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As economic development has become the leading objective of each nation in the world, human care has been gradually faded in order to fulfill that goal. The existence and growth of transnational corporations (TNCs), especially American TNCs has further highlighted that tendency while the USA is often described as destination for freedom and equality. Therefore, this research investigates American TNCs’ respect for freedom and equal opportunity in terms of their labor treatments and expansion strategies when they operate their affiliates abroad. Secondary approach with documentary and contextual analysis of observed phenomenon and case study are intensively used to study about American TNCs’ activities, the coordination between their operation and code of conduct in business through detailed contexts. Results of the study prove the link between the expansions of crossborder capitalism and broken promise for better practice of worker and human rights. In particular, burgeoning penetration of American TNCs has threatened host countries’ territorial sovereignty. Furthermore, under the pressure of cutting cost, American TNCs have exploited cheap labor force, and have implemented irrelevant wage levels, poor employees’ benefits and have offered inadequate training and promotion. They also create unequal competition in the interaction with local firms to maintain their monopoly.
VIETNAM NATIONAL UNIVERSITY, HANOI UNIVERSITY OF LANGUAGES AND INTERNATIONAL STUDIES FACULTY OF ENGLISH LANGUAGE TEACHER EDUCATION GRADUATION PAPER AMERICAN TNCs: BROKEN PROMISE OF FREEDOM AND EQUALITY OF OPPORTUNITY Student: Nguyễn Tuấn Anh Course: QH2010.F1.E16 HÀ NỘI - 2014 VIETNAM NATIONAL UNIVERSITY, HANOI UNIVERSITY OF LANGUAGES AND INTERNATIONAL STUDIES FACULTY OF ENGLISH LANGUAGE TEACHER EDUCATION GRADUATION PAPER AMERICAN TNCs: BROKEN PROMISE OF FREEDOM AND EQUALITY OF OPPORTUNITY Supervisor: Nguyễn Lê Hường (M.A) Student: Nguyễn Tuấn Anh Course: QH2010.F1.E16 HÀ NỘI – 2014 ACCEPTANCE I hereby state that I, Nguyen Tuan Anh, being a candidate for the degree of Bachelor of Arts (English – International Business) accept the requirements of the College relating to the retention and use of Bachelor‘s Graduation Paper deposited in the library. In terms of these conditions, I agree that the origin of my paper deposited in the library should be accessible for the purposes of study and research, in accordance with the normal conditions established by the librarian for the care, loan or reproduction of the paper. Signature Date ACKNOWLEDGMENTS i First and foremost, I would like to express my deepest gratitude to Ms. Nguyen Le Huong, MA, my supervisor, who has supported me in choosing this topic and supervised my work carefully. Her proper and critical guides as well as valuable encouragements during the research process were the most solid support for the complete study. Without her enthusiastic instruction, I will not fully complete my research as desired. In addition, I am genuinely grateful to Dr. Nguyen Kim Anh, my lecturer in International Investment course. Thanks to her substantial help, I could gain useful materials for the research. Lastly, I want to sincerely say thanks to my beloved family and friends with their warm and prompt encouragements and help to finish my research on the right tract. ABSTRACT ii As economic development has become the leading objective of each nation in the world, human care has been gradually faded in order to fulfill that goal. The existence and growth of transnational corporations (TNCs), especially American TNCs has further highlighted that tendency while the USA is often described as destination for freedom and equality. Therefore, this research investigates American TNCs’ respect for freedom and equal opportunity in terms of their labor treatments and expansion strategies when they operate their affiliates abroad. Secondary approach with documentary and contextual analysis of observed phenomenon and case study are intensively used to study about American TNCs’ activities, the co-ordination between their operation and code of conduct in business through detailed contexts. Results of the study prove the link between the expansions of cross-border capitalism and broken promise for better practice of worker and human rights. In particular, burgeoning penetration of American TNCs has threatened host countries’ territorial sovereignty. Furthermore, under the pressure of cutting cost, American TNCs have exploited cheap labor force, and have implemented irrelevant wage levels, poor employees’ benefits and have offered inadequate training and promotion. They also create unequal competition in the interaction with local firms to maintain their monopoly. LIST OF TABLES AND FIGURES iii LIST OF TABLES PAGE Table 1 10 Table 2 15 Table 3 16 LIST OF FIGURES PAGE Figure 1 9 Figure 2 13 TABLE OF CONTENTS Acknowledgments i iv Abstract ii List of tables and figures iii Page Chapter 1: Introduction 1.1.Statement of problem & rationale for the study 1 1.2.Statement of research questions 3 1.3.Research goals and objectives 3 1.4.Scope of the study 4 1.5.Significance of the study 5 1.6.Design of the study 5 Chapter 2: Literature review 2.1. Definition and classification of international investment 7 2.1.1. Definition 7 2.1.2. Classification of international investment 8 2.2. Definition of TNCs and their forms of investment 8 2.2.1. Definition 8 2.2.2. Forms of TNCs 8 2.3.Establishment of TNCs – the spread of transnational capitalism 9 2.3.1Motivations of companies reaching a certain size to become TNCs 9 2.3.2. Traditional values that drive American TNCs’ growth 11 2.4. A brief history of TNCs & American TNCs’ development 13 2.4.1.From origins to World War II 13 v 2.4.2.From 1945 – to present 15 2.5. Roles of TNC in global economy and social development 17 2.5.1.Economic and social achievements brought to host country 17 2.5.2. Economic and social achievements brought to the whole world 18 Chapter 3: Methodology 20 Chapter 4: TNCs and national sovereignty 4.1.Territorial penetration 22 4.2.Interferences into local state’s economic system 23 4.2.1.Financial dependence 23 4.2.2. Interference with balance of payment 25 4.3.Political intervention 26 4.4.Integrated cultures 30 Chapter 5: TNCs and Employment issues 5.1. Human resources management issues 33 5.1.1.Labor exploitation 33 5.1.2.Worker’s Trade Union rights 35 5.1.3.Attacks on physical integrity 36 5.2. Wage levels and employee benefits 38 5.2.1.Unequal payment 38 5.2.2.Massive home worker lay-offs 39 5.2.3.Workforce training and promotion opportunity 40 vi 5.3. Working conditions and employees’ health and safety 41 Chapter 6: TNCs and Competition 43 Chapter 7: Conclusions, implications, limitations and suggestions 7.1. Conclusions and implications 45 7.2. Limitations of the study and suggestions for further studies 47 References 48 Appendices 53 vii CHAPTER 1: INTRODUCTION 1.1. Statement of problem & rationale for the study It is obvious that all nations and territories over the globe have an excessive demand for development. The “growth-centered” tendencies with the principal focus on economic objectives have undeniably brought countries great benefits. However, the over-concentration on economic achievements for many years has now revealed its back-sides on the society. “Growth-centered economic policies accelerate the breakdown of the earth's regenerative systems, and intensify the competition between rich and poor for the earth's remaining real wealth. The result is a three-fold human crisis of increasing poverty, environmental destruction, and social disintegration” (David C. Kotern, 1990). Needless to say, humans are the most vital factor regulating the destiny of our whole planet. Therefore, people development should be constantly invested in the most comprehensive way, as it will ensure the sustainable existence of our earth. Nonetheless, the force of globalization and external competition has reinforced economic “growth-centered” policies. This unbalance has significantly triggered a neglect of care to humans. Nowadays, international investments have strengthened not only the prosperity of participating countries but the growth of the whole world as well. Trans-national 1 [...]... stimulate the curiosity of the writer As a result, this research paper named American TNCs: broken promise of freedom and equality of opportunities” was conducted The researcher expects that readers can gain more profound understanding of American traditional values that drive TNCs’ cross-border expansion, and then get a clearer overview of American TNCs’ offshore investment activities and policies Moreover,... readers will become aware of our emerging global trend - “sustainable development with high respect for human rights” As a result, American TNCs: broken promise of freedom and equality of opportunity firstly proves to be of great help for both teachers and students ,especially those who specialize in fields of social studies (including American studies, International Relations and International studies),... Statement of research questions In order to interpret American TNCs’ respect for freedom and equality of opportunity, the researcher will concentrate on two main research questions: 1) What are the fundamental values driving American TNCs’ development and foreign expansion? 2) To what extent have American TNCs violated their values of freedom and equality of opportunity as their human-rights commitment? 1.3... primary aim of this research paper is to analyze the American TNCs’ foreign investment activities and policies to see if they violate their values of freedom and equality of opportunity Accordingly, the American TNCs’ broken promise of human rights will be clarified 3 In addition, the researcher provides some implications for host countries to employ effective foreign investment policies towards the American. .. achievements, profits and success in the global market They also brought host countries a great number of jobs, advanced technologies, modern facilities, management skills, etc The United States, one of the most powerful and wealthy nations in the world, has never forgotten to protect human rights and humanitarianism It is often proud of its values and beliefs in a democratic society “A land of freedom and opportunity ... 2010) Furthermore, America’s “people-concentrated” policies in foreign investment and human resources management, which emphasize values of freedom and equality of opportunity, are often praised to be equal and ideal However, have American TNCs broken their accountability commitments? In other words, is the principle of people development really applied despite the high-pressure upon the growth-centered... that drive TNCs to expand their capitalism by investing abroad This chapter plays an important role to the whole thesis as the theoretical background to analyze American TNCs’ activities and policies with regard to their respect for freedom and equality of opportunity 2.1 Definition and classification of international investment 2.1.1 Definition “Investment is the use of an amount of assets such as capital,... wealth and property Achievement, therefore, is defined as an appropriate measure of one’s success “The 12 great American Dream of fame and fortune comes to those who work hard and never give up (L Robert Kohls, 1984)” Pragmatism, hard work and achievement involve the expansion of American TNCs outside the country border The dream of getting richer and more successful is highly appreciated in the US For Americans,... Investment (FDI) and Foreign Portfolio Investment (FPI): FDI is a real investment in factories, capital goods, land and inventories Hence, both capital and management are involved for medium and long-terms Meanwhile, FPI requires the development of stock and bond markets in other countries because it includes purchases and sales of securities (bonds and stocks) FPI exists when investors own an amount of securities... workers All of these are expected to support the trend of “people-centered” policies for sustainable development and a crucial need to raise human rights, which attract great attention from nations, regions, groups and organizations 1.4 Scope of study The research is aimed at observing how American TNCs fulfill their human rights commitment for freedom and equal opportunity Hence, comparisons and contrasts . OPPORTUNITY Supervisor: Nguyễn Lê Hường (M.A) Student: Nguyễn Tuấn Anh Course: QH2010.F1.E16 HÀ NỘI – 2014 ACCEPTANCE I hereby state that I, Nguyen Tuan Anh, being a candidate for the degree of Bachelor of. double-major (English – International Business) program, which is brand-new at ULIS - VNU, the researcher hopes that his study will contribute to the useful reference resources of double-major. 2004). The third value that stimulates cross-border capitalism of TNCs is self-reliance. Self-reliance reflects individual’s independence and self-control over any 11