mnc

by KHINE MAUNG YI

Submission date: 01-Jun-2020 04:40PM (UTC+0800)

Submission ID: 1330839188
File name: 32352_KHINE_MAUNG_YI_mnc_8415_1093162490.docx (36.72K)
Word count: 3987
Character count: 22845
Contents
PartAQuestion(1) ................................................................................................................. 1
Part-BQuestion (2) ............................................................................................................... 3

Part A Question (1)

Changes in the global economy have led companies in emerging countries to focus on growth
and to shift their attention to overseas markets. To enter the international market, it is necessary
to understand the background of the industry in which a company operates andf he
environmental factors that comprise the company to achie›’e international success. lt is
necessary to identify factors that are directly related to the market (customer preferences and
preferences, purchasing habits). Prrxluct design in eJh country) and growth potential. Other
factors that need to be analyzed are country appeal, degree of protectionism, political factors,
public support, local suppliers and qualified personnel.

Globalization is represented by a global network of symbols t hat can improve business

models, corporaJstrategies, new technologies, production processes, corporate work mr›del
relocations, and new relationships between companies, suppliers and customers. Due to the
high level of local and international competition, outsourcing and relocation, domest ic and
international competition is becoming more intense. In response to increasing competition,
many companies are implementing international strategies in sales activities and
manufacturing of products and services. To choose the best globalization strategy, a strategist
(manager) who understands how to describe a company's status and conditions in a global
economic and business errvironment and is responsible for leadership, decision- making, and
results. 1s required. Generally speaking, change is the effect of change. The latter is to pay
something, take something or place it. That too is changing. Through a brief reflection, we
have noticed that things change over time, often they grow up, meet each other and become
different shapes, ages and deaths. Due to (in some cases) external or internal factors, the abos’e
may r›ccur in organisms or other important elements.

Organizations are not su bject to the atxive restrictions. The potential to influence change can
exist in our social, family, or work life, and can also impact our work teams and entire
organizations.
One of the most difficult obstacles companies face is recognizing that defining their business
model is less effective than it once was. Markets are changing, customer preferences, or the
emergence of new technologies are facing the difficult decision of companies to change their
surs’iv’al priorities..

In fact, few companies hav’e succeeded in changing the core of their business to maintain their
lix’elihoods, in fact reversing trends and recapitalizing.

An example of a company that is aware of market changes and has decided to ovenurn its
seemingly fatal destination is the International Business Machines Corporation (.IBM), after
its market has been robbed by Microsoft and Apple's competitors. Focused on the survis’al of
the industry.

Other companies that are trying to reform themselves to avoid disappearance and drive growth
include:

I . PayPal: The company's founder Max Levchin declared that he worked on encryption for the
book "Founder at Work" in 1995, and later became a money transfer service via a PDA. Almost
killed the company after many years of trial and error and overcoming fraud scandals.

2. Google: ln the first few months of its birth, the world's largest search engine didn't even hav’e
a business model. 1n fact, Wired magazine editor John Batelle pointed out that Google was a
low-profit company at the time and was in a state of loss. After earning some revenue from
selling enterprise-oriented search engines, a company in Mountain View (California) decided
to participate in digital adv’enising through AdWords in 2003.

Gr›ngle Reported Digital Marketing Revenues of $ 21 Billion in 2008, Changing How Digital
Content 1s Generated.

3. Facebook: Initially, unlike other social networks, Mark Zuckerberg's platform is for college
students only and can only be used if invited. However, as this limited t rowih of the
company, the founder decided in 2005 to make it public to anyone o›’er the age of 13 with a
valid email address. Facebook sold 1.6°/e stake to Microsoft for $ 240 million, and there are
rumors that the first public offering (IPO) bothered the network.
4. Y ouTube: When Google acquired the video platform for $ 1.6 billion in 2006, Fox News
said the service hadn't announced a net profit yet, and that 2008 advertising revenue was only
"$ 200 million". lt was However, according to data released by Mashable in March 2010,
Y ouTube's annual revenue has reached about US $1 billion. This was achieved by signing
cooperation agreements with content developers such as NBC, AB C, CBS, and also launched
a partnership program t hat allows popular users to share the advenising revenue generated by
their videos. Was.

Pay- B Question (2)

lntroduction : MNC’s outlook in general in Malaysia

According to a 2007-2009 FDI survey rele d by the United Nations Conference on Trade
Development (U NCTAD), Malaysia is one of the top 20 countries in the world to att ract reign
direct investment (FDI). Asia China and India the first two largest economies,
followed by the United States, Russia and Brazil. Among Southeast Asian countries, Malaysia
is the third largest FDI region after Vietnam and Thailand, ranking 6th and 12th respectively
in the overall ranking.

With multinational companies in more than 60 countries and inv’estments in more than 3,000
Malaysian manufacturing companies, Malaysia is captivated by its excellent business
environment, making it th rernier location for the global manufacturing and service
industry. There is. To do. I . Many of them are already reinvesting in multiple projects.

Malaysia has a strong information structure and infrastructure, a well-educate ultilingual

workforce, and a large multinational corporation (MNC) consisting of large foreign
companies and many multinational corporations. 1 this this is an att ractive service
organization. Currently, 1052 regional organizations are approved, including 67 business
headquarters, 182 international procurement centers, 29 regional distribution centers, 579
representative offices and 195 regional offices. The main sources of foreign investment are
the United States, Germany and Japan.

Part 1: Economic and Government’s Policies - MNC’s strategies concerning trade,

foreign direct investment and taxaDon of state revenues.
Malaysia is a developing country. Ma Ritz --- Silicone Aha, ni agriculture and commodities
ni in the 1960s Kara, Hl-Te ku, knowledge Bakelite-su, capital intensive industr y ni branch
, Has grown up. Over the last 40 yes, the structure of M alaysia's econom y has changed to
something terrifying. Malaysia is often called a "lucky coup" because of its wealth of
minerals and fertilizer dragons, so it's still stopped. M min Yeah Yeah Yeah Yeah Yeah
Yeah Yeah Yeah. 1. The ambition of output is high-tech, knowledge-based, capital-intensive
industries.

The economic and financial crisis of mid- 1997 hit many countries in the Asia-Pacific region,
Lading to a currency crisis and the collapse of Malaysia's stock market, further demonstrating
the strength and resilience of the Malaysian economy. With the help of selecti›’e forex control
and the Ringgit, Malaysia has recovered and moved in the direction of economic recovery.

Large multinational companies are likely to outsource core and non-core activ ities, thereby
increasing investment opportunities for support.

The tendenc y of large multinationals tend to outsource their core and non-core businesses
provides an opportunit y for investment suppl services. Malaysia continues to enjoy a healthy
foreign trade surplus, low unemployment, strong international reserves and high domestic
savings. (Source: www.mida.gov.my, October 14, 2007)

Government’s policies

Government policies that maintain a business environment and provide opportunities for
growth and profits make Malaysia an attractive manufacturing and export hub for the
region. Malaysia's Private Sector Becomes Public Sector Partner to Achieve National
Development Goals.

A major factor in attracting investors to Malaysia is the government's commitment to

maintaining a business environment that provides companies with growth and profitabilit y
opport ties. The Government's ongoing commitment demonstrates this commitment to
getting feedback from the business community through consulting channels, such as regular
government-private sector dialogue. These allow different business communities to express
their opinions and develop relevant government policies.

Liberal Equity Policy

Generally speaking, Malaysian manufacturing foreign investors can hold l00*/c stakes
projects that export at least 80°/c of their products. However, since June 17, 2003, all
investments in new and existing companies are investments in expansion / diversification
projects and can hold 100°/c foreign capital regardless of exports.

AttracDve Tax Incentives

The ccir{xirate tax rate in Malaysia in 2007 was 2 , which is very attractive. Both resident
and non-resident companies adopted a tax rate of 26°/e in 2008 and further reduced it to 25°/e
in 2008. Malaysia also offers a wide range of tax incentives for manufacturing projects under
the Investment Promotion Act and Income Tax Act of 1986. In 1967, the main priorit y
policies were “pioneer status”, “investment tax preference”, “reinvestment preference”,
“tech industry preference” and “strategic preference”. Permanent projects and incentives for
foreigners to establish international / regional serv’ice businesses.

Employment and labor market

Malaysia profs investors with a young, educated and productive worWor hose costs
are competitive with other Asian countries. Mal aysia's workforce is the highest in the region,
and the government continues to support human resource development in many areas.

Industrial Training

In 1993, the Government launched a Human Resource velopment Fund to encourage

private sector training, retraining and skill development. The National Vocational Training
Commission, under the Ministry of Human Resources, is responsible for coordinating the
planning and development of a comprehensive system of vocational and industrial training
programs for all public training institutions. To date, there are over 700 standards for
certificates plomas, and higher qualifications. In addition to the increase in pu blic training
institutions to meet the increasing demands of the industrial sector between the Malaysian
government, businesses and foreign governments.

Infrastructure development

Malaysian industry is mainly distributed in more than 200 industrial zones or parks and 13
free industrial zones (FIZ) in the country. State and pris’ate developers are constantly
developing new sites and these cds are equipped with road, electricit y, water and
telecommunications infrastructure to meet demand.
FIZ is an export proces g zone designed to meet the needs of export oriented industries.
Companies in the FTZ are allowed duty-free imports of raw materials, parts, components,
machinery and equipment directly required in the manufacturing process. In areas without
a FIZ, companies can set up licensed manufacturing warehouses (LM Ws) that have similar
equipment to those that FIZ companies enjoy.
 Part 11 : Industrial Harmonies and Challenges for Trade Union

Violation and Lack of law enforcement

Only about 8°/c of the labor force joins the union. Trade unions seek to maintain their
independence from the government and political parties, but government control is
everywhere and exten to the union's internal affairs. The Malaysian Trade IN nion The
Federation covers the private and public sectors and has 500,000 members.It is not a
recognized legal union.Except the High Court agrees. to 36 months to resolve the request is
not uncommon, especially in the case of dis tes.MTU C cited DGTU's case of arbitrarily
refusing to organize and bargain with over 8,000 manufacturing workers in the past 36
months.At the end of 2006, MTtJC cited many cases of union unions refusing to approve
unions.

Employers often face the challenge of requiring the Minister of Labor to approv’e unions,
and the High Court and Appeals Court are hearing many cases.

Limited social security for workers

No miniziiiizii u'age four

Since there is no minimum wage standard in Malaysia, multinationals are willing to work
long hours and their salaries are so low that they intend to hire more foreign workers than
local workers.

The government has no reason to postpone the adoption of the minimum wage law that
applies to all workers. Employers of many multinational companies take advantage of the
unjustified benefits of wage restrictions without a minimum wage requirement. hundred.

Refusal on retrenchment fund

The economic Jvironment is usually an unpredictable cycle of prosperit y and decline,
which makes it difficult for workers to plan their careers and the future of the family in a
clear way, because they do not know when they will lose their lix’elihood.

As the participation of the privy sector in national economic activ’ities becomes more and
more imponant, and the scale of public sector participation in infrastructure development
and services decreases, workers' fear of the unknown not only intensifies, but also has a
serious impact on sex. The donation will increase at a rate of 2 ringgits per worker per
month.The current donation of 5 million SOCSO members can generate 10 million ringgits
per month, or 120 million ringgits per year.

Trade union rights-migrant workers inDmidated to not join trade unions. There are
approximately 2.5 to 3 millioJmigrant workers in Malaysia, of which 1 .8 million ha›’e been
recorded. Migrant workers (as of September 2007, nearly 2 million) are prohibited from
joining trade unions. The Ministry of Human Resources has announced that migrant
jgprkers can join unions at work, but the immigration authorities issuing work permits
strictly prohibit migrant workers from joining unions. Employers stipulate Je conditions
for not joining a union. The Department of Labor has not taken steps to rectify this
conflicting policy.
Most migrant workers from all parts of Southeast Asia and South Asia, if any, work long hours
at very low wages and often suffer from oral and physical abuse. MTUC continues to demand
and continue to insist on this right to gix’e migrant workers the full right to form unions and
unions. The migrant worker registration system also prevents workers from asserting their
rights. Employers have full discretion to dismiss workers for almost any reason (ITU 2007
Annual Trade Union Violation Investigation

Efforts and Progress made in realising the Principle and Right

ln 1 988, r the successful lobbying of a IN.S. semiconductor multinational company in
Malaysia, the Malaysian cabinet lifted the trade union ban on the ectronics industry,
limiting trade union registration to internal trade unions. did. The Cabinet, through the
Human Resources Minister, instructed the DGTU to grant only to trade unions within the
electronics industry. This is a follow-up of the DGT U's decision made in 1976, where
electronics and electrical equipment are divided into two divisions, so that electronic
workers are effectively subsidized by the established Electric lndustr y Union (EIW U). You
cannot participate.

allowing the decision of the High Court in 1989, the first internal trade union was revoked.
In this case, the company changes the business registration number. The court niled that the
company has become an "independent body." The union broke up. The trade union
dismissed the appeals court in 2004 and dismissed the suit. In 2005, t he Trade Union
Federation revoked the registration of an internal trade union on the grounds of a coun
decision.
The union was not res’oked under the " Union Law" of 1 959. (See 2007 AR Gov’ernment
Statement). After deregistration, the worker representatives established a program
committee in 2005 to establish the Electronic Industry Union (EIEU), but the grou p was
rejected by the DGT U in 2007 for technical reasons. The Program Committee has forwarded
another application to the DGT U, but since July 2007 it has been pending registration by
the government.

A multinational company founded a sap in Malaysia in 1974. for 30 years (in the second
generation), wr›rkers have no unions. In the last 36 months, DGTU has arbitrarily rejected
the organization and collective bargaining rights of more than 8,000 workers from the
following manufacturing companies: ln these companies, unions accepted members, but
employers DGT U deprives the union of its collective bargaining power, as the union is
represented by the DGTU.

Below is the list of MNCs companies which refuse the formaDon of union

Metal Industry Employees Union

(1 ) Ueda Plating (M) Sdn. Bhd. 60 members

(2) Hiroshige (M) Sdn. Bhd. 713 members

(3 Diarnet Klang (M) Sdn. Bhd. 96 members

(4) Soritsu Technology (M) Sdn. Bhd. 135 members

(5 Kobe Precision (M) Sdn. Bhd. 1 60 members

(6) Kawamura (M) Sdn. Bhd. 67 members

(7) NSK Micro Precision (M) Sdn. Bhd. 294 members

 NaDonal Union of Petroleum & Chemical
Industry

1158
(8) Shin-Etsu Polymer (M) Sdn. Bhd. members

(9) SNC Industrial Laminated Sdn. Bhd. 268 members

(10) W.R. Grace Specialty Chemical (M) Sdn. Bhd. 5 I members

(II) Ryoka (M) Sdn. Bhd. 272 members

(12) Takahata Precision (M) Sdn. Bhd. 494 members

Electrical Industry Workers Union

1079
(13) M itsumi (Segamat) Sdn. Bhd. members

1670
(14) Matsushita Electronics Corp (M) Sdn. Bhd members

(15) Malaysian Appliance Components Sdn. Bhd. 334 members (General

Electric)

Even in situations where the DGTU has ruled infavour of the unions the
following employers cited the restrictive provisions of the trade union act
to challenge his decision at the High Court and Court of Appeal :

(16) Top Thermo Manufacturers Sdn. Bhd.

 (17) Senju Metal Industries Sdn. Bhd.

(18) Kiswire Malaysia Sdn Bhd.

(19) Pacific Quest (M) Sdn. Bhd.

(20) Dipsol Chemicals Sdn. Bhd.

(21) Syarikat Marulee (M) Sdn.Bhd.

(22) White Horse Ceramic 1ndustries Sdn. Bhd.

More than 2,000 employees of the aforementioned company were deprived of collective
bargaining rights before the court ruled.

Many multinational comp s take du bious and unethical steps in the name of
globalization to circum t union recognition and refuse to negotiate with unions. Many
multinationals also use judicial review as a way to lead to long-term resolution of labor
disputes.

Japanese and Korean multinational corporations (MNC s) strongly oppose trade unions.
Japanese employers persuaded the secretary-general of the union sector to persuade them
to remove more than 3,000 rkers from their union members. Despite the inajorit y of seats,
trade unions that organize metal, electrical, chemical, and non-metallic mineral pr‹xtucts
have been denied approval. Japanese multinational corporations haveJso filed lawsuits
with the High Court, usually avoiding union recognition, which lasts three to five years.
(lCFTU , 2003 Annual Survey of Trade Union V iolations)
In other cases, in 2006, DGTU rejected State Petrcichemical Workers' Union claims against four
companies in the Kaneka Group. The company rejected the u n's approv’al and the slower
formal process also meant that the application was postponed for five years, by which time
many of the original union members had left. Therefore, the union no longer has enough
members to be recognized.

1. BAT on a Union Busong Mission

British American Tobacco has launched a series of activities to kill the 44-year-old British
American Tobacco mployee Union, which represents the company's 629 employees. The
company classified pr‹x1uction technicians as process experts and deprived them of the right to
become members. The union stated in its allegation to DGlR that, except for the name change,
its responsibilities were essentially the same. They are still producing machines. The y reduced
the number of workers and increased the amount of work, so they raised wages.

DGlR is still conducting research to identify the identities of the 70 production technicians
reappointed on January 9, 2007, but the collective agreement should not cover all 200 sales and
promotional personnel. Notified the union.

British American Tobacco has also announced plans to outsource some of its traditional
activities t hat eliminate the need for positions such as Bryrnan, chargers and electricians. 109
einplo yees will be dismissed. As a result, the number of members has decreased by 60°/c. Most
members of the president and trade union executive committee are no longer members. The
actions of the British American Tobacco are clearly aimed at weakening and killing the internal
unions.

Of course, when Human Resources Minister Datuk Nato Fong Chan Onn decided that the
company's decision not to allow production workers to cont e union membership was correct,
the BAT trade union's hopes for justice were shattered. The Minister's decision underscores the
power and influence of multinational corporations in the country.

Then, on February 28, several long-term technical and maintenance service employees were
denied access to the factory building by security personnel without prior notice. All of them
prev’iously rejected the company's appeal to leave through a v untary segregation scheme.
After a strong protest from the union, the company instructed all eight employees to stay home
with paid leave until the end of March. Company behavior indicates that these employees will
be fired in the name of layoffs.

British American Tobacco is c ently asking another company to take over the maintenance
Jrvice, and the two companies have brought their own staff. MTUC has asked the HR Director
to urgently intervene to terminate the contract. On ctober 10, 2007, MTUC filed a complaint
with the International Labor Organization and the OECD.

Nature of complain against the company:

Unfair labour practice and anti Union activities Union

busting activities

Failure to commence Collective Bargaining with B ATEU

Background-The British American Tobacco Employees Union is a trade union of workmen,

duly registered under the Trade U nion Act 1959 to represent employees in British American
Tobacco (Malaysia) Bhd and its subsidiary companies.

British American Tobacco (M) Bhd is a subsidiary of UK based British American Tobacco
PLC.

Summary of the ViolaDon by Top Thermo Manufacturers(M) Sdn Bhd.

Likewise BAT, the Top thermo manufacturing (M) Sdn. Bhd is a Japanese based company
also practiced the union busting tactics. lt has been extremely uncooperative and going to
great length to deny their employees the right to be represented by union. In four years of
the workers joined the industrial union the company has been:

Dismissed the organizer;

Openly adopted discriminatory practices against union members;

 Refused to extend cr›nperation to Human Resources Ministry officials;

Obstructed the process of recognition;

Refused to accept the departments niling on membership scope of the Metal Industry
Employees’ union;

Continue to defy the human resources Minister’s order to recognize the union; and

Has caused frustration and delay by abusing the legal process.

In general, multinational companies play an important role in Malaysia's employment trends.

This is because unions are less dense and lead to the development of internal units. Also, the
labnr movement is now faced with many problems and is generally said to pose a major
challenge to the ability of workers to protect their interests. These issues are:

Since the 1970s, the power and influence of multinational corporations (MNCs) has been linked
a strong anti-union position. The y limited union growth and impact, deleted effective
imurn standards, blocked minimum wage legislation, undermined collective bargaining,
and flooded the labor market with foreign worker.

Trade liberalization and the implementation of deregulated technology caused by globalization

and competition do not adequately consider the impact on the workforce.

Failure to ratify Convention 87 on Core Labor Standar and Freedom of Association and
Freedom of Association, and to bring related laws, policies and practices into line with the spirit
of Conventions 87 and 98.
In multinational companies, subcontracting / outsourcing work has become a trend, and trade
union movement and differentiation at the trade union lev’el are also weakening.

Unfavorable domestic labor laws that exclude trade unions from many economic activities

The bargaining power and in nce of multinational corporations has increased significantly.
The claim of multinationals is that labor standards and workers' rights clauses drive out
investors.

Large-scale reorganizations, ongoing M & A (especially multinational

corporations), and continued shrinking scales are deteriorating global employment,
labnr and living conditions.

Traditional work systems are changing, with an increasing focus on flexibility and
reorganization, resulting in a flat, work-intensive organization.

Environmental protection

Unethical employers engage in harmful “competitive” competition and reduce costs. Result:
unstable work

More and more women join the workforce; women suffer from discrimination, low wages,
sexual harassment, and p‹xir working conditions.

Violations of trade union rights.

References

http://ic‹ipil‹iledu c‹ilion .biz/index.php'?seclion=5&sub=2c

Global Insight World Inc ., Industry Service database; 2005

Athukorula, Prema-C hnndrn und Jayant Menon. DATE. « Export-led Industrial nation, Employment and
Equity.”

Joseph Stig litz, Joseph. Sep 13, 2007. “The Malaysian Miracle.” Thu Guardian..

Yosuf, Zainal Aznarn and Deepak Bhattasali. 2008. “Economic Growth and Development in Malaysia:
Policy Making and Leadership.” Commission on Growth and Development

Prime Mini ster Mahathir. Foreword or Master Plan,Govemment or Malay sin ; www.epu.jpm.my

The Knowledge-bnsed Economy Master Plan ; www.epu.jpm.my

The Science und Technology Sy stern ofi Malaysi a ; portal.unescn.org

Ministry of Science, Technology & Innovation website ; www.mosti .gov.my

Multimedia Super Corridor R&D Grunt Scheme ; www.mscrnalaysia.my

The National lnno vation Model ; www.mosti .gov.my

MCiSTl Facts & Figures 200b; Ministry or Science, Technology & Innovation; www.rnosti.gov.my

Yue, Chi a Siow. DATE. “Singapore Towards a Knowledge-based Economy.”

Information on A*Star; www.a-star.edu.sq
mnc
ORIGINALITY REPORT

23 %
SIMILARITY INDEX
17%
INTERNET SOURCES
2%
PUBLICATIONS
18%
STUDENT PAPERS

PRIMARY SOURCES

www.global-labour-university.org
1 Internet Source 26%
documents.worldbank.org
2 Internet Source 5%
Submitted to Postgraduate Schools -
3
Limkokwing University of Creative Technology
1%
Student Paper

chargify.com
4 Internet Source 1%
Submitted to Asia Pacific University College of
5
Technology and Innovation (UCTI)
1%
Student Paper

Submitted to Northcentral
6 Student Paper 1%
icapitaleducation.biz
7 Internet Source 1%
Submitted to Wawasan Open University
8 Student Paper 1%
 white.oit.org.pe
9 Internet Source 1%
Submitted to Victoria University
10 Student Paper 1%
Submitted to University of East London
11 Student Paper 1%
Submitted to University of Wales central
12
institutions
1%
Student Paper

Submitted to University of South Australia

13 Student Paper 1%
Submitted to HELP UNIVERSITY
14 Student Paper <1%
Submitted to Universiti Utara Malaysia
15 Student Paper <1%
Submitted to University of Central England in
16
Birmingham
<1%
Student Paper

Submitted to University of Hertfordshire

17 Student Paper <1%
Submitted to Grenoble Ecole Management
18 Student Paper <1%
lilyallenfanpage.gportal.hu
19 Internet Source <1%
20
Submitted to Taylor’s Education Group
Student Paper

21
Submitted to Westminster International College - Kuala
Lumpur
Student Paper

22
Submitted to The University of the South Pacific
Student Paper

23
Submitted to Royal Melbourne Institute of Technology
Student Paper

24
dukespace.lib.duke.edu
Internet Source

25
Submitted to London School of Commerce
Student Paper

26
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Student Paper

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