Obligations Of Multinational Corporations When Operating In Third World Countries

1009 words - 4 pages

Moral challenges for business in the United States are difficult enough when you consider the balancing profit interests against the needs of consumers, employees, governments and special interest groups. Multinational corporations mainly refer to large corporations based in Western Europe, North America, and Japan who operate manufacturing and other business facilities in underdeveloped countries.These large global companies exert enormous economic, technological, political, environmental, and cultural power around the world. The manufacturing company with the largest assets in the year 1994 was General Motors with $198.5 billion in total assets.This figure is larger than the gross domestic product of all but a dozen or so countries of the world. The problems arise when these corporations begin to take advantage of the lax moral expectations of these lesser developed countries. Multinational Corporations are often accused of exploiting resources and taking advantage of labor forces in lesser developed countries. Chemical industries take advantage of lax safety regulations, which can result in a disaster. Mining companies exploit the wealth of the country for a few rich land owners. Financial institutions rarely hire local people, yet they benefit by bringing in local money. Agriculture businesses use the best land to grow crops for export, which reduces the amount of land the locals can use to grow their own crops. The manufacturing and service industries have introduced poverty to many areas by paying wages that don't even meet a persons "basic needs".
In 1996 talk show host Kathie Lee Gifford was accused of promoting the use of sweatshops in Honduras with a clothing line she endorsed sold by Wal-Mart. Charges that Gifford supported the abuse of foreign workers led to tearful denials on her television program. She said she had no idea her clothing line was made by sweatshop workers in Honduras. Her Husband Frank Gifford, was seen handing out cash to workers in New York City's garment district. The handouts were meant to show Gifford's concern and compassion for textile workers around the world. Gifford was given a promise by Wal-Mart that they would hire human rights monitors at the factories in Honduras. Did conditions get better? According to the National Labor Committee, Wal-Marts Solution was to close the factory in Honduras and move it to Nicaragua. A investigative report by the Cleveland Free Times discovered that Wal-Mart, J.C. Penney and Kmart operating in Nicaragua, were paying workers a base wage of 15 cents an hour, compared to the rate of 31 cents an hour the workers received in the plant in Honduras. It was also documented that workers were exposed to toxic chemicals (bleaches, solvents, and dyes). This scandal led the media to investigate other celebrities who endorse product lines for companies who mistreat their overseas labor force. Michael Jordan's ties to Nike and allegations of human rights abuses by Nike...

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