International Political Economy Research Paper

Pages: 20 (5133 words)  ·  Style: APA  ·  Bibliography Sources: 20  ·  Level: College Senior  ·  Topic: Business

International Political Economy

The issue of multinational corporate ethics in the area of sustainable development has forced the hand of many CEO's to act in what is perhaps against the better wishes of their shareholders, but perhaps not of the stakeholder. The question many embattled CEO's must continuously ask is the following. As the executive leader of this company, should I enact a sustainability plan at the cost of short-term investment for the promise of engaging a long-term sustainable development strategy for environmental stewardship?

To answer this question, it is important to identify what the global perspective is and the nature of the governmental agreements that have put pressure on corporations to comply with increased environmental controls to limit pollutants and contaminants released into the atmosphere and into the tangible environment. A case analysis of the U.S. And Germany will then be investigated.

Multinational corporations within Germany have engaged in the strategy of sustainable development and have more actively engaged in environmental stewardship as a function of such agreements as the Kyoto Protocol. Historically, these developments are of a major change from the previous notion of multinational corporations and the negative environmental sentiment leading to the destruction of natural lands and water bodies across the world. Stories are ripe with multinational corporations with operations in developing nations where manufacturing plants pollute the regions local water supply with toxic industrial wastes.

Additionally, within the U.S., multinationals have frequently been cited by environmental lawyers as the primary concern behind environmental pollution in developing nations. Similarly, government contractors and government agencies have also been to blame for domestic pollution content as well, such as high mercury content in the waters around the Virginia/D.C. area. The 'greening' of multinational corporations is a statement that indicates these companies have engaged in practices that cease to introduce contaminants and/or pollutants into the natural environment and to also invest in the cleaning and maintenance of the environment and surrounding ecology. Collins (2010) offers advice on ways multinationals can improve their local external operating environment.

Facilitating Sustainability

"Multinational corporations can help improve the local environment in the communities they work in by interacting with government and residents. This study looks at the environmental perceptions of residents in the binational community of Calexico, California, United States and Mexicali, Baja, California, Mexico. Through the results of a series of qualitative interviews and focus group meetings in the region, the workplace was found to be an important component to improving the environment. This leads to a conclusion that greater interaction by multinational corporations in environmental concerns can make a real difference in people's lives and the sustainability of the world for future generations." (Collins, 2010)

Within the U.S., the first area of responsibility is ascertaining from local government and the community leaders the scope and method of interaction between these entities and the representatives from the engaged multinational corporation. Often, there are multiple multinational corporations in the area and all are looking to engage the community toward environmental sustainability through stewardship. The primary method of engaging the community is by preventing environmental contamination.

"Environmental contamination has a number of impacts on the economic and social growth in a community. If a community has a high level of environmental, and consequently health, problems, residents might fight against the placement of any new industry. There are additional impacts related to economic productivity, as sick employees or employees with sick children caused by environmental contamination are unable to attend work or are distracted at work because of illness. The social impacts include the overall health of the residents and pride in the community. Both of these are related to educational levels for children as they are absent from school because of respiratory or gastrointestinal diseases. Community pride comes along with having a clean school because of respiratory or gastrointestinal diseases. Community pride comes along with having a clean town and generally a nice place to live." (Collins, 2010)

Over the course of the 20th century, U.S. And German economies have clearly been affected by populations that suffer from the social impacts created by multinational corporations that have polluted the environment. Community pride is a function of community activism that has brought to light the number of atrocities committed by multinational corporations that have left a lasting and unwanted impact. By engaging the communities that have been affected by environmental contamination, the corporate image of the organization shifts, the level of Goodwill value on the balance sheet increases, and the impact of multinational involvement on the community becomes palpable.

"Multinational Corporations have always operated under increased public scrutiny. However, the political aspirations towards the liberalization and opening of national markets during the last two decades of the 20th century have intensified the debate about the multinational's proper role in the globalizing world. The notion of the global citizen refers to the multinational corporation's genuinely global character. This global character is neither dependent on the number of countries a company is doing business in nor does it contradict a strong tie of the multinational corporation to its home country; it is not to be confused with 'footloose'." (Wettstein, 2005)

Environmental consciousness is niche' area to which multinationals are emerging into. Countries including the United States and Germany are able to engage to yield an environmental impact to improve health. "In this era of worldwide environmental consciousness, the multinational corporation can be an effective agent possibly the most effective agent available today -- to improve health and environmental conditions in developing countries. One major challenge in globalizing product stewardship is how to organize. Policy and standards are usually set at the corporate level, while responsibilities for implementation rest within each country. Efficient management of sales and marketing often groups several dissimilar countries together. This leads to the difficulties of managing an organization with multiple cultures, religions, languages, differing attitudes toward environmental, health and safety concerns, and varying systems of government with distinct regulatory policies." (Bond, 1996)

The issue that Bond brings to the forefront, environmental sustainability, establishes multinationals as the means to an ends for establishing the model for environmental sustainability. By engaging the multinational corporation to enable government and private citizens, the major component to drive change in the environment is the multinational of which is indoctrinated with the opinion of a diverse set of employees.

Environmental consciousness is the most effective agent available against combating the effects of environmental degradation (Bond, 1996). By identifying the level of stewardship required on behalf of the multinational, the alliance can determine the most utilizable methodology to coordinate efforts on an internal scale to bring about a fundamental plan to coordinate environmental change on the small scale. Although the effort requires a macro organizational response that is somewhat against the core, internal mission of the organization, by internally focusing the organization to focus on environmental stewardship, the organization is able to internalize its organizational response from a diverse scatter to an organized diversified, response.

Environmental issues have generated a sociological impact, having been blamed for various health problems suffered within the U.S. population. The multinational investment into communities to increase responsibility to stakeholders is increasing. U.S. corporations do receive tax incentives to 'green' their businesses, sustainable design and other uses of renewable resource energy generation are encouraged.

"Today, previously ignored social and environmental issues increasingly affect the future of corporate business. Corporations that successfully manage these issues and view the management efforts as an investment rather than an expense may well assure a competitive advantage over those that do not. Benefits from such investments include project security, improved relations with communities and governments, the support of potential customers and investors, positive reactions from international stakeholders and the ability to secure future contracts." (Dabbs, Bateson, 2002)

Climate change is an additional political ideology that has produced pressure on multinationals to change business models and change the ways they do business. Steel Mills were no longer able to be gross pollutants, and cars manufactured in the U.S. And Germany, for either market, were mandated to comply with ozone gas emission restrictions. The state of California in the U.S., requires that all cars registered after the year 1972 have to produce a smog inspection.

"The Stern Review on the Economics of Climate change advises us to invest in sustainability now to avoid much worse later on. Overall, those in the sustainability implementation hot seats identified with both the conventional corporate mindset (i.e., traditional capitalism) and the new sustainability paradigm. Accompanying this was a perceived ambivalence, which tended towards negativity, concerning the effectiveness of the corporate implementation of environmental sustainability. Boards in particular typically gave mixed messages." (Ahern, 2009)

Ahern points to the expected outcome of advancing an environmental sustainability program on the multinational corporate agenda. Many board of directors as well as executive management do not understand the accounting increase in Goodwill by heading an environmental sustainability program an internal mechanism to create a private/public partnership in preserving the environment and community existing around the multinational.

U.S., Germany, Globalization, and Environmental Sustainability… [END OF PREVIEW]

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