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Multinational Corporations - Essay Example

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Multinational corporations refer to business entities with operations in many countries. The headquarters of a multinational corporation are normally located in one country whereas the facilities are based in other countries. This model enables the company to enjoy the full advantages of incorporating in a certain locality and also the ability the cost production advantage i.e…
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Running Head: Role and Behaviors of Multinational corporations Role and Behaviors of Multinational corporations Name:
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Multinational corporations refer to business entities with operations in many countries. The headquarters of a multinational corporation are normally located in one country whereas the facilities are based in other countries. This model enables the company to enjoy the full advantages of incorporating in a certain locality and also the ability the cost production advantage i.e. the ability to produce the goods and services at lower costs.
An example of Multinational Corporation is the Coca cola Company which is the largest beverage manufacturing company in the world. The company has been in existence since 1892 and manufactures, distributes and markets non-alcoholic beverages and syrups globally. The company is in over 220 countries and has more than one million employees.
Multinational corporations are provides an important force for the dynamics of the world economy. For instance, the Coca cola Company has been a driving force for the developing world economy as far as jobs creation is concerned Chong(1983,p.130).
In global context, Coca Cola Company exhibits certain roles and behaviours.The Multinational corporations are involved in social corporate responsibilities across the globe. For instance, the Coca cola Company supports the sports activities. The company has major sporting events internationally. The coca cola company has sponsored such sports as football in developing nations by providing the teams with uniforms, painting stadiums e.t.c
As Multinational corporations operate in many different countries, they are subject many tax jurisdictions. They are thus suppose to pay taxes in the countries that they operates. The tax systems usually differ between nations and thus the process is usually complex. These differences among the tax systems have affects the managers' decisions of the multinational corporations. The U.S government usually does not differentiate between that income which is earned at home and that which is earned abroad. For the coca cola company which has its headquarters in the United States, the government gives credit to its headquarters for the tax amount paid to foreign countries in an effort to avoid double taxation.
Multinational corporations usually consider workforce as their largest cost. With his regard, they tend to look for the cheapest labor in order to maximize their profits. The workers usually are not well paid in such situations when the international agreements are designed so as to foster a cheaper labor environment. The multinational companies tend to operate in countries which do not have the regulatory steps of improving the workers conditions. It is therefore difficult for the coca company to improve the working conditions of its workers because improving the working conditions is associated with more costs Braunerhjelm, (1994, pg.7).
Multinational corporations such as the coca cola company are usually powerful with regards to the issue of human rights. The profit making is their objective goal which in its pursuit, damages such as violation of the human rights, participating and lobbying for manipulated agreements, child labor, environmental damage, cheap labor among others. They claim that their international involvement is usually based on a constructive agreement which is capable of promoting human rights especially in non-democratic nations. This is usually a convenient excuse so that they can continue with their exploitative practices.
Over the years the Coca cola Company has had a number of lawsuits and controversies with regards to the violation of human rights. There have been a number of court cases on matters relating to discriminatory and monopolistic practices. This has caused the company to change the way it conducts its business practices Hartman (1923, p.150).
Multinational Corporations are also known for the abuse of the environment in areas that they operate. For instance, the coca cola company has been accused severally on matters relating to the environment. There have been claims that the company overuses water meant for locals and thus leading to severe water shortages.



Works Cited
American soft drink and the company that makes it;Basic books,Vol.2,pp.4-68
Braunerhjelm, U 1994,'Multinational corporations, country characteristics, and clustering in foreign direct investment; Industriens Utrednings institute, no.45 pp.2-15
Chong,L 1983;Multinational business and national development: transfer of
managerial knowhow' Maruzen,pp.133
Hartman,J 1923;The Coca-Cola Company: opinions, orders, injunctions, and decrees
relating to unfair competition and infringement of trademarks;Coca-cola Co.,pp.1-648
Kalapos,G 2006; Fertility goddesses, groundhog bellies & the Coca-Cola Company: the
origins of modern holidays;Insomniac.Vol.2 pp.25-57
Onkvisit,S 1997; Coca-cola; Doubleday publishers,Vol 2 .pp.6-9.
Pendergras,M 2001; For God, country and Coca-Cola: the definitive history of the great
Senkuttuvan,A 1982,'Proceedings of a Conference on MNCs and ASEAN Development in
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Swaw,J 1997; International marketing: analysis and startegy' Prentice Hall,Vol.3.pp.207-206.
West,A 1997;Atlantic reporter;West publishing Co.Vol.100 pp.67-89 Read More
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