IGS 10a Chapter Notes - Chapter 7: Multinational Corporation, Corporate Social Responsibility, Market Failure
10 Sep 2016
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For many, mncs come to symbolize what is wrong with globalization and a primary cause of its problems (evil) Businesses pursue profits making money #1 priority. Cut costs, avoid taxes, and limit spending at any cost. Yet corporations central to bringing globalization to the developing world. Goods of developing countries markets of industrial countries. Lower cost of living, low inflation, low interest rates. Largely unfair charge: corporations often blamed for materialism endemic to developed societies. Corporations simply respond to what people want. However, corp sometimes worked to shape desires to enhance profits (advertising) Corporations in the business of making money, not providing charity. Adam smith: individuals in pursuing self-interests would advance broader interests of society; morality plays no role. Only responsibility to shareholders maximize stock market value or profits. Has increased standard of living largely in past 2 centuries. However, even smith recognized in an unfettered market economy, private incentives often not aligned w/ social costs and benefits market failures.
