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EXPLOITATION OF HUMAN RESOURCES BY MULTINATIONAL COMPANIES IN DEVELOPING ASIAN NATIONS.
Abstract
Globalization has led to the economic developments across the globe but, while this development offers a better living for the elite class of the society, the life of the workers who fuel these industries remain unchanged. For decades, multinational companies have been expanding and setting up their operations in developing nations to seek benefit of lower costs of production and services. However, this has led to exploitation of human resources by multinational corporations in developing nations. For this dissertation, I have conducted a desk based literature review of journals, due to the time constraint. I have concluded that, the host governments allow the firms to take undue advantage of the weak political, economic conditions in those regions by letting them ignore issues of workers' pay, safety, health hazards, in return expecting economic growth of the nation. Even though, the resulting economic growth does not help better the life of the workers.
Journal: INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT
... The exploitation of the workers is well documented in academic literature (Islam, 2017;Venkatesan, 2019;Akhter et al., 2019). Cheap labor has been the key driver for the success of fast fashion and has driven garment and textile production from Asia to Africa in recent times. ...
Purpose
In the last two decades, the fashion value chain traveled to developing parts of the world. To these nations, it paved a path for socio-economic development initially but lately, the aftermath has costed more. This article visualizes the gains and losses of fast fashion to these countries.
Design/methodology/approach
An in-depth systematic literature review was performed to analyze the secondary data from academic journals and reports from international organizations. The authors have compiled their empirical journeys in academia, research and industry from low- and middle-income countries (LMICs) based on Schon's (1983, 1990) theory of reflective practice. Further on, the article is structured using the value chain analysis (VCA) method which visualizes the aftermath of mass-producing fashion for the developed countries.
Findings
In this research it was found that LMICs have made substantial economic progress in the past two decades, however at a high social and environmental cost. It is the right time to find a balance between economic development and harm caused to the citizens of these nations.
Originality/value
At the moment the existing academic literature talks about unsustainable practices in the fashion sector around the world. This research precisely targets the LMICs where the aftermath is supposed to be much more severe. Further, it provides solutions and urges these nations to bring a substantial change throughout the value chain for a robust future.
It is given that Human Resources are a key source of competitive advantage in firms. Starting from the proven link between human resources and competitive advantage in developed firms worldwide, and on the other side, the generally unsatisfactory handling of human resources in Kosovan firms, we decided to undertake this research. The study was conducted in seven wholesale distribution firms of food and non-food products in the Republic of Kosovo. A total of 35 directors and managers within these firms were surveyed. We have proposed that wholesale distribution firms of food and non-food products in Kosovo do not consider human resources significant resources in providing competitive advantage. Therefore, they do not possess a standard strategy for human resource development. Another assumption was that most of these firms have human resource departments, but in practice these departments mainly deal with administrative work. Additionally, we have proposed that human resource practices are more or less similar in firms that have or do not have human resource departments. The results of this empirical study are generally consistent with the assumptions set out in this research.
In recent decades, economic globalization has grown significantly in affluent democracies. Taking this as a point of departure, we review social science research on the consequences of economic globalization for the state, the economy, and civil society. We advocate for a concrete position of empirical scrutiny, between the grand theorists and earlier empirical skeptics, and measure economic globalization as the heightening of international trade and investment. Social scientists have engaged in lively debates surrounding such topics as how globalization affects the welfare state, politics, deindustrialization, inequality, and organized labor. Among the themes that emerge from these debates are the distinct values of within- and between-country comparisons and the need for a stronger connection between theoretical accounts of globalization and empirical analyses. At the same time, many aspects of social life have been neglected by recent research on globalization. Throughout, we gauge current consensus and dissensus, identify understudied topics, and suggest directions for future research.
During the 1990s, anti-sweatshop activists campaigned to improve conditions for workers in developing countries. This paper analyzes the impact of anti-sweatshop campaigns in Indonesia on wages and employment. Identification is based on comparing the wage growth of workers in foreign-owned and exporting firms in targeted regions or sectors before and after the initiation of anti-sweatshop campaigns. We find the campaigns led to large real wage increases for targeted enterprises. There were some costs in terms of reduced investment, falling profits, and increased probability of closure for smaller plants, but we fail to find significant effects on employment. (JEL F23, J31, J81, L67, O14, O15)
The last two decades have witnessed a sharp increase in foreign direct investment (FDI) flows and increased competition among developing countries to attract FDI, resulting in higher investment incentives offered by host governments and removal of restrictions on operations of foreign firms in their countries. Fiscal competition between governments can take the form of business tax rebates, productivity-enhancing public infrastructure or investment incentives such as tax holidays, accelerated depreciation allowances or loss carry-forward for income tax purposes. It can take place between governments of different countries or between local governments within the same country. This paper surveys the recent theoretical and empirical economic literature on decentralization which attempts to answer three questions. First, does theoretical literature on fiscal competition and"bidding races"contribute to a better understanding of such phenomenon in developing countries? Second, are FDI inflows in developing countries sensitive to fiscal incentives and is there empirical evidence of strategic behavior from the part of developing countries in order to attract FDI? Third, what evidence is there about fiscal competition among local governments in developing countries?
Scholars of the theory of the firm have begun to emphasize the sources and conditions of what has been described as “the organizational advantage,” rather than focus on the causes and consequences of market failure. Typically, researchers see such organizational advantage as accruing from the particular capabilities organizations have for creating and sharing knowledge. In this article we seek to contribute to this body of work by developing the following arguments: (1) social capital facilitates the creation of new intellectual capital; (2) organizations, as institutional settings, are conducive to the development of high levels of social capital; and (3) it is because of their more dense social capital that firms, within certain limits, have an advantage over markets in creating and sharing intellectual capital. We present a model that incorporates this overall argument in the form of a series of hypothesized relationships between different dimensions of social capital and the main mechanisms and processes necessary for the creation of intellectual capital.
Over the past two decades, sales of fair trade coffee have grown significantly and the fair trade network has emerged as an important international development project. Activists and commentators have been quick to celebrate this sales growth, which has allowed socially just trade, labour, and environmental standards and practices to be extended to hundreds of thousands of small farmers and poor rural workers throughout the Global South. While recent assessments of the fair trade network have focused on its impact on local poverty alleviation, however, the broader political-economic and historically rooted structures that frame it have been left largely unexamined. In this study, Gavin Fridell argues that while local level analysis is important, examination of the impacts of broader structures on fair trade coffee networks, and vice versa, are of equal if not greater significance in determining their long-term developmental potential. Using case studies from Mexico and Canada, Fridell examines the fair trade coffee movement at both the global and local level, assessing its effectiveness and locating it within political and development theory. In addition, Fridell provides in-depth historical analysis of fair trade coffee in the context of global trade, and compares it with a variety of postwar development projects within the coffee industry. Timely, meticulously researched, and engagingly written, this study challenges many commonly held assumptions about the long-term prospects and pitfalls of the fair trade network's market-driven strategy in the era of globalization.
A broad yet distinctive analysis of the growing political, economic, and social gap existing between the world's northern and southern hemispheres. Featuring papers selected by the ISA President from the 2006 annual meeting, this upper-level volume examines the genesis of the North-South divide, the ongoing policy problems between developed and lesser developed states, and how these issues influence current and future world politics. An upper-level text ideal for academic libraries, think tanks, and libraries of policy institutions Organized into three distinct focus clusters: Problems afflicting the global South -- trade, development, financial crises, structural adjustment, democratization, human rights, disease; Specific conflicts between North and South -- energy, terrorism, weak states, nuclear weapon proliferation; Solutions to reduce the North-South gap -- foreign aid programs, global media, democratization, political power in the United Nations, the emerging powers phenomenon, transnational social movements, and Northern foreign policy adjustments Tackles the tough questions likely to dominate international relations discourse for decades to come.
East Asia integration is characterized by informal integration, which distinguish East Asia from other regions emphasizing formal integration. The Regional Production Network (RPN) is a major type of informal integration. It was built by Japanese firms trying to create a Japanese-led multi-tier division of labor in East Asia. The theoretical basis of the RPN is the flying geese model (proposed by Akamatsu) and its modern variants. The RPN was instrumental in forging production ties among East Asian countries and has helped the export-led industrialization of East Asian economies. The RPN helped to drive Asian integration in the absence of strong formal integrative institutions in the region. However, the RPN is built upon the dependence of other East Asian economies on Japan for technology and on the US for market. The system is likely to break down when the Japanese economy stagnates or when the US can no longer absorb the increasing exports. The breakdown of the RPN is the production factor for the Asian financial crisis. The flying geese model is also static in that it does not reflect the rapid catching up of certain followers. The dominance of the RPN has been challenged by the ethnic Chinese business networks, another type of informal integration. The Chinese networks have helped some ethnic Chinese economies, such as Taiwan and China, enabling them to perform better in the Asian crisis and to catch up with the industrialized countries in global competition. The evolution of the RPN reflects the changing nature of East Asian political economy.
Positions taken by delegations in the U.N. General Assembly during debates of the Sixth and Seventh Special Sessions are analyzed to determine clustering on economic issues and their sources. Third-World states took positions consistently distinct from those of Eastern and Western countries, and economic attributes appear to explain this. Differences within the Third World were not consistent, however, and were more apparent in the Seventh Special Session. Divisions found between Third-World states on issues such as resource allocations and monetary reform included: states with slow versus fast economic growth rates; states dependent on Western versus Eastern aid; and regional differences. Neither OPEC nor a “fourth world” appeared distinct from the Third World as a whole. Coalitions, varying by issue, appeared to overlap to build the Third-World “bloc.”
The rapid rise of multinational Corporations (MNCs) from emerging economies has led to greater interest and urgency in developing a better understanding of the deployment and diffusion of managerial strategies from their perspective and without assuming the prevailing Western ethnocentric orthodoxy. This paper develops a conceptual framework of global HR strategies and practices in MNCs from emerging economies across their subsidiaries in both developed and developing markets. Using data from a pilot study of an Indian MNC, it provides insights and guidance into the motives, strategic opportunities and constraints in cross-national transfer of HR policies and practices in a multi-polar world.
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that even when the exploitation does no harm and is mutually beneficial, the exploiters are morally obliged to stop exploiting. Apparel manufacturers, for example, ought to see to it that the contractors they hire pay a living wage to their employees and ensure that working conditions are satisfactory. A responsible corporation will not seek to maximize profits if they result from exploitation, Meyers argues, but should settle for the minimum profit necessary for the business to survive in the long run.3 Shareholders and senior executives have a duty to accept less in order that the workforce from which they extract profits receives at least enough. I agree with Meyers that mutually advantageous transactions can be wrong- fully exploitative even when there is no coercion, fraud, or harm. I also agree that apparel manufacturers and their contractors do frequently exploit workers. But in this article I will show that Meyers errs in describing the responsibility of exploit- ers by failing to distinguish between discretionary and structural exploitation. Discretionary exploitation is indeed unacceptable and agents do have a prima facie obligation to avoid taking unfair advantage in this way, even if they must forego large gains. Some sweatshop exploitation does take this form. But the type of sweatshop exploitation Meyers assesses in his article is structural, not discretion- ary, and it is structural in a rather pure form. The distinction is important because the moral context in which this type of exploiter acts is qualitatively different from the situation of discretionary exploiters. Pure structural exploiters confront a kind of dirty-hands dilemma in which taking unfair advantage can be the right thing to do. These exploiters do gain at the expense of their victims, but in the circum- stances in which they operate taking unfair advantage may be the lesser evil. And though the circumstances that engender structural exploitation should be reformed, the burden of that reformation is not the sole responsibility of the exploiters. It is rather a collective obligation. Singling out individuals—even
This study examines the relationship between foreign economic capital and the level of government respect for two types of human rights in developing countries. Two opposing schools of thought offer explanations as to what this relationship might be like. According to the liberal neoclassical school, the acceptance of liberal economic doctrine will provide positive political benefits to developing countries. The “dependency” school, on the other hand, argues that because ties between core and periphery elites give governments in developing nations an incentive to repress, human rights conditions will worsen as foreign economic penetration increases. The results of previous empirical queries into this matter have been mixed. In contrast to most studies, we focus on a broader measure of foreign economic capital, including foreign direct investment, portfolio investment, debt, and official development assistance. Using ordered logit analysis on a cross-national sample of forty-three developing countries from 1981 to 1995, we discover systematic evidence of an association between foreign economic penetration and government respect for two types of human rights, physical integrity rights and political rights and civil liberties. Of particular interest is the finding that both foreign direct investment and portfolio investment are reliably associated with increased government respect for human rights.
This paper examines labor remuneration in Jakarta's small-scale garment and wood furniture enterprises located in three industrial clusters. Workers in small-scale enterprises received an equitable wage in comparison with employment conditions in large firms and the minimum physical needs of workers. An equitable remuneration for workers is not so much dependent on enterprise size as the dynamics of the industrial sector. Therefore, government policies should focus on dynamic industrial sectors in specific contextual setting and location.
The presented theory views inductive learning as a heuristic search through a space of symbolic descriptions, generated by an application of various inference rules to the initial observational statements. The inference rules include generalization rules, which perform generalizing transformations on descriptions, and conventional truth-preserving deductive rules. The application of the inference rules to descriptions is constrained by problem background knowledge, and guided by criteria evaluating the “quality” of generated inductive assertions.
Based on this theory, a general methodology for learning structural descriptions from examples, called Star, is described and illustrated by a problem from the area of conceptual data analysis.
Summary We test whether minimum wage legislation is an effective poverty reduction tool in a poor country trying to stay competitive in the global economy. In Honduras, increases in relatively high minimum wages lead to reductions in poverty, especially extreme poverty. However, the impact is felt only in households with workers in large firms and felt more strongly among those with low wage workers. Increases in the minimum do not affect poverty in sectors where minimum wages are not enforced or do not apply. Hence minimum wages can be a poverty reduction tool in the formal sector, which competes globally.
The bargaining power model of HC–MNC (host country–multinational corporation) interaction conceives of economic nationalism in terms of rational self-interest and assumes both inherent conflict and convergent objectives. In extractive industries, there is strong evidence that outcomes are a function of relative bargaining power and that as power shifts to developing HCs over time, the bargain obsolesces. A cross-national study of the bargaining model, using data from 563 subsidiaries of U.S. manufacturing firms in forty-nine developing countries, indicates that while the bargaining framework is an accurate model of MNC–host country relationships, manufacturing is not characterized by the inherent, structurally based, and secular obsolescence that is found in the natural resource industries. Shifts in bargaining power to HCs may take place when technology is mature and global integration limited. In industries characterized by changing technologies and the spread of global integration, the bargain will obsolesce very slowly and the relative power of MNCs may even increase over time.
This paper outlines a theory of the multiproduct firm. Important building blocks include excess capacity and its creation, market imperfections, and the peculiarities of organizational knowledge, including its fungible and tacit character. A framework is adopted in which profit seeking firms are seen to diversify in order to avoid the high transactions costs associated with using various markets to trade the services of various specialized assets. Neoclassical explanations of the multiproduct firm are shown to be seriously deficient.
This article investigates empirically the link between international outsourcing and the skill structure of labour demand in the UK. It is the first detailed study of this issue for the UK. Outsourcing is calculated using import-use matrices of input-output tables for manufacturing industries for the period 1982 to 1996. Estimating a system of variable factor demands, our main results show that international outsourcing has had a strong negative impact on the demand for unskilled labour. Hence, international outsourcing is an important component in explanations of the changing skill structure of manufacturing industries in the UK. Copyright 2005 Royal Economic Society.
We develop an endogenous growth model with R&D spillovers to study the long-run consequences of offshoring with firm heterogeneity and incomplete contracts. In so doing, we model offshoring as the geographical fragmentation of a firm's production chain between a home upstream division and a foreign downstream division. While there is always a positive correlation between upstream bargaining weight and offshoring activities, there is an inverted U-shaped relationship between these and growth. Whether offshoring with incomplete contracts also increases consumption depends on firm heterogeneity. As for welfare, whereas with complete contracts an R&D subsidy is enough to solve the inefficiency due to R&D spillovers, with incomplete contracts a production subsidy is also needed. Copyright © The editors of the "Scandinavian Journal of Economics" 2009 .
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