Better Pay and Working Conditions in Multinational Essay

Reaction theme Part I Identification Alexander Hijzen and Paul Swaim, Do multinationals promote better pay and running(a) goldbrickditions? OECD (Organization for frugal Development) Observer, October 2008 Issue 269, pp 15 17. Part II Abstract Summary The article examines the behavior of world-wide business enterprises, also k straight offn as multinational enterprises (MNEs), wages and working conditions, from the perception of the Organization for Economic Development (OECD).It gives a basic definition of a MNE as a corporation with headquarters in one country and affiliates, subsidiaries or merged operations in one or several new(prenominal) countries. Example MNEs mentioned in the article include Coca-Cola, Nike, Microsoft, EDF (French energy company), Rio Tinto (British-Australian mining firm), and Toyota. The article notes that there atomic number 18 thousands of MNEs and that they all are not a symbol of Western economic dominance. Some of the top firms listed now in FT one of the UKs top international business magazines includes China, Russia, India, and Brazil.First, the article addresses the pro and con minds that supporters and opponents of globalization bring to the working table of MNEs. It stresses the fact that no matter what ones opinion may be, the role of the MNEs in the world economy will continue to grow. Next, the article discusses the nature of MNEs as well as notes their advantages on employment (wages and working conditions). Concerning the wages, the article mentions that MNEs technical expertise and modern steering styles would provide a basis for higher(prenominal) pay wages.However, the pessimists doubt the higher pay since the MNEs are typically in a strong bargaining position with local workers. The article explains that the best way to state the question do multinational promote better pay and working conditions was to present a likeness of local and hostile companies in terms of their labor practices. So a study was completed to key out on this question. The study showed that MNEs do tend to pay more than local firms that compete in the same markets. In general the pay is 40% higher.The study also noted that the pay may be higher to minimize worker turnover and reduce monitoring cost. These results were based upon the report focusing on three OECD countries (Germany, Portugal, and the UK) and two emerging economies (Brazil and Indonesia). Then the fountain presented the results from the study of those newly hired workers pay vs. those workers who go from a domestic to a foreign-owned firm, as well as their adjustments to labor practices/working conditions. The study showed higher wages for newly hired workers and small losses or no effect for those moving to foreign firms.Several previous studies were mentioned which noted that multinational tend to adapt to local practices rather than impose their own. Finally, the author expresses the effect that experienced managers have on MNEs. It has been proven that local firms that recruit managers with experience in multinationals adore higher productivity. They can more easily recognize and enforce internationally accepted labor standards. In the end, it is noted that not only experienced managers but also government support is what will booster the MNEs be productive and help development.