Multinationals-Exploiting attributes of different locations Essay

Multinationals-Exploiting attributes of different locations - Essay Example Foreign Direct Investment in many developing countries have stunted the growth of indigenous industries and also resulted in large scale exploitation of the resources of that particular region. Political Economy-cases and methods of multinational exploitation Multinational companies principally exploit the attributes of different locations either by following labour laws that do not reflect the current sentiment in the market or by monopolising the market in such a way that competition from the native country is slowly relegated. Unfair practices in cahoots with the government also result in large scale exploitation of natural resources. Some of the cases and theories of exploitation by multinationals have been discussed. 1. One case study of the garment industry from around the world is carried out to ascertain the working conditions of those employed in this industry. The industrial term for such factories are ‘sweatshops’ which employ workers at low wages and force th em to work in unhygienic conditions for a long period of time. It is said that the garment industry in Central America employs 80% women between the age group of 14-26. At Doall, a Korean company operating in El Salvador that makes the famous LizWear and Liz Claiborne fashions; women are made to work from 6.50 am to 10.30 pm with two half hour breaks, one for lunch and the other for dinner. (VIDEA, 2000 ) In the rush hour months they have to work for 7 days week clocking roughly 90 hours. To prevent them from sleeping, the company also encourages them to take a ‘No Doze’ pill which is a highly unethical practice. For the first eight hours these workers are paid 60 cents an hour and 1.20 dollars per hour as overtime. To sum up a worker would be paid 8.40 dollars for an arduous 11 hour shift which is considered far below the minimum wage requirement. (VIDEA, 2000) The Liz Claiborne collection is, however, marketed as very modern, fashionable and sophisticated dress around the world. However if indications are to show the working conditions at the Doall factory in El Salvador is anything but sophisticated. Apart from low wages, the working conditions are pathetic. Air that is full of dust and lint cause breathing problems, skin rashes and other kind of allergies. Bathroom breaks are limited and workers are obligated to work overtime. Failure to adhere to these norms results in suspension or withholding of ‘attendance’ bonuses. Apart from these excesses, new workers are forced to take blood and pregnancy tests to prevent employing pregnant women. Women in the ironing and cleaning sections are forced to stand all day causing inflammation in the feet and working ambience is especially unpleasant with supervisors yelling at them for not being able to meet targets. (VIDEA, 2000) Employers know that any kind of trade unionism with the nature of work involved would cause severe problems for the company. Hence any kind of activity to that effect either by way of organization or by distributing trade union literature is considered subversive. Studies carried out by National Interfaith Committee for Worker Justice Workers in factories of Lavapant, Vaqueros and Cantabria indicate that workers were not paid overtime even though they had worked over 60 hours. This is in violation to the Mexican

Case Analysis Study Example | Topics and Well Written Essays - 1000 words - 5

Analysis - Case Study Example From the first analysis and using the x-factor tool given to evaluate different possibilities it is observed that when the sales is at 422,733 million, the cost of goods sold is directly affected at 38% million , the cost of goods sold is directly affected at 38% million , the cost of goods sold is directly affected at 38% million. On the other hand, the cost of goods sold is directly affected at 38% to be 160,639 million. For a business to operate there are operating expenses that always has to be incurred. These include rent, internet, transport, flights, advertising, airtime among other things. These factors are consolidated into operating expenses which in this scenario is directly affected by sales at 50% meaning that half of the operating expenses are geared towards sales. As the sensitivity analysis tool suggest, when cost of goods sold is 35% of sales, the company runs into a profit of 28,787million but when the cost of goods sold is at 45% of sales the company runs into a debt of 2102 million. This happens since the company is having a lot of spending to increase sales. The breaking point ratio is at 44% of sales since no debt is made and the company has 987 excess cash for the company. Therefore the company should at least invest 200 million to offset this change. One of the assumptions made in this analysis is that interest expense is directly affected by the debt the company has. The second assumption is that the debt majorly consists of loan i.e. both long term and short term loans. Another assumption is that sales do not vary at this point and that incase it does, the effect is insignificant. In addition the current assets are also deemed a factor that affects debt and excess income in the company. There is also an assumption that total assets less total liability will give a balancing figure which will either result to a debt or an income. Moreover, we