Analytical essay globalization and trade

Document Type:Thesis

Subject Area:Engineering

Document 1

Multinationals provide and ensure availability of the necessary support and resources for nationwide socio-economic development, such as economic infrastructure and Foreign Direct Investment (FDI), which reflect in employment opportunities and improved standards of living among the host citizens. It is a fact that these corporations may, however, exert subtle or overt forms of exploitation upon their host countries (Kedia, Rhew, Gaffney & Clampit, 2016). This can be done through the introduction of relaxed codes of ethical standards that exploit the social, economic and development needs of these countries. The investments of these Multinational Corporations within their host countries is significant towards their economic growth and development, to the extent that host governments offer incentives such as tax exemptions and subsidies in order to attract more investments.

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Role of IBM in the Global Economy The primary role of any Multinational Corporation is to make profits, with the margins projected towards the expectations of shareholders. The globally integrated enterprise was envisioned through the workforce management initiative that saw to the improvement of its human capital in host countries. IBM is a world leader in Artificial Intelligence (AI) and enables clients to share data. The information technology services that the company provides are projected towards enabling businesses to have better outcomes, and for the shareholders and managers to make better decisions that not only reap massive profits, but also extend these benefits to their host countries (Vasudevan, 2018). IBM INDIA IBM India, a private limited company that provides information technology (IT) services, for the longest time, has been the leading multinational in India rating the highest number of employees, projected towards profitable growth.

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The liberalization of the Indian economy in 1991 saw to the relaxation of Foreign Direct Investment (FDI) norms. Bakan addresses these corporations as economic and legal institutions that can set out to pursue their economic self-interests without consideration of the harmful consequences that will be reaped by their host countries. This self-interest may prove detrimental to the society, individuals and even the stakeholders themselves because the interests of most multinationals are often not aligned with the interests of their host countries, and as such may actually inhibit their sustainable economic growth and development (Bakan, 2012). Multinationals exploit their host countries by exporting their profits back to their home country, often after having expended heavy charges in the provision of services within the host country.

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According to IBM (2019), the corporation fought with both local and global corporations for the packs of government outsourcing contracts, with the profits being gleaned from the Indian domestic market and ploughed back into the primary corporation. This is because its policies are home-country oriented. IBM can use CBA technique to analyze the worth of their global IT services investments incorporating both the financial and tangible end of the business, as well as the intangible aspects such as customer and employee satisfaction, the environment and safety, as benefits can also be integrated as intangible assets. These benefits and costs are then analyzed with reference to their indirect and long-term effects, enabling the making of financial decisions (Nayar & Kumar, 2018). As such, IBM uses it in its policy development, capital expenditure and setting of corporate standards.

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