According to modernization theory, also known as evolutionary theory, societies undergo various steps of development; the most advanced being the consumerist society that characterizes Western societies. This implies that societies that are still in their early stages of development, which are common in third world countries, must emulate the Western societies both socially and in the determination of its values. This means that developing societies must discard their traditional values that entrenches religion and family in the center of social life and pursue individualism that is the norm of Western societies (Kendall 259). This theory postulates that this change is values present a path to prosperity. This theory is used as a justification for the domination by industrialized countries.
Multinational companies continue to invest in poor-developing countries to take advantage of the cheap labor force that is available there, and natural resources. The loop holes in the judicial systems of developing countries and corruption makes it the ideal destination for international companies. Some, like Apple Corporation have been accused of poor-working conditions in China, while others have raised concerns over environmental degradation. As these corporations invest in developing countries, they enhance modernization as they come with new lifestyles that will ultimately change the values of the local people (Kendall 271). These companies also bring new attitudes towards work. Despite the disadvantages associated with these corporations, they contribute immensely towards modernization of infrastructures in poor countries and the creation of employment. These will in turn contribute to industrialization and economic growth.
On the other hand, dependency theory, which postulates that the problems in poor developing countries are as a result of exploitation by developed countries. This exploitation is mainly through investments by Multinational Corporations without a consideration of local traditions, cultural equality, and local communities (Kendall 247). This has resulted in a circle of dependency where poor countries depend on stimulus packages, loans, and aid from developed nations. Since these companies choose which countries to invest in, they end that creating highly segmented labor markets that only benefit them in the long run. This has led to companies investing in poor countries if only they are the dominant player in the investment, which means that they just want to maintain the poor countries for the sake of labor, but not for their development.
Multi National Corporations have social and moral responsibility when investing in these countries. First, they must ensure that the working conditions and the pay meet International Labor Organization (ILO) standards; they must also adhere to the rule and regulations of the host country. They must also pursue sustainability to avoid environmental degradation. Lastly, they must allow the gains of modernization while ensuring a cultural sensitivity to already existing structures.
Multinational corporations continue to be accused of child labor and creating sweat shops in poor and developing countries as they search for cheap sources of labor. Sweat shops are working conditions that are dangerous and difficult, while child labor is employing underage children (Manheimer 73). In 2010, several multinational companies such as Wal-Mart, IKEA, LL Bean, and Abercrombie have been accused of perpetrating sweat shops in their factories, in developing countries. These companies employ workers who work for long hours under inhumane conditions for meager pay. The problems of these workers are compounded by the fact that when they attempt to form trade unions to fight for their rights, they face threats of being laid off by management, and considering the rates of unemployment and poverty in developing countries, such workers are forced to work under these conditions (Manheimer 39). Some of these companies continue to perpetrate child labor by using cotton that is sourced from countries such as Uzbekistan where child labor is rampant. Despite the fact that multinational companies pay a better wage than local companies, they should not take advantage of poverty prevalent in developing countries because they cannot pay the same wages in their home countries.
Although many countries have laws against child labor, they rarely impose them due to the influence that international companies have on local politicians. A company such as Nike has come under the spotlight for using child labor in Pakistan to produce soccer balls. Dutch accompany Advanta and Emergent Genetics of the United States have also been named as benefitting from produce from Indian farms that use child labor (Gifford 106).
Multinational companies have the responsibility of ensuring that they provide a safe working conditions and a fair pay for employees in developing countries. The excuse that it is the responsibility of the sub-contractors to provide such conditions is unjustifiable because these companies can reject products from contractors, who fail to meet the required standards. Although the constitution of the United States prohibits child labor and inhumane labor practices, it is difficult for it to reject goods produced using child labor because regulations from the World Trade Organization (WTO) prohibit member countries from rejecting goods manufactured using child labor (Gifford 137). This leaves the moral responsibility to international companies to ensure that children are not employed.
Kendall, Diana E. Sociology in Our Times: The Essentials. Belmont, CA: Wadsworth/Thompson Learning, 2012. Print.
Manheimer, Ann. Child Labor, and Sweatshops. Detroit: Greenhaven Press, 2006. Print. Gifford, Clive. Child Labour. London: Evans, 2009. Print.