DEMOCRACY: AN EVALUATION ON THE IMPACT OF MULTINATIONAL CORPORATIONS IN A DEMOCRATIC STATE.
(A CASE STUDY OF MULTI-CHOICE (DSTV)NAMES: CHASUE ANDRIAN LONGWESTUDENT NUMBER: BPIR1511056SCHOOL: EDUCATION, SOCIAL SCIENCES & TECHNOLOGYPROGRAMME: POLITICAL SCIENCE & INTERNATIONAL RELATIONS TABLE CONTENTSCHAPTER ONE INTRODUCTION ………………………………………………………………….BACKGROUND INFORMATION………………………………………………… STATEMENT OF PROBLEM……………………………………………………..OBJECTIVES……………………………………………………………………….
.RESEARCH QUESTIONS………………………………………………………….HYPOTHESIS………………………………………………………………………..SIGNIFICANCE OF STUDY……………………………………………………….LIMITATIONS ………………………………………………………………………OPERATIONAL DEFINATIONS………………………………………………….
CHAPTER TWO2.0 LITERATURE REVIEW2.1 THEORETICAL FRAMEWORK2.2 CONCEPTUAL FRAMEWORKCHAPTER THREE3.0 RESEARCH DESIGN 3.1 SAMPLE POPULATION & SIZE 3.
2 DATA COLLECTION & TOOLS3.3DATA ANALYSIS 3.4 INTRODUCTION:Margolis and Walsh (2003) write that during the past decades they has been an increase in the number of business firms engaging in activities that were traditionally regarded as actual government activities.
During this period, non-state actors have slowly proliferating the global community. The increase in the number of firms has manifested the emergence of a form of ‘modern’ political power in which authority is decentralized to non-state actors, such as NGOs, intergovernmental organizations, and multinational corporations (Matten and Crane 2005). Some authors have concluded that business firms have become important non-state actors in the global society (Scherer and Palazzo 2007). According to Holland (2011) the proliferation of non-state actors in the international political economy has led to the startling reality that turned corporations into political entities hence making their influence as political actors sizable. Based on the growing recognition of business firms, multinational corporations have begun to have their own impact on nation-states. This study aims to evaluate the political, economic and social impact of multinational corporations in a promoting democracy.
BACKGROUND INFORMATIONScherer & Palazzo (2011) write that prior to globalization, scholars in politics and economics widely shared the assumption that business firms operated for the purposes of increasing profits only, leaving the task of economic welfare and the provision public goods to the state alone. In particular, this meant that the government and state agencies were considered as the only political actors whose mandate was to provide according to their social, economic and political responsibilities. However, since the introduction of globalization, this has changed, hence raising the question as to whether MNC’s are legally responsible to their home country or to the country in which they are operating (Holland; 2011). However, despite the question of whether MNC’s are responsible to the host country or country of origin has not meant that MNC’s have no role in governance. Miller (2012) explains that since its introduction, many business firms have started to assume social and political responsibilities that go beyond profit maximization.
As a result, they has been an increase in the number of political, social and economic actors, that each play a significant role in governance. With majority of countries adopting the democratic political ideology in their governance systems, Art ; Jevis (2005) write that non-state actors have begun to demand for their involvement in the content of new norms, with some having had opposition to their participation in decision making, non-state actors are causing a shift in the once perceived government of the state only. GENERAL OBJECTIVESTo evaluate the impact of Multi-National Corporations in a democratic state.SPECIFIC OBJECTIVESTo determine the social impact of Multinational Corporations.
To analyze the economic impact of Multinational Corporations enhance economic growthTo assess the political impact of Multinational Corporations RESEARCH QUESTIONSHow do MNCs impact socially in a democratic state? What are the economic impacts of MNCs in a democratic state? What is the political impact of MNCs in a democratic state?HYPOTHESISH.o: Multi-National Corporations have no social impact in a democratic state. H.i: Multi-National Corporations do have a social impact in a democratic state. H.o: Multi-National Corporations have no economic impact on a democratic state.
H.i: Multi-National Corporations do have an economic impact on a democratic state. H.o: Multi-National Corporations have no political impact on a democratic state.
H.o: Multi-National Corporations do have a political impact on a democratic state.SIGNIFICANCE OF STUDYDemocracy can be said to be the ideal political ideology in a globalized world. Through this study, more awareness will be raised on the importance non state actors in promoting democracy.
The study will educate people on the core principles of democracy, while going on to explain how Multi-National companies contribute to the development of some of these democratic principles. The study, will not only educate people on the importance of democracy and its different aspects, but will also help encourage people to get more involved in the democratization process. While this study will focus on Multi-choice as its study area, the study will also educate different MNC’s other than Multi-Choice on their social responsibilities in a democratic state. Apart from the study raising awareness on the different non-state actors that contribute to the promotion of democracy, the study will also contribute to the Zambia’s political, economic and social field, hence contributing to the development process in different aspects of society. LIMITATIONSThe research will only focus on the role of multinational corporations in promoting democracy, while other non-state actors such as non-governmental organizations, civil-society organizations and international non-governmental organizations that contribute to the democratization process will not be evaluated.
The research will only focus on one multinational corporation in Zambia (Multichoice) while other multinational corporations in the country such as Vodaphone, Airtel and MTN will not be analyzed. The study will base its research on the promotion of democracy while the other contributions made by multinational corporations will not be acknowledged in this study.SCOPE OF STUDY The study will focus on multi-national corporations in a democratic state, with democracy been the key political ideology been analyzed.
The scope of this research will be focuses on analyzing how MNC’s promote democratic principles such as sustainable development, economic growth, citizen participation and human rights that each significantly contribute to the democratization processrole of business firms in society . The case study for this particular research will be Multichoice, which is a multinational digital satellite television company with subsidiaries in different countries around the African region, but its headquarters in South Africa. The study will be carried out in Lusaka province, Zambia during July – December 2018. STATEMENT OF PROBLEM Despite Zambia been declared a democratic state, Zambia still remains a developing country with the key democratic principles such as equality, citizen participation, political tolerance, accountability and transparency still falling short in the Zambian society. In order for democratization to be as effective as required by the liberal standard, different measures and policies need to be undertaken not only by the government, but by non-state actors as well. Based on the growing need for the involvement of more actors in the democratization process, more awareness needs to be raised so as to inform not only multinational corporations but other non-state actors on their role in fostering sustainable development among other democratic principles.
The involvement of more actors could help ensure that core democratic principles are put into practice and upheld. OPERATIONAL DEFINATIONS :MULTI-NATIONAL CORPORATIONS: A large company operating in several host countries, while having its headquarters in a particular country, this maybe its country of origin. Foreign subsidiaries maybe either regional or international. DEMOCRACY; GLOBLIZATION; Globalization can be defined as a process of intensification of cross-border social interactions due to declining costs of connecting distant locations through communication and the transfer of capital, goods, and people. This process leads to growing transnational interdependence of economic and social actors, an increase in both opportunities and risks, and to intensified competition (CORPORATE SOCIAL RESPONSIBILITY: “corporate social responsibility (CSR)” as an umbrella term for the debate on the role of business in society.
political CSR can be understood as a movement of the corporation into the political sphere in order to respond to environmental and social challenges such as human rights, global warming, or deforestation (Scherer and Palazzo 2007)CHAPTER TWOLITERATURE REVIEWPolitical Impact: According to Scherer and Palazzo (2007) business firms have become important political actors in the global society, causing business firms to incorporate a state-like role (Margolis and Walsh; 2003). In the course of this development, Ibid (2007) clarifies that business firms have become more involved in government activities. Lawyers have also emphasized the importance of private business firms, explaining that MNCs have also contributed to the process of legalization and have aided the process of pushing norms and institutions towards the rule of law (Ibid; 2003). Fung (2003) writes that business firms have begun to participate in the processes of self-regulation through “soft law” in instances where state agencies are unable or unwilling to regulate accordingly. Carroll (1991) states that multinational corporations also go on to collaborate with the state by sharing knowledge on the interests of the people that contribute to the policy making process.
In these areas of public policy, the involvement of both private and public actors has helped to better the content of the policies that have been implementedHowever, despite these factors, they has been a decline in government capability of nation states Kobrin (2009, p. 350) emphasizes the loss of the regulatory power of state institutions due to ‘the fragmentation of authority’, Habermas (2001) writes that this has caused a the decline of nation state authority. Ibid (2001) explains this as a weakening of democratic control and the rule of law creating causing further challenges for the democratic political order. Economic Impact: Li and Liu (2005) give emphasis on the economic importance of multinational corporations as they write that multinationals are one of the most effective means of generating economic growth and development in a host country through their foreign direct investment (FDI).
Ibid explains that the investments made by multinational firms have become a vital aspect in a countries economic activity. Through FDI, developing countries are able facilitate economic growth (Raj et al. (2010). This is clarified when H.
Lalnunmawia (2010) writes that MNCs are usually recognized for their positive role in economic development, such as contributing to increase the possibilities of economic growth; reducing or removing the balance of payment deficit and contributing to government tax revenues and locally raised taxes (salary wage) . Social Impact: The social impact of multinational corporations has affected different aspects of society. that the infiltration of MNCs in developing countries has a potential to increase welfare of citizens through the salary level of employed people, Over the past two decades, the increasing flow of trade and FDI have transformed and modernized the economies of emerging markets (Ibid; 2010). Based on this government resources have been generated, allowing the government to spend more money in social welfare areas such as education and health care. According to Matten and Crane (2005) many MNCs have begun to fulfill the functions of protecting, enabling and implementing citizenship rights.
Besides this, ibid states that MNCs engage in public health, education, social security, and protection of human, addressing social ills such as AIDS, malnutrition, homelessness, and illiteracy (Margolis and Walsh 2003). While ibid (2005) states that multinational corporations protect human rights, begs to differ as he conclude that MNCs human rights and environmental violations are considered to be the worse form of negative impact. Multinational corporations are regularly accused of violating human rights directly or indirectly, MNCs’ violations include for example complicity in the brutality of host States police and military, the use of forced, slaved and child labour, poor working conditions, suppression of rights to freedom of association and speech, violations of rights to cultural and religious practice, infringement of rights to property (including intellectual property), and gross infringements of environmental rights (Ibid). Economic rights, which are an important determinant of social and cultural rights, were neglected for a long time due to the political interests of the Western world’s leading powers..
MNCs often use their economic power to influence governments to adopt policies unfavourable to development, such as lower tax, subsidized inputs and cheap provision of factory sites, among others (Ibid).providing resources with training programs and learning processes of management experience, entrepreneurial abilities, and technological skills (H. Lalnunmawia, 2010). Moreover, MNCs are also considered to be engines of prosperity and enhancement of local living conditions by generating employment, income, and wealth, as well as by introducing and dispensing advanced technology through the process known as ‘technology transfer’ (M. Monshipouri, C.
Welch, Jr. and E. Kennedy, 2003).
Besides the provision of public welfare and contributions to the legislation. The collaboration of the private and public entities has combined the interests of both parties with the available knowledge and resources, and to enhance the capacity to enforce standards or to implement policies .MNCs often use their economic power to influence governments to adopt policies unfavourable to development, such as lower tax, subsidized inputs and cheap provision of factory sites, among others (Ibid). THEORETICAL FRAMEWORKLIBERAL INTERNATIONAL RELATIONS THEORY: assumes that international order is created from the bottom up. It identifies multiple bodies of rules, norms and processes that contribute to international order, beginning with voluntary codes of conduct adopted by individual and Corporate actors operating in transnational society and working up through transnational and transgovernmental law to traditional public international lawCONCEPTUAL FRAMEWORK168592629210MULTI-NATIONAL CORPORATIONS00MULTI-NATIONAL CORPORATIONS28765501911350187642576835IMPACTIMPACT41243251968500146685019685002876550196850441007591441POLITICAL00POLITICAL196215091440 ECONOMIC00 ECONOMIC-6476995715SOCIAL 00SOCIAL 546735026733528765502673353333751625604562475201295PROLIFERATION OF NON-STATE ACTORSDECENTRALIZATIO OF STATE ACTIVITIESSOFT LAWPOLICY PROCESSSTATE MANIPULATION0PROLIFERATION OF NON-STATE ACTORSDECENTRALIZATIO OF STATE ACTIVITIESSOFT LAWPOLICY PROCESSSTATE MANIPULATION1962150201295EMPLOYMENT CREATION FDI CONTRIBUTING TO TAX PAYMENTS ECONOMIC GROWTH 0EMPLOYMENT CREATION FDI CONTRIBUTING TO TAX PAYMENTS ECONOMIC GROWTH -714375201294EDUCATION (KNOWLEDGE CREATION) INFUSTRUCTURE DEVELOPMENTTECHNOLOGY IMPROVEMENTPROVISION OF PUBLIC GOODSHUMAN RIGHTS VIOLATIONS 00EDUCATION (KNOWLEDGE CREATION) INFUSTRUCTURE DEVELOPMENTTECHNOLOGY IMPROVEMENTPROVISION OF PUBLIC GOODSHUMAN RIGHTS VIOLATIONS CHAPTER THREE RESEARCH APPROACHThe approach that will be applied for this particular research will be qualitative and quantitative RESEARCH DESIGNSAMPLE POPULATIONThe study population will be taken from Lusaka Zambia; the research will take place in two suburb areas, two rural setting areas and one middle class area.
SAMPLE SIZE The research will study a total of 25 people from the 5 neighborhoods in Lusaka Zambia, this will be broken down as; 5 from Kabulonga, 5 from Roma, 5 from Ngombe area, 5 from Kalingalinga and 5 from Chelstone area. DATA COLLECTIONThe gathering of data in this study will be done through screening tools. The interviews will be unstructured, while at the same time having conversations with the individuals been interviewed. Questions will be informal and free flowing, DATA ANALYSISData will be analyzed through frequency distribution tables, to show the results obtained from the research and results will be recorded in percentage form. ETHICAL CONSIDERATIONSBelow are the ethical considerations that will be considered for this research 1.
Informed Consent- respondents will be informed on the nature and purpose of the research. Respondents will then be given a choice as to whether they would like to participate in the research or not. Participates will not be obliged to participate in the research and if they do choose to participate, they will do so at their own free will.
2. Rights to Privacy-respondents will not be asked for their phone numbers, physical address or their financial status. Respondents will not be obliged to give out their full names and the principle of anonymity will be upheld.3. REFERENCES Carroll, A.B.
: The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horiz. 34, 39–48 (1991)Fung, A.
: Deliberative Democracy and International Labor Standards. Governance. 16, 51–71 (2003)Margolis, J.
D., Walsh, J.P.: Misery Loves Companies: Rethinking Social Initiatives by Business. Adm. Sci.
Q. 48, 268–305 (2003)Matten, D., Crane, A.: Corporate Citizenship: Towards an Extended Theoretical Conceptualization. Acad. Manag.
Rev. 30, 166–179 (2005)Palazzo, G., Scherer, A.
G.: Corporate Legitimacy as Deliberation. A Communicative Framework. J.
Bus. Ethics. 66, 71–88 (2006)Kobrin, S.J.: Globalization, Multinational Enterprise, and the International PoliticalSystem.
In: Rugman, A.M., Brewer, T.L. (eds.
) The Oxford Handbook of International Business, pp. 181–205. Oxford University Press, New York (2001)Gomez, P.-Y., Korine, H.: Entrepreneurs and Democracy.
A Political Theory of Corporate Governance. Cambridge University Press, Cambridge (2008)Dunfee, T.W., Fort, T.L.
: Corporate Hypergoals, Sustainable Peace, and the Adapted Firm. Vanderbilt J. Transnatl. Law.
36, 563–617 (2003)