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MNCs Presentation


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MNCs Presentation

  1. 1. Multinational Corporations in the Developing World
  2. 2. — U.S. President Abraham Lincoln, Nov. 21, 1864 (letter to Col. William F. Elkins) Ref: “The Lincoln Encyclopedia”, Archer H. Shaw (Macmillan, 1950, NY) “ I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. ... corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavour to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.” Fact: Of the 100 largest economies in the world, 51 are corporations while only 49 are countries, based on a comparison of corporate sales and country GDPs
  3. 3. Definition: A firm which has the power to coordinate and control operations in more than one country, even if it doesn’t own them. Multinational corporation (MNC) or transnational corporation (TNC) is a corporation or enterprise that manages production or delivers services in more than one country.
  4. 4. MNC’s Structure <ul><li>Horizontally integrated multinational corporations manage production establishments located in different countries to produce the same or similar products. (example: McDonald's ) </li></ul><ul><li>Vertically integrated multinational corporations manage production establishment in certain country/countries to produce products that serve as input to its production establishments in other country/countries. (example: Adidas or Nike, Inc. ) </li></ul><ul><li>Diversified multinational corporations manage production establishments located in different countries that are neither horizontally nor vertically nor straight, nor non-straight integrated. (example: Best Western or Hilton Hotels ) </li></ul>Multinational corporations can be divided into 3 broad groups according to the configuration of their production facilities:
  5. 5. Ethical Issues? <ul><li>Treatment of employees </li></ul><ul><li>Transparency to consumer </li></ul><ul><li>MNC government influence </li></ul><ul><li>MNC governance </li></ul>
  6. 6. Negative Effects <ul><li>Enforce national laws </li></ul><ul><li>Tax competition </li></ul><ul><li>Market withdrawal </li></ul><ul><li>Patent </li></ul><ul><li>Lobbying </li></ul><ul><li>Government control </li></ul>
  7. 7. Benefits <ul><li>Generate job and income </li></ul><ul><li>Training of local workers in new & transferable skills </li></ul><ul><li>Technology transfer </li></ul><ul><li>Development opportunity </li></ul><ul><li>Educational opportunities </li></ul>
  8. 8. Multinational Corporations and Women’s Health in Developing Countries
  9. 9. Role of MNC’s in Developing World <ul><li>Why are women hired? </li></ul><ul><li>Control over Women-Human Rights Injustices </li></ul><ul><li>Women as Second Class Citizens </li></ul><ul><li>Lower labor costs </li></ul>
  10. 10. Affect on Women’s Health <ul><li>Women’s Health Expendable </li></ul><ul><li>Health Problems </li></ul><ul><li>Lack of Adequate Health Service </li></ul>
  11. 11. Spirits of Resistance <ul><li>Women Factory workers in Malaysia </li></ul><ul><li>Their methods of resistance </li></ul>
  12. 12. Maquiopolis <ul><li>City of Factories </li></ul><ul><li>South of US-Mexico Border </li></ul>
  13. 13. Nestle and Bottle Feeding <ul><li>Promotion of Infant Formula </li></ul>
  14. 14. Pharmaceutical Companies
  15. 15. Top 10 Drug Companies <ul><li>Johnson and Johnson </li></ul><ul><li>Pfizer </li></ul><ul><li>Bayer </li></ul><ul><li>GlaxoSmithKline </li></ul><ul><li>Novartis </li></ul><ul><li>Sanofi-Aventis </li></ul><ul><li>Hoffmann- La Roche </li></ul><ul><li>AstraZeneca </li></ul><ul><li>Merck & Co. </li></ul><ul><li>Abbott Laboratories </li></ul>
  16. 16. Pfizer <ul><li>Unapproved Drug “Trovan” given to children suffering from cholera, measles, and bacterial meningitis in 1996. </li></ul><ul><ul><li>5 children died </li></ul></ul><ul><ul><li>Lawsuit claims drug given without parental consent and that Pfizer was using outbreak to test their drug </li></ul></ul>“ Panel Faults Pfizer in '96 Clinical Trial In Nigeria” - May 7, 2006
  17. 17. Novartis <ul><li>Challenged India’s patent law which allows India to refuse recognition of re-patenting of modified drugs. </li></ul><ul><ul><li>Court rules that lawsuit was a threat to those suffering from HIV, Cancers, and Diabetes and those who are too poor to afford medications </li></ul></ul>“ India's cheap drugs under patent threat” BBC Feb 5, 2007
  18. 18. Hoffmann- La Roche <ul><li>Accused of monopolizing the production of oseltamivir (avian influenza drug). </li></ul><ul><ul><li>Philippine Health Secretary said drug is stockpiled in 1st world and not easily available in countries that need it most in SE Asia. </li></ul></ul><ul><ul><li>Hoffmann-La Roche allowed other companies to produce oseltamavir on 10/20/05 </li></ul></ul>“ Why Roche Released Tamiflu” Time Oct 19, 2005
  19. 19. Abbott Laboratories <ul><li>Thailand created its own version of “Kaletra” so Abbott Labs decided not to introduce any new medications to Thailand </li></ul><ul><ul><li>Intellectual property rights </li></ul></ul>“ Abbott pulls HIV drug in Thai patents protest” Financial Times Mar 14, 2007
  20. 20. Intellectual Property Rights <ul><li>20 years </li></ul><ul><ul><li>Allow for company to make money to offset costs of innovation </li></ul></ul><ul><li>Generics after </li></ul>
  21. 21. Doha <ul><li>TRIPS (Trade-Related Aspects of Intellectual Property Rights) </li></ul><ul><li>WTO commitment to promoting health </li></ul><ul><li>2001, the Doha Declaration’s goal was to reaffirm WTO members going around patent laws for public health purposes/emergencies. </li></ul>“ Doha Declaration explained”-WTO
  22. 22. Economic …
  23. 24. A Look At The Economics… <ul><li>In-depth inquiry into multinational company investment in developing countries </li></ul><ul><li>14 in-depth sector case studies focusing on 4 major developing economies: </li></ul><ul><li>China, India, Brazil and Mexico </li></ul><ul><li>Foreign Direct Investment (FDI) </li></ul><ul><li>5 sectors: automotive, consumer electronics, food retail, retail banking and information technology/business process offshoring </li></ul>
  24. 25. Findings <ul><li>Capital, technology and a range of skills </li></ul><ul><li>Improved standards of living </li></ul><ul><ul><li> prices,  quality goods and more choice </li></ul></ul><ul><ul><li> productivity and output led to an  in national income </li></ul></ul><ul><li>Muted impact on employment </li></ul>
  25. 26. Impact On Host Countries: <ul><li>If investment motivated by search for lower wage cost locations… </li></ul><ul><ul><li> sector productivity, output, employment and standards of living </li></ul></ul><ul><li>If investment motivated by interest in expanding their market in host country… </li></ul><ul><ul><li>Could be positive, but often came at cost to incumbent, less productive companies </li></ul></ul>
  26. 27. What The Future Holds…
  27. 28. Conclusion This topic is an enormous topic, it includes such issues as economics, globalization, migration, women’s health, environmental health, human rights, policy, conflict & politics, just to name a few…
  28. 29. Summary <ul><li>Description & Definition of the Issue </li></ul><ul><li>Ways MNC’s Can Effect Women’s Health </li></ul><ul><li>Example: Pharmaceuticals </li></ul><ul><li>Economics </li></ul>
  29. 30. Bad News… <ul><li>There are a lot of companies out there taking advantage of the local populations and environment. </li></ul>
  30. 31. Good News… <ul><li>Every single day people are becoming activists and social entrepreneurs. People are changing the way they think about business and the “bottom line”. This is the direction we need to move in! </li></ul>
  31. 32. On a Positive Note, In Closing…
  32. 33. Further Resources… <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul>