BU491 Chapter 8
The Future of the Transnational: An Evolving Global Role
MNEs got a bad rep by poor countries that they were exploiting the world and getting richer
The Growing Discontent
Prior to the 2000s, people were very hopefully that globalization would bring them wealth
oBut they were upset that developing countries didn’t see much of this wealth
oThe wealth gap simply got bigger!
There were many protests against globalization
Some people even said that poor nations got poorer
oPeople argued MNEs would crowd local enterprise and then use their monopoly to
The Challenge Facing MNEs
Trillions of dollars have been given to Africa, but no progress has been seen
HOWEVER, China’s massive and booming economy has transformed lives there!
o800,000 foreign companies invested in the country and brought many people out of
oNot only for low labour costs, but many companies do R&D in China and are super
It was easy for companies to see that people who are no longer poor become
MNEs flow about 4 times more cash into countries than foreign aid
The challenge is now how to step up and deal with the problems that cause anti-globalist
Responding to Developing World Needs: Four MNE Postures
How MNEs can position themselves in response to these problems
The Exploitive MNE: Taking Advantage of Disadvantage
These companies take advantage of low labour rates, low health and safety standards, long
workweeks, low regulations, etc.