Multinational Corporations in the Developing

World

— U.S. President Abraham Lincoln, Nov. 21, 1864 (letter to Col. William F. Elkins) Ref: “The Lincoln Encyclopedia”, Archer H. Shaw (Macmillan, 1950, NY)

“I see in the near future a crisis approaching that unnerves me and

causes me to tremble for the safety of my country. ... corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavour to prolong its reign by working upon the

prejudices of the people until all wealth is aggregated in a few hands and the

Republic is destroyed.”

Fact: Of the 100 largest economies in the world, 51 are corporations

while only 49 are countries, based on a comparison of corporate sales and

country GDPs

Definition:A firm which has the power to coordinate and control operations in more than one country, even if it

doesn’t own them. Multinational corporation (MNC) or transnational corporation (TNC) is a

corporation or enterprise that manages production or

delivers services in more than one country.

MNC’s Structure

1. Horizontally integrated multinational corporations manage production establishments located in different countries to produce the same or similar products. (example: McDonald's)

2. Vertically integrated multinational corporations manage production establishment in certain country/countries to produce products that serve as input to its production establishments in other country/countries. (example: Adidas or Nike, Inc.)

3. Diversified multinational corporations manage production establishments located in different countries that are neither horizontally nor vertically nor straight, nor non-straight integrated. (example: Best Western or Hilton Hotels)

Multinational corporations can be divided into 3 broad groups according to the configuration of their production facilities:

Ethical Issues?

Treatment of employees

Transparency to consumer

MNC government influence

MNC governance

Negative Effects

• Enforce national laws

• Tax competition

• Market withdrawal

• Patent

• Lobbying

• Government control

Benefits• Generate job and

income

• Training of local workers in new & transferable skills

• Technology transfer

• Development opportunity

• Educational opportunities

Multinational Corporations and Women’s Health in Developing

Countries

Role of MNC’s in Developing World

• Why are women hired?

• Control over Women-Human Rights Injustices

• Women as Second Class Citizens

• Lower labor costs

Affect on Women’s Health

• Women’s Health Expendable

• Health Problems

• Lack of Adequate Health Service

Spirits of Resistance

• Women Factory workers in Malaysia

• Their methods of resistance

Maquiopolis

• City of Factories

• South of US-Mexico Border

Nestle and Bottle Feeding

• Promotion of Infant Formula

Pharmaceutical Companies

Top 10 Drug Companies

• Johnson and Johnson• Pfizer• Bayer• GlaxoSmithKline• Novartis• Sanofi-Aventis• Hoffmann- La Roche• AstraZeneca• Merck & Co.• Abbott Laboratories

Pfizer

• Unapproved Drug “Trovan” given to children suffering from cholera, measles, and bacterial meningitis in 1996. – 5 children died– Lawsuit claims drug given without parental

consent and that Pfizer was using outbreak to test their drug

“Panel Faults Pfizer in '96 Clinical Trial In Nigeria” - washingtonpost.com May 7, 2006

Novartis

• Challenged India’s patent law which allows India to refuse recognition of re-patenting of modified drugs. – Court rules that lawsuit was a threat to

those suffering from HIV, Cancers, and Diabetes and those who are too poor to afford medications

“India's cheap drugs under patent threat” BBC Feb 5, 2007

Hoffmann- La Roche

• Accused of monopolizing the production of oseltamivir (avian influenza drug). – Philippine Health Secretary said drug is

stockpiled in 1st world and not easily available in countries that need it most in SE Asia.

Hoffmann-La Roche allowed other companies to produce oseltamavir on 10/20/05

“Why Roche Released Tamiflu” Time Oct 19, 2005

Abbott Laboratories

• Thailand created its own version of “Kaletra” so Abbott Labs decided not to introduce any new medications to Thailand– Intellectual property rights

“Abbott pulls HIV drug in Thai patents protest” Financial Times Mar 14, 2007

Intellectual Property Rights

• 20 years– Allow for company to make money to offset

costs of innovation

• Generics after

Doha

• TRIPS (Trade-Related Aspects of Intellectual Property Rights)

• WTO commitment to promoting health

• 2001, the Doha Declaration’s goal was to reaffirm WTO members going around patent laws for public health purposes/emergencies.

“Doha Declaration explained”-WTO http://www.wto.org/english/tratop_e/dda_e/dohaexplained_e.htm

Economic …

A Look At The Economics…

• In-depth inquiry into multinational company investment in developing countries

• 14 in-depth sector case studies focusing on 4 major developing economies:

• China, India, Brazil and Mexico• Foreign Direct Investment (FDI)• 5 sectors: automotive, consumer electronics,

food retail, retail banking and information technology/business process offshoring

Findings

• Capital, technology and a range of skills

• Improved standards of living prices, quality goods and more choice productivity and output led to an in

national income

• Muted impact on employment

Impact On Host Countries:

• If investment motivated by search for lower wage cost locations… sector productivity, output, employment

and standards of living

• If investment motivated by interest in expanding their market in host country…– Could be positive, but often came at cost to

incumbent, less productive companies

What The Future Holds…

Conclusion

This topic is an enormous topic, it includes such issues as economics, globalization, migration, women’s health, environmental

health, human rights, policy, conflict & politics, just to name a few…

Summary

• Description & Definition of the Issue

• Ways MNC’s Can Effect Women’s Health

• Example: Pharmaceuticals

• Economics

Bad News…

There are a lot of companies out there taking advantage of the local populations and environment.

Good News…

Every single day people are becoming activists and social entrepreneurs.

People are changing the way they think about business and the “bottom line”.

This is the direction we need to move in!

On a Positive Note, In Closing…

Further Resources…

• http://fora.tv/• http://portico.bl.uk/bipc/previous.html• http://www.anitaroddick.com/topics.php• http://iamanactivist.org/DoSomething.aspx• http://www.socialenterprise.org.uk/• http://www.internationalistmagazine.com/• http://www.mckinsey.com/mgi/• http://yaleglobal.yale.edu/globalization/• http://www.globalissues.org/• http://www.naomiklein.org/main