CC BY
58
TRANSNATIONAL COMPANIES INFLUENCE ON SOCIETY S.V. Komikov, graduate student
Financial university under the Government of Russian Federation (Russia, Moscow)
DOI: 10.24411/2411-0450-2019-10487
Abstract. In modern world people every day face transnational companies here or there. This article describes main working principles of transnational companies and their influence on the modern states and society in general. There is shown the influence of the ETCu on the habit formation of society. Morover, there is described cases of negative influence and examples, when society made TNCs to change their internal company policy.
Keywords: transnational companies, workplace, low-skilled labour, staff training, pharmaceutical production, Nestlé boycott, Unilever, social business responsibility.
Many TNCs provide products and services that people, who live in poverty needs very much. So, they can use it in order to improve their lives. Southern companies have got a fame in the production and promotion of products for poorer consumers. In Tanzania, Swahili cheap motorcycle rickshaws are called "Bajaj ", a derivative word from the name of an Indian company that makes them: Bajaj. When in 2008 Indian Tata Motors produced its $ 2500 car, she wanted to repeat the path of Volkswagen Beetle and Model T Ford, promising to provide cars with a new generation of consumers in the developing world [1].
TNCs are not only following the desires of consumers; they are also forming them, often using the techniques of colonization policy (like McDonald's), and sometimes in very contradictory ways. Perhaps the most sad and aggressive attempt was made by Nestlé. They were trying to persuade mothers to give up breastfeeding in favor of their dairy products in poor countries. But they forgot about the costs and risks associated with dirty water. This has led to a global boycott, which has seriously damaged the company's reputation.
Some firms are trying to obey the laws and respect their employees and customers, while others abuse their power. They are causing significant damage to the environment, public health, and local politics. Some are moving operations from one jurisdiction to another in order to evade paying taxes and government regulation and this undermines the development potential [2]. Organizations like Global
Witness are publishing regular reports on the most egregious forms of corporate negligence. World Bank figures show that international corporations pay bribes up to $ 1 trillion in order to secure profitable transactions every year.
The multinational corporations' leader's role has completely been changed. Nowadays they need to be able to work in partnership with national governments and other institutions. It is clear nowadays that the company will quickly achieve its goals through cooperation.
If such leaders are farsighted, then they can predict perhaps one of ten things, but in the other nine cases something happens that needs to be responded to correctly: new competitors, a natural disaster, a new law - things that happen outside the control of the company's management. It is so-called "black swan". The world is changing easily and really fast. Modern company has to be able to get quick feedback from the market.
The long-term record of blocking progressive change or actively pursuing regressive ones of the of TNCs has led many activists to be cynical about the stated desire of some leaders to solve world problems. Corporations usually welcome a creative approach to "destroying" the market, as new ideas, products and companies grow and fall, which allows commodity companies to turn into global empires. But at the same time, they are doing everything that is possible in order to avoid total destruction, including the frequent use of falsified rules and double standards [3].
Corporations actively lobbied government payments, excessive patent protection, exclusive contracts, tax breaks, trade rules, and other government interventions that favor the results of their activities. When it comes to a specific regulation that limits TNCs 'freedom to act on their own, most of them make every effort to block it. From laws that guarantee minimum wages, health and safety, or the freedom to join trade unions to rules governing product quality, corporate governance, or consumer protection; corporate obstruction almost everywhere is universal. In 2015, the once brave outsider - Google attracted members of the US Congress (whose campaigns it financed) to participate in an attempt to force the EU to abandon an antitrust case in the amount of 6 billion euros against it.
Pharmaceutical industry is one of the most active lobbyists at the global and national levels. Pharmaceutical companies use about 3,000 lobbyists in USA and spend millions of dollars to influence national laws and the US position in trade negotiations. They continue to encourage countries to adopt stricter intellectual property regulatory mechanisms that make tougher access to medicines. In 2015, Turing became infamous when it raised the price of "Daprima". This medicine has been curing a dangerous parasitic infection for 62 years. The price was increased from $ 13.50 to $ 750 per pill. The initial price of this drug was $ 1 per pill.
Activists seek to influence TNCs with strategies that go from cooperation to confrontation. On the one hand, NGOs meet with corporate executives, scientists and government officials in connection with numerous initiatives with several stakeholders on such pressing issues as climate change or food security. On the other hand, activists use litigation and public censure to force government actions. There is a growing area of lobbying and certain aspects corporate behavior influencing campaigns between these poles.
First of all, corporate executives' bonuses depend on profits; if the company loses money, they will decline or be redeemed. This hard truth can be a source of dynamism and innovation, but at the same time it makes business conservative in nature. The standard mode of TNCs is to protect the status quo or
at least delay the implementation of the change for a longer time. The greater the investment of TNCs (for example, the fixed investment of oil companies in drilling rigs), the more they will resist change.
There are four key factors that a corporation assesses before supporting progressive changes: protecting its brand (especially important for companies engaged in consumer products); economic costs; the likelihood of impending changes in public policy (companies may decide to take action before they are forced by circumstances). In addition to such cost-benefit calculations, authority at the level of the CEO and senior management has a clear weight in overcoming inertia and inspiring the desire for change in the company.
Brand-name corporations are very sensitive to consumer opinion, as far as bad advertising can quickly destroy the brand value that has been building up for decades. Activists have succeeded in such high-profile campaigns as the Nestlé boycott. They used more subtle mechanisms of civil society - in particular, the threat of consumer pressure to convince companies to improve their social and environmental performance.
In the early 2000s, a wave of "corporate social responsibility" emerged, which has spread to a large extent the private sector since this time. Corporate social responsibility is a controversial phenomenon: declared as corporate public relations by opponents, it is supported as a market-friendly alternative to ineffective government regulation.
TNCs also have huge power in terms of the exceptional brands impact on consumers and the values that these brands transmit. A list of measures that can be applied in order to influence the activities of TNCs: revising financial markets to put an end to the culture of obtaining short-term benefits that undermine attempts to build sustainability. Another measure is to increase transparency and reporting requirements in order to help corporations to escape buying politicians and political parties. The third one is to establish a control system in order to ensure polluting companies pay for carbon dioxide emissions and other problems of that kind. And the last measure is suppression of tax evasion. For any of these initiatives aimed at prosperity
and development coordinated actions between northern and southern activists and alliances with progressive governments will mater, let alone to mention the beneficial use of competition between companies.
So, all above said can be summarized in the statement that for initiative groups it is not enough to simply declare that they are "against corruption" or "support business".
stand how the system does of the of transnational corporations works. We have to learn how to work with it, taking into account the traditions and principles relating to specific companies, new ways of development, positive deviations from the norm and critical situations that characterize the corporate landscape, as well as understand specifics of various ways of influence on corporations.
Whatever the goal is, it is needed to under-
References
1. World Investment Report 2006. FDI from Developing and Transition Economies: Implications for Development. N. Y.; Geneva, 2006. 340 p.
2. Глобальные трансформации: политика, экономика, культура / Д. Хелд, Д. Гольдблатт, Э. Макгрю, Дж. Перратон; пер. с англ. В.В. Сошова [и др.]. М., 2004. 576 с.
3. Khan H.A. Globalization and Quality of Government: An Analysis of the Relationship // Public Organization Review. 2017. Vol. 17, №4. P. 509-524. https://doi.org/10.1007/s11115-016-0352-4.
ВЛИЯНИЕ ТРАНСНАЦИОНАЛЬНЫХ КОМПАНИЙ НА ОБЩЕСТВО С.В. Комиков, магистрант
Финансовый университет при Правительстве Российской Федерации (Россия, г. Москва)
Аннотация. В современном мире люди каждый день сталкиваются с транснациональными корпорациями в той или иной степени. В данной статье описываются основные принципы работы транснациональных корпораций и их влияние на современные государства и общества в целом. Показывается их влияние на формирование привычек общества. Кроме того, описываются случаи негативного влияния и того, как общество заставляло корпорации изменить внутреннюю политику компании.
Ключевые слова: транснациональные корпорации, рабочие места, низкоквалифицированный труд, обучение персонала, фармацевтическая промышленность, бойкот Нестле, Юниливер, социальная ответственность бизнеса.
