Destination India -

The multinational companies in India represent a diversified portfolio of companies from different countries. Though the American companies - the majority of the MNC in India, account for about 37% of the turnover of the top 20 firms operating in India, but the scenario has changed a lot off late. More enterprises from European Union like Britain, France, Netherlands, Italy, Germany, Belgium and Finland have come to India or have outsourced their works to this country. Finnish mobile giant Nokia has their second largest base in this country. There are also MNCs like British Petroleum and Vodafone that represent Britain. India has a huge market for automobiles and hence a number of automobile giants have stepped in to this country to reap the market. One can easily find the showrooms of the multinational automobile companies like Fiat, Piaggio, and Ford Motors in India. French Heavy Engineering major Alstom and Pharma major Sanofi Aventis have also started their operations in this country. The later one is in fact one of the earliest entrants in the list of multinational companies in India, which is currently growing at a very enviable rate. There are also a number of oil companies and infrastructure builders from Middle East. Electronics giants like Samsung and LG Electronics from South Korea have already made a substantial impact on the Indian electronics market. Hyundai Motors has also done well in mid-segment car market in India.


Why Are MNCs In India

Following are the reasons why MNC consider why India as a preferred destination for business :

Huge market potential of the country

FDI attractiveness

Labor competitiveness

 Macro-economic stability

There are a number of reasons why the multinational companies are coming down to India. India has got a huge market. It has also got one of the fastest growing economies in the world. Besides, the policy of the government towards FDI has also played a major role in attracting the multinational companies in India. 
For quite a long time, India had a restrictive policy in terms of foreign direct investment. As a result, there was lesser number of companies that showed interest in investing in Indian market. However, the scenario changed during the financial liberalization of the country, especially after 1991. Government, nowadays, makes continuous efforts to attract foreign investments by relaxing many of its policies. As a result, a number of multinational companies have shown interest in Indian market.


MNCs And Globalization -

Globalization has accelerated in recent years, a development that has significant implications for the regulation and governance of international business, trade and investment. International business implies no fundamental shift in the underlying principles of trading or business functions but simply more cross-border transactions. In simpler terms it includes all commercial transactions – private and governmental – between two or more countries. Private companies undertake such transaction for profit; governments may or may not do the same in their transactions. The world has seen a tremendous increase in the global transactions and foreign trade in recent years. The main reason behind this is that now more and more countries are getting engaged in trading with each other in order to increase their profit or sales or protecting them from being eroded by competition. The main objectives which are influencing the companies to engage in international business are expansion of sales, acquiring resources, minimizing competitive risk and diversification of sources of sales and supplies (Johnson & Turner, 2003). Besides these there are other few factors like economic factors, cultural factors, technological factors, and social factors which have influence to a greater extent. The emergence and activities of transnational and multinational enterprises had impacted to a huge extent on the concept of globalization, and multinationals have played an important role. Given their international reach and mobility, prospective countries, and sometimes regions within countries, must compete with each other to have MNCs locate their facilities (and subsequent tax revenue, employment and economic activity) within.


Tax competition-

Multinational corporations have played an important role in globalization. Countries and sometimes subnationa regions must compete against one another for the establishment of MNC facilities, and the subsequent tax revenue, employment, and economic activity. To compete, countries and regional political districts sometimes offer incentives to MNCs such as tax breaks, pledges of governmental assistance or improved infrastructure, or lax environmental and labor standards enforcement. This process of becoming more attractive to foreign investment can be characterized as a race to the bottom, a push towards greater autonomy for corporate bodies, or both.

However, some scholars for instance the Columbia economist Jagdish Bhagwati, have argued that multinationals are engaged in a 'race to the top.' While multinationals certainly regard a low tax burden or low labor costs as an element of comparative advantage, there is no evidence to suggest that MNCs deliberately avail themselves of lax environmental regulation or poor labour standards. As Bhagwati has pointed out, MNC profits are tied to operational efficiency, which includes a high degree of standardisation. Thus, MNCs are likely to tailor production processes in all of their operations in conformity to those jurisdictions where they operate (which will almost always include one or more of the US, Japan or EU) that has the most rigorous standards. As for labor costs, while MNCs clearly pay workers in, e.g. Vietnam, much less than they would in the US (though it is worth noting that higher American productivity—linked to technology—means that any comparison is tricky, since in America the same company would probably hire far fewer people and automate whatever process they performed in Vietnam with manual labour), it is also the case that they tend to pay a premium of between 10% and 100% on local labor rates. Finally, depending on the nature of the MNC, investment in any country reflects a desire for a long-term return. Costs associated with establishing plant, training workers, etc., can be very high; once established in a jurisdiction, therefore, many MNCs are quite vulnerable to predatory practices such as, e.g., expropriation, sudden contract renegotiation, the arbitrary withdrawal or compulsory purchase of unnecessary 'licenses,' etc. Thus, both the negotiating power of MNCs and the supposed 'race to the bottom' may be overstated, while the substantial benefits that MNCs bring (tax revenues aside) are often understated.


Market Withdrawl-

Because of their size, multinationals can have a significant impact on government policy, primarily through the threat of market withdrawal. For example, in an effort to reduce health care costs, some countries have tried to force pharmaceutical companies to license their patented drugs to local competitors for a very low fee, thereby artificially lowering the price. When faced with that threat, multinational pharmaceutical firms have simply withdrawn from the market, which often leads to limited availability of advanced drugs. In these cases, governments have been forced to back down from their efforts. Similar corporate and government confrontations have occurred when governments tried to force MNCs to make their intellectual property public in an effort to gain technology for local entrepreneurs. When companies are faced with the option of losing a core competitive technological advantage or withdrawing from a national market, they may choose the latter. This withdrawal often causes governments to change policy. Countries that have been the most successful in this type of confrontation with multinational corporations are large countries such as United States and Brazil, which have viable indigenous market competitors.



Many multinational corporations hold patents to prevent competitors from arising. For example, Adidas holds patents on shoe designs, Siemens A.G. holds many patents on equipment and infrastructure and Microsoft benefits from software patents. The pharmaceutical companies lobby international agreements to enforce patent laws on others.


Disagreements With Corporations –

Activists argue that corporate globalization corresponds to a displacement in the transition from a highly industrial-based economy to one where trade development is connected with the financial deregulation on the basis of circulation of capital. An increasing number of diverse societies have been pushed into a market structure, leading to displacement. As this expansion has occurred, market-governed regulation has outrun the grasps of the state. The government cannot control the markets, widening inequalities have developed, and the corporations have gained strength. Activists have been recently pushing for a sort of globalization that claims to promote equality.


Counter Argument -

The defenders of corporations would argue that governments do legislate in ways that restrict the actions of corporations and that lawbreaking companies and executives are routinely caught and punished usually in the form of monetary fines. Factually, most amount to a small proportion on their gross annual revenue. However, the Tobacco Industries loss as defendants of a multi-state and Federal legal suit in the 1990's cost them billions of dollars and permanently disrupted their traditional marketing in the U.S.

In addition, from the perspective of business ethics it might be argued that chief executives are not inherently more evil than anyone else and so are no more likely to attempt unethical or illegal activity than the general population. Large multi-national corporations do continue to peck away at governmental regulations through in-house or contracted lobbyists that work closely with State and Federal legislators. So as corporate laws continue to lean in their favor, corporate members have improved portals to drive up company profits.


Alliances –

Anti-corporate activists may often ally themselves with other activists, such as environmental activists or animal rights activists in their condemnation of the practices of modern organizations such as the McDonald’s Corporation and forestry company Gunns Limited.

In recent years, there have been an increasing number of books  and films such as The Corporation which have to a certain extent supported anti-corporate politics.


Art Acitivism -

Political artist Billy Knows posted his "Greed" posters all across America and Europe in 2004 proclaiming Mickey the Rat as the new American icon. Another artist critical of socio political agendas in business is conceptualist Hans Haacke.


New Digital Media -

Media and digital networking have become important features of modern anti-corporate movements. The speed, flexibility, and ability to reach a massive potential audience has provided a technological foundation for contemporary network social movement structure. As a result, communities and interpersonal connections have transformed. The internet supports and strengthens local ties, but also facilitates new patterns for political activity. Activists have used this medium to operate between both the online and offline political spectrums.

Email lists, web pages, and open editing software have allowed for changes in organization. Now, actions are planned, information is shared, documents are produced by multiple people, and all of this can be done despite differences in distance. This has led to increased growth in digital collaboration. Activists can presently build ties between diverse topics, open the distribution of information, decentralize and increase collaboration, and self-direct networks.



Rise of Anti-Corporate Globalization -

Close to fifty thousand people protested the WTO meetings in Seattle on November 30, 1999. Labor, economic, and environmental activists succeeded in disrupting and closing the meetings due to their disapproval of corporate globalization. This event became a symbol as anti-globalization networks emerged and became strengthened. The experiences from the protests were distributed throughout the internet via emails and websites. Anti-corporate globalization movements have also expanded through the organization of mass mobilizations, including the anti-WTO protests, which were remarkably successful. In the United States, these movements reemerged after less attention was given to the war in Iraq, resulting in an increase in mass mobilizations.


The Aid of Technology -

Globally oriented and planned protests have benefited from the cheap, quick, efficient means of e-mail. This has also led to the creation of a global connection between alternative transnational counterpublics. Web sites created for mobilizations may not be designed to exist or be used permanently, but their use allows for easy access to resources and contact lists. Face-to-face coordination was also found to be complemented through internet use and has not replaced this aspect. The use of the telephone remains vital, particularly during conflicts that required interactive communication.


Technology & Cultural Politics-

For anti-corporate globalization movements, flexible local and global networks make up the most important forms of organization. Activists have preferred this flexible coordination between groups within a small formation. This includes intervallic meetings, commissions discussing concrete tasks, and project areas. Participation that is open is seen as more productive than representation. In some organizations, there are even no formal members. Instead, any person is allowed to participate as long as they agree with the networks basic beliefs, which includes a personal removal from capitalism and systems seen as similar to it.

The use of networking through technology is unevenly distributed amongst the organizations and movements. The groups with more available funds are able to incorporate newer technologies into the existing communication techniques. Smaller organizations with fewer resources, therefore, look for more innovative methods in order to take advantage of the low cost. Though the anti-corporate globalization movements may be viewed as unified, there exists numerous movements. Their goals may overlap with one another, but each differs on their targeted issues, political subjectivity, ideologies, culture, and organizational structure.