Question

liakiing purchases and investments? 6. Review the UN Global Compact principles in Table 12.7. In what ways are these principles and issues related to a successful global economy? What benefits and/or challenges do they present to multinational corporations?

I am trying to figure out number 6

Answer 1

A global economic system consists of different participants as stakeholders that are present in each of the economies in different parts of the world. In this regard, it is very important to protect the best interests of the all the participants in the economy to develop a healthy global economy. It is the reason that principles are developed to be followed by the firms and proactively initiated by the regulatory bodies also so that the global economy grows and extend benefits to everyone in the world. These mentioned principles impact the global economy in pursuit of being successful in following ways:

1. It starts with the protection, respect of the human rights and application of policies related to the human rights as people are important participants in the global economy. These people come from the different culture, race, ethnicity and socioeconomic background and global economy cannot be successful unless people are given due respect and valued in their own context. It is the reason that MNCs come ahead to solve local issues and help in making lives better for the people in their area of operation.

2. Give due credit to the employees and labor force with strong prohibition towards discrimination, child labor and unsafe work environment. It brings confidence among the employees and help them motivate to work and contribute in achieving the organizational goals. The prohibition of the discrimination of any level, constitute the civil rights among the employees and bring fair treatment on the basis of merit and eligibility.

3. Protection of environment brings sustainability and ecological system is preserved. It saves the world and helps preserving the nature for the coming generation. It helps in realizing the global economy in true sense as environment care becomes the one of the prime objectives during the policy planning.

4. Anti-corruption principles bring the fair practices and creates a business environment where quality and best practices prevail in the economy. It develops a system where those entities go ahead who create value of the target audience and without encouraging malpractices. So, it also contributes to the successful global economy.

Benefits presented to the MNCs are as follows:

1. It creates opportunity to link operations in different economies and bring efficiency and productivity.

2. It increases global appeal and acceptability.

3. They get the first move advantage as they are already present in the different economies.

Challenges presented to the MNCs are as follows:

1. Different economies under the global economic system, will pose different regulatory environment. So, building a system that comply with all the regulatory environment is a big challenges.

2. Different culture and localized issues can prevent the standardized operations.

3. Poor performance in one economy will affect the reputation in other economies in the global economic perspective.