Multinational Enterprises - Essay Example

"Culture has a variety of embedded layers. National culture represents only the outermost layer with organizational culture, work culture, regional culture, familial culture, and so on constituting the inner layers." Brannen, M.Y. & Salk, J.E. (1999:34) cited in Beecher & Bird. However, there are much larger issues at stake. The Economic and Social Council of the United Nations requested as early as 1972 that a group of eminent persons be set up to study the role of multinationals and their impact on development especially in developing countries, and their implications for international relations and where necessary for Governments to have access to the information in order to facilitate their sovereign decisions and maybe even international action: Anti-globalisation voices argue that Multinational Enterprises (MNEs) are not concerned with development.

MNEs tend to accentuate disparities and inequalities in the absence of proper government policies and social. Further, as their products and services target high net worth individuals, their activities are not sustainable and convey limited benefits to the majority of the indigenous population: "They affect patterns of consumption and the direction of innovation; they orient technological change and investment; and they own or produce most of the basic commodities used in industry and commerce; intentionally or unintentionally, they can affect political processes of both home and host countries" - United Nations (1974:29, 30).

Whilst lauding companies like Co-op and Iceland for breaking ranks and working in collaboration with Non Governmental Organisations (NGOs) to put resources into building social enterprises, Roddick (2001) argues that their efforts are still inadequate:"Because the most powerful bodies in the world, the World Trade Organisation, the World Bank and the International Monetary Fund are also the least democratic and inclusive. The result has been a major democratic deficit that threatens the delicate consent that globalization has been able to operate under, and also - as it happens - threatens what progress the NGOs have been able to make.

" Roddick (2001:14)In contrast, Rugman (2000:5) defines a multinational enterprise as: "a firm with production and/or distribution facilities in two or more countries." He denies the concept of a single global market and posits that the majority of business activity takes place in regional blocks, particularly Japan, North America and the European Union. Rugman gives critics of MNEs short shrift. For example, in reply to a claim that MNEs wield political power, he retorts:"These enterprises are preoccupied with survival, profitability and growth and, in general, are far too busy to deal in any meaningful way with the social, cultural, and related non-economic areas of government activity.

" (Rugman 2000:6)He goes on to demolish critics of the World Trade O