Question

Explain specifically why firms’ should be held liable when targeting developing countries for low wage labor by providing real time examples. Hint: you may cite the experience of Nike and Reebok in Asia and Nestlé’s involvement in the cocoa planation in West Africa.

Answer 1

Developing countries are often plagued with problems of unemployment, poverty,huge population, lack of investments, all leading to lowering down of economic growth. Thus, when an MNC invests in a country (like India for example), it brings with it a huge amount of money leading to new employment opportunities and acquiring skills over time. This leads to development of country by fuelling economic growth.

Majority of MNCs support the labour unions. These unions help the working class from any exploitation that may befall on them. be it lowering of wages, extended working hours or any other issue, they have the right to go on strikes or demand an increase in wages or fixating the working hours.

Thus, these MNCs have a positive impact on the society.