standards, which were enforced on the basis of human rights. The difficulty was that, in the regulations of the standards of working, it lacked an agenda for wages (Grassby, 1970).At the time, the Asian governments and companies started questioning Western governments on their motivations and resistance towards linking with labour standards in relation to prices of commodities and services, since such labour regulations could be used as non-tariff barriers to trade. During the conference, it was concluded that they should reject the use of labour standards, mainly for reasons of protection, and agree not to question the comparative advantages of governments in the low-wage developing governments (Beamer, 2008) As the discussion on incomplete labour standards continued to persist, the main question was how governments, organizations, and civil society understood decent working conditions, and its necessary evolution with social and economic developments. The question of the goal of economic development, as well as social and labour standards, still rise from time to time (Beamer, L., & Varner, I. I., 2008), Many developing countries’ governments do not have regulations to protect labour rights and practices. The limited accomplishment of the main labour regulations has significantly affected the core labour standard practices. Many governments and business institutions have introduced proper rules and regulations as a way of ensuring that they capture and achieve their objectives from the diverse interest groups involved in this discussion. Multinational companies are attracted to developing countries in a consistent way, through neoclassical economic theories (Beamer, L., & Varner, I. I. (2008) Many governments with an abundance of low-skill and unskilled labour have specialized in the production of textile goods hence using the part of endowment According to research on labour standards, global competition between labour-abundant countries, such as China, Indonesia, and India completely change the nature of the role of endowment. It puts pressure on the techniques of production and competitive improvements, to ensure that they remain competitive. At the same time, they are pushing down wages. Just as the requirements of labour go up, so do new businesses develop. When, during the course of economic expansion, the United States, Japan, and the South Korea developed their textile industries, other countries, including China, followed suit. The evolution of how businesses work demonstrates that the roles of governments, multinational companies, and civil society are heavily tasked to ensure appropriate working conditions in textile industries. Multinational companies are always interested in taking advantage of emerging markets, in both developing and developed countries (Breton, 1962)here is an ongoing debate concerning the effects of governments, MNCs, and civil society on developing countries, the textile industry, its workers and their labour standards. The north-south disparity in trade and the demand for low-skilled labour brings down the labour wages in the developing countries. Studies indicate that internal economic and political factors are the main factors that affect the wages of textile industry workers. Relating this to the primary forces of development for export promotion plans, labour supply gives governments and MNCs greater power to bargain over wages and other decisions. The integration of governments and companies into the global supply chain increases competition in textile industries that export their products; this has challenged the labour practices in the governments of developing countries. With the emergence of bureaucracy, Weber listed a number of preconditions (Wild, 1998).They included expansion of the complex administration and the presence of a monetary economy that requires a more effective administrative system, which determines how labour conditions need to change. Without this change, one of the most immediate effects is low wages in the developing nations that produce consumer goods in the textile industry. Governments and organization of developing countries are in a problematic situation, which comes in response to labour conditions, practices, and standards. According Karl Max, the textile industry has created over 42 million jobs in state supported East African Processing Zone (EPZs) in developing countries (Bachrach, 1970). The affiliates of the state supported bans on unionizations, thereby restricting the bargaining power of the workers and lowering their wages. This leads to a decrease in job security in the developing countries. Job losses in these countries will be high and mainly among skilled workers, including craftsmen, labourers, and operatives. This reduction is also affected by ineffective state labour regulations (Bachrach, 1970). Since governments, civil societies, and MNCs own almost all global capital, they have the power to change how businesses operate, especially how textile companies’ workers operate (Breton, 1962). Most MNCs and civil societies are located in wealthy nations; therefore, their respective governments should take care of mutual political, economic, and the cultural interests in this time of globalization. These economies are the main catalysts for the process of globalization; they maintain the highest stakes and require maximum profits. Taking into consideration Max Weber’s view of power and related stakeholders criticized by influential politicians, power is clearly a subject that requires much analysis. Michel Foucault’s theory on the mechanism of power states that the primary and most forceful examples of power arise by the efforts of very a strong willed person, the power of social contract, or any social institutions. To succeed in such a context, power should be manifested and used in the right way. One-dimensional views of power look at performance, the decision-making process, and key issues in the conflict; decision making is additionally a requirement. An observable conflict has to present itself to ascertain who holds the power (Gregory, 1984). The interests of different, conflicting parties are depicted as policy preferences, revealed through political participation. In the textile industry, it is clear that the performance of individuals within the industry will vary, depending on their position. Those with high employment rankings have more power and, in most cases, will undermine those in lower positions. As such, conflict will always arise. According to Weber’s theory on bureaucracy, rationalization provides a transition into society where traditional motivators, such as behaviour, values, and beliefs are taken over by rational calculations. Therefore, all businesses capable of determining business conduct will be responsible (Lukes, 2005). It is commonly referred to as a pluralist view or the pluralist approach. The pluralist approach is an attempt to study the specific outcomes of a situation and to determine who prevails in the decision-making process within the community (Lukes, 2005). The difficulty with the study is that one has to examine concrete and observable behaviours in community members. Studying and identifying who prevails in the community decision-making process is the most appropriate way of determining which individuals or groups of people have most power over social life (Davis, 1977). According to Lukes, (2005).the theory of power, the term ‘who governs’ is used to determine who makes decisions within a community. When there is a conflict between different parties in a community, many people or groups of individuals attempt to make the decisions and acquire the power to rule others. In the textile industry, employers are the primary decision makers, though conflicts may arise between the employers and the employees. In most cases, the employees can create unions so that they may better exercise their power (Wild, 1998). Employees can go on strike when they feel that they are not being treated well, power shifts to their side, and their employer will be forced to listen to them. In conclusion, the one-dimensional view of power focuses on deeds and producing decisions about critical issues surrounding a conflict of interest. The central point of this view is that when an extend where one person or a group of individuals either consciously or unconsciously makes or creates barriers for other to make public airing of policies with conflicts, then that person or group of individuals have power (Lukes, 2005). Although the two-dimensional view of power is applicable, it is inadequate in several ways. For instance, the insistence of non-decision making power can only exist when there are grievances, followed by an assumption that there is a genuine consensus about the issues (Gregory, 1984). However, with the three-dimensional view of power, there is strong criticism surrounding the focus on performance; it focuses on the decision-making process and control over a political agenda, which does not happen through decision making. Issues and potential issues are also taken into serious consideration. In this view, the decision makers are not just the power owners. In the textile industry, and the fight against the poor working conditions, we can relate to this by excluding those who control the expertise of the textile manufacturing process can be the one to hold on to power. The leadership of the textile industry is responsible for the working conditions of its employees (Kline, 1985). They should understand their responsibilities and fulfil them. Since they have the power, resources, and influence, they also have the potential to improve working conditions by making and sustaining better regulations. One must ensure that they reconcile human rights needs by making joint contributions towards establishing labour standard regulations; this would prevent or end many conflicts and power struggles. Conclusion In conclusion, businesses who conduct themselves responsibly can make the world a better place to live. The existing conflicts within businesses could be avoided if proper labour standards regulations existed within these businesses. It is clear that this is the responsibility of governments, civil societies, and especially, multinational companies. They should use all the resources at their disposal to ensure that they do not misuse low-wage labourers or ignore their employees while they are earning a profit. References Bachrach, P (1970). Power and poverty: Theory and practice. New York: Oxford University Press. Becker, G. S. (1964). Human capital. New York: Columbia University Press. Breton, A. (1962). The economics of nationalism. Journal of Political Economy, 72, 376-86. Beamer, L., & Varner, I. I. (2008). Intercultural communication in the global workplace. Boston: McGraw-Hill Irwin. Davis, K. (1977). The case for and against business assumption of social responsibilities. Managing Corporate Social Responsibility, 35-45. Grassby, R. (1970). English merchant capitalism in the late seventeenth century: The composition of business fortunes, 2.7-107. Gregory, D. (1984). Space, time and politics in social theory: An interview with Anthony Giddiness, 123-32. Lukes, S. (2005). A radical view. New York: Palgrave Macmillan. Kline, J. (1985). International codes and multinational business. Westport: Ct. Greenwood Press. Wild, A. (1998). A review of corporate citizenship and social initiatives. Bureau for Employers’ Activities Journal, 345-58. Read More