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Melissa Ng (17)

15S06H
Can big business be a force for good?
In todays materialistic world, where economic growth is seen as one of the main
drivers of progress in many nations, it is no wonder that large businesses, such
multinational corporations, feature prominently in the discussion. The wide reach
and financial capability of these firms to propel the economy and hence generate
employment for the people are widely agreed upon. While the potential of large
firms to generate growth and exert a positive influence in many nations must be
acknowledged, I argue that more often than not, these gains are not fully
realised. Due to the inherent profit-maximising objective of firms and weak
enforcement of regulations, unintended economic, social and environmental
consequences have instead resulted.
Proponents of the stand that big businesses bring about many benefits point to
the economic gains from large firms. Large firms produce a great volume of
output, which requires labour to produce and hence creates jobs for the country,
reducing unemployment and increasing income for the workers. The inflow of
foreign direct investment also facilitates the exchange of ideas and technical
expertise, helping to train the workforce. This is especially important in
developing nations, which often suffer from a lack of domestic demand and
hence must rely on exports to the global market for economic growth. With an
increase in income, workers are empowered as they can provide for themselves
and their families. For example, in Vietnam, about 300,000 workers have been
trained or retrained, and 25,000 technicians and 6000 managers have been
trained. Vietnams exports also grew 13.6% in 2014, with an economic growth
rate of 6%. Hence, it can be argued that large firms are major drivers of
economic growth in many nations.
Furthermore, the vast amount of resources available to large firms makes them
more capable of tackling social problems than other institutions, and in some
cases, even governments. Sometimes, solving these issues is consistent with
their profit-maximising objective. Improving inadequate access to and poor
quality of healthcare in developing nations is one such area that coincides with
firms long term interests. Research has shown that healthier workers are more
productive, and with increased productivity, firms can cut costs and increase
profits. Takeda Pharmaceutical Company, one of the largest Asian drug makers,
through its Takeda Initiative, is one of the many large firms that have pledged to
contribute to strengthening healthcare systems in the developing world. The
large amount of profits earned by big companies also gives them the financial
capability required in tackling these social problems. For instance, the Bill and
Melinda Gates Foundation, run in part by Bill Gates, founder of Microsoft, is a
non-profit organization committed to reducing global poverty. Hence, the ability
of large firms to play a part in alleviating social problems is another way in which
they can be forces for good.
However, while it is undeniable that large firms have the potential and capability
to bring about positive change, very often these positive impacts are not
realised. For most firms, maximising profits is their main objective and the

Melissa Ng (17)
15S06H
determining factor behind their decisions. After all, that is how large firms have
become successful. In the tight race to keep reducing costs, they have resorted
to unscrupulous means that raise ethical concerns. The emergence of
sweatshops is one such undesirable consequence. In order to keep labour costs
as low as possible, many large firms have outsourced production to less
developed countries such as India and Vietnam, where cheap, unskilled labour is
abundant. The lack of regulation by weak governments in these nations and poor
(if not a deliberate lack of) enforcement of basic labour laws by profit-maximising
firms have resulted in serious human rights abuses in many factories. Workers
are forced to work overtime with low pay, in suffocating conditions that
undermine their basic rights and human dignity. In 2013, a building housing
garment factories collapsed in Bangladesh, killing more than 1100 people.
Factory fires brought about by hazardous working conditions are also not
uncommon. To make matters worse, these debilitating conditions remain
widespread, with little show of remorse from large firms. The social problems
brought about by unethical practices of big businesses, which go unregulated by
poor governments, cannot be ignored.
Large businesses also exacerbate economic problems in many countries. Large
companies have large market power and can drive out smaller firms,
exacerbating income inequality. Having large market power, they also exploit
consumers by raising prices in order to maximise profit. The presence of patents
allows firms to further entrench their market power and charge exorbitant prices
for their products. This has many implications, especially on the economically
disadvantaged. For instance, the high price of medicines has effectively excluded
the very people they would most benefit. The pharmaceutical industry is
dominated by few large firms, such as GlaxoSmithKline. Due to patents, they
own exclusive rights to producing medicines which, if made widely available,
would alleviate many conditions which plague the developing world today.
However, because of the high charges, most of those afflicted cannot afford
treatment. Although the technology is readily available and should, ideally, be
widely used to save lives, profit-maximising firms prevent these benefits from
being realised. The profit-maximising objective of large firms also directly
contradicts the notion of income equality. It concentrates wealth in the hands of
a privileged few while impoverishing everyone else it is no wonder that after
decades of empty promises of trickle-down economics, the Occupy Wall Street
movement in America gained much support from the public that saw the
incomes of the poorest shrink while those of the rich kept growing. Hence,
because large firms aim to maximise profits, they often exacerbate, instead of
alleviate, economic issues.
Lastly, large firms also contribute to much of the pollution and economic
degradation that the world faces today. In pursuit of low cost and high profits,
firms use technologies that are not environmentally-friendly and cause many
problems in surrounding areas. In addition, many transnational corporations
carry out operations through holding companies in host countries where
environmental laws are less strict. For example, in Indonesia, it is estimated that
some 170,000 hectares of natural forests have been cleared by Sina Mas and

Melissa Ng (17)
15S06H
Raja Garuda Mas, two of the largest pulp and mills producers. In China, many
cities, such as Guangzhou and Shenzhen, face a serious problem of air pollution.
The manufacturing industry in these cities has boomed, but so has air pollution.
Not only does air pollution have serious environmental consequences, it also
negatively impacts the health and quality of life of residents. Hence, big
businesses often bring with them negative environmental impacts.
In conclusion, while it appears that big businesses can bring about many trickledown benefits, I argue that that is too simplistic a view of large firms. For most of
these firms, maximising profits is their main objective. Coupled with poor
enforcement of labour and environmental laws, unintended consequences result,
that negate most of the potential positive impacts large firms can bring.
Undoubtedly, the abundance of resources available to large firms and their large
influence can help solve many problems today. But this potential will only be
realised if more firms are willing to sacrifice some profits in favour of equity and
also exercise more social responsibility, as global citizens.