Ch.11 Multinational Corporations By: Samuel Boyd Aziza West Josh Wilson
What is a Multinational Corporation? • Multinational Corporation is an entity head-quartered in one country that does business in one or more foreign countries. • Ex. Coca-Cola
Five Tiers of Internationalization • Export Sales • Foreign Sales • Licensing • Direct Investment • Global Production
Key Terms • Liberalization • Trans National corporation • Transnational index
Foreign Direct Investment • FDI are funds invested by an MNC in one nation for starting, acquiring, or expanding an enterprise in another nation. • Portfolio investment is limited, speculative purchase of stocks and bonds in a foreign company by individuals or mutual funds.
International Codes of Conduct • International Codes of Conduct voluntary aspirational statements by MNCs that set forth standards for foreign operations. • Sullivan Principals • Corporate Codes • Industry Codes • Multilateral code
Key Terms • Snowball clause • Universal Declaration of Human Rights
The OECD Guidelines for Multinational Enterprises • General Polices • Contribute to economic, social, and environmental progress with a view to achieving sustainable development. • Respect the human rights of those affected by their activities consistent with the host government’s international obligations and commitments.
The Global Compact Principles • Human Rights • Business should support and respect the protection of internationally proclaimed human rights. • Labor Standards • Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.
Cont… • The Environment • Business should support a precautionary approach to environmental challenges • Anti-Corruption • Business should work against all forms of corruption, including extortion and bribery.
Key Terms • Blue washing is the act of corporation cloaking its lack of social responsibility by insincere membership in the UN Global Compact. • Communication on Progress is a report from a corporation about its actions in support of the 10 Global Compact principles.