Better Pay and Working Conditions in Multinational Enterprises

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Part I: Identification
Alexander Hijzen and Paul Swaim, “Do multinationals promote better pay and working conditions?” OECD (Organization for Economic Development) Observer, October 2008; Issue 269, pp 15 – 17.

Part II: Abstract Summary
The article examines the behavior of international business enterprises, also known as multinational enterprises (MNEs), wages and working conditions, from the perception of the Organization for Economic Development (OECD). It gives a basic definition of a MNE as a corporation with headquarters in one country and affiliates, subsidiaries or merged operations in one or several other countries. Example MNE’s mentioned in the article include: Coca-Cola, Nike, Microsoft, EDF (French energy company), Rio Tinto (British-Australian mining firm), and Toyota. The article notes that there are thousands of MNEs and that they all are not a symbol of Western economic dominance. Some of the top firms listed now in FT one of the UK’s top international business magazines includes China, Russia, India, and Brazil. First, the article addresses the pro and con opinions that supporters and opponents of globalization bring to the working table of MNE’s. It stresses the fact that no matter what one’s opinion may be, the role of the MNEs in the world economy will continue to grow. Next, the article discusses the nature of MNEs as well as notes their advantages on employment (wages and working conditions). Concerning the wages, the article mentions that MNEs’ technical expertise and modern management styles would provide a basis for higher pay wages. However, the pessimists doubt the higher pay since the MNEs are typically in a strong bargaining position with local workers. The article explains that the best way to answer the question do multinational promote better pay and working conditions was to present a comparison of local and foreign companies in terms of their labor practices. So a study was completed to report on...
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