Assess the Global Role and Local Impact of Multinational Companies.
Assess the global role and local impact of multinational companies.
A multinational company is often defined as a corporation whose operations and investments are broaden across a number of countries. They are also referred to as transnational companies. Therefore given this definition it would be expected that if a company operates over such a large territory that it would indeed have many effects and impacts, locally and globally, and its role would also be quite significant as it can have a direct influence on an economy, the environment and general effects on society. However, changing the way they run things in order to accomidate society could break there business down and they could eventually have no impact on society so looking at the situation is they impacts worth the change? ‘Theory has evolved over the years regarding social concerns, society’s expectations and corporate responsibility. Indeed, early management and economic theorists viewed the corporation as having a strong fiduciary responsibility to shareholders, but stopped short of considering any real obligation to other stakeholder groups’ (Friedman 1962; Teece 1984) (Corporate social responsibility, Accountability and Governance; Istemi Demirag). This statement I think is very true, due to the fact that, as time continues people’s opinions of what is deemed socially responsible in both corporate and everyday society varies, as it is a sensitive topic that is very opinion based. Corporate social responsibility is when companies realise that their activities have economic, social and environmental influences. However, to put it simply it can be divided into two broad categories; one-off activities and larger issues of policy and strategy. One-off activities basically cover things such as charitable donations of money and time given to charities or community projects, all of which are at the discretion of the owners of the company. Larger issues of policy and strategy is where the company needs
A multinational company is often defined as a corporation whose operations and investments are broaden across a number of countries. They are also referred to as transnational companies. Therefore given this definition it would be expected that if a company operates over such a large territory that it would indeed have many effects and impacts, locally and globally, and its role would also be quite significant as it can have a direct influence on an economy, the environment and general effects on society. However, changing the way they run things in order to accomidate society could break there business down and they could eventually have no impact on society so looking at the situation is they impacts worth the change? ‘Theory has evolved over the years regarding social concerns, society’s expectations and corporate responsibility. Indeed, early management and economic theorists viewed the corporation as having a strong fiduciary responsibility to shareholders, but stopped short of considering any real obligation to other stakeholder groups’ (Friedman 1962; Teece 1984) (Corporate social responsibility, Accountability and Governance; Istemi Demirag). This statement I think is very true, due to the fact that, as time continues people’s opinions of what is deemed socially responsible in both corporate and everyday society varies, as it is a sensitive topic that is very opinion based. Corporate social responsibility is when companies realise that their activities have economic, social and environmental influences. However, to put it simply it can be divided into two broad categories; one-off activities and larger issues of policy and strategy. One-off activities basically cover things such as charitable donations of money and time given to charities or community projects, all of which are at the discretion of the owners of the company. Larger issues of policy and strategy is where the company needs
References: Books Harvard Business school press, Harvard business review, business and the environment Edmund marshall, Business and society Hans, gunter, transnational industrial relations Istemi demirag, corporate social responsibility, accountability and governance, global perspectives Sally eden, environmental issues and business, implications of a changing agenda John wolinski & gwen coates, a2 business studies, aqa John wolinski & gwen coates, as business studies, aqa