DO MULTINATIONALS CORPORATIONS OPERATING IN FOREIGN COUNTRIES HAVE ETHICAL OBLIGATIONS TO THE LOCAL LABOUR FORCE?

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DO MULTINATIONALS CORPORATIONS OPERATING IN FOREIGN COUNTRIES HAVE ETHICAL OBLIGATIONS TO THE LOCAL LABOUR FORCE?

“The moral economy is convoked to exist as a resistance of the free market economy the rise in the price of bread can equilibrate the supply and the demand of bread, but wont resolve the hunger of a nation.” Julio Boltvinik

Nike is one of the most successfully companies in the world, and it has the best market share of all the sports clothes and equipment (tennis shoes, t-shirts, jerseys, pants, backpacks, balls, etc) near 40% of the global market. Their income is much greater than many gross national products of non-developed countries.

Part of their success is based in the way of production so they just focus in the marketing of all the products. According to any publicity book is consider as a ‘mega brand’ because they spend more than US $1000 millions just in this aspect, so their imagotype is well known even if their logotype is not printed.

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Other aspect of the success is that Nike has not any producer plant, they licensed their products to maquilas plants (outsource), in that way the cost are lows in all the aspects because the most part of this kind of factories are at non developed countries where the workers has not plenty rights, and if they had, they aren’t respected. I will make reference to the Southeast Asian workforce and especially to the Mexican (Atlixco, Puebla) workforce. According to Herbert the multinational corporations will always chase profits, no matter how tragic the circumstances in which they are generated, in this case is right.

The problem at Mexico was the working conditions inside the manufacturer plant, located at Atlixco, Puebla. It was strategic located there because is a remote place that has no connections whit the rest of the state or the country, also this region has one of the lowest educational grades, so they can take advantage. Some peoples tried to get better working conditions and a free choice of union, but they were fired. The rest of the workers go to strike but it were dissolved by the local police. The situation was very tense by bought sides (workers vs. management) but when the media arrived the management changed radically their posture and accorded to cooperate and reinstall the workers.

The local, state and national governance had knowledge of this situation, but they didn’t do anything before the media arrived, even they ignore internationals advices. I guess because the corruption in my country is so hight that is easy to buy most governance peoples. Controlling abuses by transnationals can in part be archived by governments acting in concert.

The change was possible by the public opinion and public pressure. It is public input that makes the difference between standards that are respected and followed. Standards are forced through the media, like a watchdog to inform.

Thanks to all this kind of abuses and the sponsor of super stars, Nike’s income is over US $10 000 millions per year.

Under this aspect we can secure that Nike’s view concord whit Friedman, just want to maximise their profits and don’t want to spend any money in the socially responsible projects. Nike operate in Mexico because is cheaper, they are taxes incentives, and specially by the NAFTA (North American Free Trade Agreement) because Mexico has a key point thanks to all this kinds of agreements (Mexico has free trade agreement whit Europe, North South and Central America, and whit some Asian Countries), thanks to this they can triangulate operations to reduce international taxes fees. Also Manzanillo port is the shorter maritime route between America and Asia, so they can send and receive their products. Thanks to this Nike-Mexico is the most successful subsidiary of America.

Developed countries are not able to control foreign firms. Less developed countries are able, or are less able, to do so, especially when the firm has grater total sales than that country gross national product. In this order exist a public saying that make reference to US a developed country that take advantage of Mexico ‘… tan lejos de Dios y tan cerca de Estados Unidos…’ the translation is ‘faraway from God and so close of US”,

Nike are proud to have more than 1 000 employees in their 50 maquilas in Latin America, but their position is against all the actions that they made, they just want the profits and they just take care of itself. Although social benefits represented 4% of total remunerations in the Mexican manufacturing industry, 4% of the population employed in this industry did not enjoy economic benefits in the year 000.

And when the work environment is changing to benefit the work force, they just move into another country where the legislation is less demanding than the prior country. Exactly that happened to many Southeast Asian countries, they just keep walking. In Mexico happened the same, one big Nike plant moved to Guatemala, they said that was in order to a logistical restructure, but the real fact is that they move there because there were less demanding conditions to the enterprise; Nike follow the economic cost-benefit analysis, they make their counts and they decide to leave without care the employees and their families; an utilitarian analysis can take in considerations all the parts, and that will produce a better life living, in that form will take the best action… just dreaming…

This is an excellent example of Kant’s thought; self-interested motivation (the moving of the Nike’s plant in order to reduce the productions cost) is not compatible whit moral motivations (pay and act like they should do according to the legislation).

According to Drucker the multinational companies have no responsibility above the local law, but its SHOULD be face all basic social problems to improve the life status of their human force , this will be interest-yielding to multinational by a better being of the workers that will increase the productivity. A content worker produces more and better that one that is not. Provide benefits to local stakeholders groups must have been taken not only in the light of ethics, but also whit some vision.

Will be the bst to apply the principles of the Caux Round Table (CRT) because they try to make a better world, the bad news are that they are just words in the developing countries legislations and in many multinationals enterprises. I am not saying that Nike don’t have this “good intentions”, I am just saying that when they arrange one outsource to a develop country �Mexico in this case- they forget for the most principles.

To avoid all this abuses will be good to crate an international law or organism that supervises the conduct of all the multinationals, unfortunately is just a dream. If it is crated wont have any legal or judicial power, so will happen the same that whit the UN (most countries are members but actually the most powerful govern, and they don’t care about the resolutions, the clear example is the recent wars against Afghanistan and Iraq)

In Mexico exist many “commercial cameras”, their function is to stay alert of the situations of their branch enterprises, but they have just moral power so most of time they limit to make a recommendation but the plants has not an obligation to do so. The hardest sanction is to expulse them of the camera, and the biggest companies have the power to be over the camera, that is that is the case of Wall Mart and mayo others, principally transnationals.

It is fun, even sarcastic, that most Nike’s clothe is really made in all this developing countries, but they just do not put tag label, they send the production to other countries to do so and in that way can reduce taxes and in others countries just stick the tag and said that was made in the second place. I have a pair of pants that said that was made in Malaysia but also has a tag of Mexico.

Nike try to use a “moral guide” or “moral minimum” on different orders, based on the humans rights of the workers, they crated their code of ethics. Nike do this to solve the continuos demands of the globallyphobic, Even they did it and they are proud of it, in many places continues violating their own rules, they ate just descriptive ethics for the company.

Neither will be good for any company to fall in the ‘ethical Puritanism’ � that will be to forget the existing reason of the enterprise to focus just in the ethical results as goals - I am just saying that a solution is to paid a good living wage, even when this is not paid by local forms; in other words pay any as much as necessary to get competent workers, given the competitive situation of a particular region or country. Business can be conduced ethical, it should be, whit own parameters of conduct (responsibility, justice, human rights, tolerations, conducts, etc) really practiced.

The main point for the ethics of multinationals must be a human treat, not special treatment, just in terms of humanity and not in economical advantage; but at the real world, self-interest �unfortunately- is an aspect of the work of organizations dedicated to ethical standards in global business.

Maquilas are the places where multinationals made their products in Mexico. The most part of this kind of factors are in the textile branch.

sum HIROSHI TAKAHASHI. “Interview whit MDO of Nike Mexico Raúl García,”. El Universal - Financiero. April 00.

sum Grace & Cohen. ‘International Business Ethics’, Ch 11. of Grace, D & Cohen, S., Business Ethics Australian Problems and Cases (nd edition), (oxford University Press, Melbourne, 18)

sum Richard De George. ‘The internationals Business System, Multinationals, and Morality’, Ch 18 of Richard De George, Business Ethics, 4th edition, (Prince-Hall, New Jersey, 15), pp. 475-50.

sum ENESTYC Encuesta Nacional de Empleo, Salarios, Tecnología y Capacitación survey of the INEGI y la Secretaria del Trabajo witha representative sample of 5000 manufacturing stablishments in 11, 14 y 1. www.inegi.gob.mx

sum Ranney, D. (17) “NAFTA and Devalorization of Labor Power a U.S. Perspective” Momento Económico, , Julio-Agosto.

sum Letter to Mexican President Fox http//www.maquilasolidarity.org/campaigns/nike/kukdongletter.htm

sum JUST DO IT � BOYCOTT NIKE http//www.maquilasolidarity.org/campaigns/nike/index.htm

sum ‘JUST STOP IT’ Community Aid Abroad campaign http//www.caa.org.au/campaigns/nike

sum NIKE CORPORATE SITE http//www.nikebiz.com/

sum NIKE CODE OF ETHIC http//www.nike.com/nikebiz/invest/cg/img/codeofethics.pdf

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