The Pros And Cons Of Tncs

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Transnational companies often do not take ethical and social considerations when manipulating and influencing the governments of the countries in which they have operations in, often leading these governments to make decisions that are not in the best interest of the people of those countries and thus undermining democracy in those countries. Since they are only pursuing their self-interest and nothing more, what is needed is an outside force that has the capacity and authority to limit the actions of these corporations in those nations. These nations are either too corrupted or have too little bargaining power due to the benefits of TNCs in terms of employment, GDP contributions and exports and there relatively weak economies. I would recommend…show more content…
Governments of these developed nations are partly to blame for the current circumstances of manipulation and political intrusion faced by developing nations as it was these developed nations that pushed these countries to reform to all for free trade and free flow of international capital. With poor systems of governance and an overwhelming imbalance of power, the current situation should have been foreseen as inevitable and these governments should take responsibility and take action to get these developing nations out of the pits that they have pushed them into. The people of many developed nations are already altering their consumption patterns to support ethical and socially responsible practices of corporations, sometimes even boycotting companies that are deemed to be unethical. This process of consumer social responsibility has been largely supported and advertised by the activities of NGOs. The consumer movement for ethical production practices forces TNCs to alter their behaviour as it is in the best interests of their own profits to act ethically in such cases. As a result, many TNCs have been pushed…show more content…
This overcomes some of the limitations of the solution involving NGOs as governments have regulative authority and as a whole, an inter-governmental body would have substantial bargaining power when dealing with TNCs. My recommendation is an inter-governmental agreement that ensures the standards of practices, a body to ensure that these standards are practiced, a mechanism through which the practices could be investigated and an agreement on what and how actions will be taken against the TNCs that fail to meet the specified standards. This idea is however not a new one, the idea of international regulation of TNCs has been brought on to the international agenda several times since the World War 2, and like any other international issue countries differed in their opinions and in the end failed to produce any results(43). TNCs often originate from developed economies and the problem is that they exercise a certain level of influence on these governments, thus constraining any corrective actions from the governments of developed

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