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Final Globalization Paper

Final Globalization Paper

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Published by Heather Lemmons

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Published by: Heather Lemmons on May 10, 2012
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The Positive & Negative Effects of International Corporations Heather Lemmons LBST 2102-H93 Honors Global Connection May

9, 2012

“Globalization is inevitable and irreversible” according to claim 2 of the five claims of market globalism in Manfred B. Steger’s book “Globalization: A Very Short Introduction”. This seems to be perfect to describe how international corporations affect an area, such as Africa, because globalization is inevitable and irreversible as a result of the development of technology. There are ways to postpone globalization but it will progress as our world becomes more connected. It will be impossible to stop because once we start progressing the only way to move is forward. Although globalization is not irreversible, I believe that the effects are irreversible depending on the ethics of corporations. A corporation’s ethics and motives determine what type of effect (positive or negative) and to what extent does their actions have on the community around them. Although the goal of all corporations is to gain a profit, some companies completely disregard the negative effects that they have on a community. There are many motives that effect how a business is run but the major motive for all businesses is to gain a profit and be successful. Lets be honest, if there was no room for profit, how many companies would there be? Most likely, the only companies that would still remain would be nonprofits but even they need profits in order to buy supplies to help communities. So why do businesses take risk in expanding to areas, such as Africa, and in areas where the economy is bad? How do companies react differently when war is occurring in an area? To start off with, businesses take risk in expanding in order to expand their market to reach more customers. By expanding internationally, companies are entering into new markets that will allow more room for a profit margin. Sometimes, a company must expand because it has reached its max potential in a market or because it needs more room

in order to successfully function. Like I have said before, globalization is inevitable and as a result a successful business will have to eventually expand. The ultimate goal of all businesses is to gain a self-image that is recognizable along with a prestigious title. Lets take a look at Coca-Cola and see how they have expanded over the years, why, and how they maintain this massive corporation. Coca-Cola had its start on May 8, 1886 when John Pemberton in Atlanta founded it. Although Pemberton had faith in his company and immediately wanted to expand, he knew that in order to be successful that he would have to allow coke to build itself up. The first year that coke was sold Pemberton received a profit of a whopping $50. Today it is one of the biggest multi-million dollar corporations. In 1891, Asa Candler bought out coke and within four years Coke was available in all 50 states, Canada and Mexico. Coke also expanded overseas and by 1929 it opened 64 plants. Today, many people see Coke as an American Symbol because during World War 2, Coke was committed to making their products available for soldiers wherever they were (Coca-Cola Company , 2011) Today, Coke is trying to keep its products competing in foreign markets. However, areas that have been affected by war in Africa are causing stress on the Coke Corporation and they have even shut down certain plants in order to prevent harm to the company (Newspaper, 2008). Although Coke seeks profit, they keep the community around them in mind as well. For example, in “Don’t Lets Go to The Dogs Tonight” Coca-Cola seemed as if it was a necessity, almost like away of life. Throughout the whole book the narrator spoke about drinking a delicious ice-cold Coke. Through this, we can tell that Coke focused on making their products convenient by making it relatively available and cheap. Of course the CocaCola Corporation was making profit but their ethics ensured that the company would not

negatively affect the community and environment around them. Coke also plays a huge role in the African community by giving back. For example, The Coca-Cola Africa Foundation (TCCAF) that was created in 2001 and in their overview of the program they state “TCCAF is the entity that coordinates our corporate social investment programs and implements community initiatives in Africa” (Coca-Cola Company, 2012). Recently, Coke has committed to donating $6 million in order to improve sanitation and to purify water resources in Africa. This will affect around 250,000 women and girls in Algeria, Kenya, Liberia, Morocco, Nigeria, Rwanda, Sierra Leone, South Africa, Swaziland, Tanzania, Tunisia, and Uganda. This will have also have a major impact on The Replenish Africa Initiative (RAIN) by helping them reach their goal of making clean water available to at least 2 million people by 2015 (Coca-Cola Company , 2011)(Coca-Cola Company , 2011). This just shows how good ethics can positively affect a community through corporate philanthropy. However, in “Hotel Rwanda” we saw indirectly how major corporations can indeed cause negative affects on a community. For example, Chinese oil companies have a negative effect on the community because Oil is a very valuable resource as well as a successful and profitable business. Even during war, these companies refuse to stop drilling and pumping oil because they seek profit. As a result, this affects the community negatively because whenever the United Nations (UN) try to step in and control the chaos the Chinese government will veto the actions. As a result, this limits the extent to which the UN can interfere. This is only one of many examples why and how powerful corporations can affect a community negatively. China is not the only super power that is allowing this to go on and as bad as

Americans hate to admit it, we are just as guilty. Have you ever thought about how your cell phone, laptop, and other electronics are killing innocent people? Probably not, and even if you do know, will this stop you from using these items? The answer is obviously no because we have created a world where these items are a part of our everyday lives. However, thousands of people are being tortured, raped, and dying everyday just so you can have the newest and convenient technology. Electronics such as cellphones and laptops uses minerals such as tantalite, tungsten, tin, etc. These minerals are also known as “conflict minerals” because they are extremely valuable yet very rare. However, the Congo has a massive supply of these minerals and groups are fighting over control of them. Even though we know this is going on, we still refuse to get rid of our electronics. However, some companies such as HP, Motorola, Nokia, etc. are taking steps in having “conflict free products”. This is causing a decrease in the need for the minerals and therefore it is reversing the effects. Yet, at the same time some other major corporations are taking no (or very little) steps toward ending this. This clearly shows how some companies overlook the effects of their businesses in comparison to the profits (McConnell, 2010). The globalization of Corporations also has an effect on local economies by supplying new jobs and opportunities. Whenever a corporation expands, they need more employees to ensure that their company is functioning fast and efficiently. As a result, this will decrease unemployment, the poverty level, and increase the population of the middle class. Also, some of these corporations supply benefits such as healthcare and life insurance, which will help improve the life of their families. When people work, they are able to invest in their local economies by buying products with the money that they have

earned. Even though we generally see job opportunities as a good thing, they are not always as good as they seem. Some companies (especially American companies) take advantage of another economy and its people when expanding. For example, Apple is a well-known and successful company but it has recently been under fire after negative allegations about a China plant. The US Fair Labor Association (FLA) did an investigation only to find that the China plant had some major issues. To start off with, employees were not getting a fair and sustainable pay for the jobs that they were doing. On top of unfair pay, most of the employees were over worked and worked long shifts everyday. Another problem with the plant was that it was extremely dangerous and the necessary safety precautions were being ignored. Since the investigation, the FLA has increased pay, safety rules, and it has insured fair representation of the majority (Peston, 2012). So as you can see, the globalization of corporations has both negative and positive affects on a community and its people. Many times the negative effects are ignored and overlooked in the media. As a result, it is our responsibility as citizens and humans to become educated about companies and their ethics when working in foreign areas. We are judged on the actions we do when no one is looking, so we should make an effort to improve ethics and contribute to the communities in which corporations are located. For now on, think about where a product has came from and if there was any blood shed for it. Lets move forward in making international corporations more ethical and reverse the negative effects of globalization because what we do today will affect what happens tomorrow and future generation.

Bibliography Coca-Cola Company. (2011). 125 Years of Sharing Happiness. Retrieved 5 9, 2012, from Coca-Cola Company History: http://www.thecoca-

colacompany.com/heritage/pdf/Coca-Cola_125_years_booklet.pdf Coca-Cola Company. (2011, 3 22). Press Releases. Retrieved 5 9, 2012, from The Coca-Cola Company Press: http://www.thecoca-


Coca-Cola Company. (2012). Regional and Local Foundations. Retrieved 5 9, 2012, from The Coca-Cola Company Foundations:

http://www.thecocacolacompany.com/citizenship/foundation_local.html Newspaper, T. E. (2008, 7 3). The Economist. Retrieved 5 9, 2012, from Index of Happiness: http://www.economist.com/node/11670946

McConnell, T. (2010, 12 15). Is Your New Mobile Phone Made With Conflict Minerals. Retrieved 5 9, 2012, from Global Post : http://www.globalpost.com/dispatch/africa/101214/mobile-phonesiphone-congo-war-conflict-minerals Peston, R. (2012, 3 30). BBC. Retrieved 5 9, 2012, from News Business: http://www.bbc.co.uk/news/technology-17557630

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