Dynamics of multinational corporations

In this case, governments and international bodies are responsible for regulating the behavior and conduct of business by the transnational corporations. Governance is the actual implementation of the rules that have been set by the various authorities in their jurisdiction. A treaty is a formal agreement with details of how a specific state of affair shall be run or conducted among the concerned parties. Multinational companies had for a long time before 2014 dominated the global market of sales and production and was often conducting their businesses in a way that most favored them laying more emphasis on the production and the profits at the cost of the processes of achieving them (Averchenkova, Alina, et al 1; Birkinshaw 1). These transnational companies had a trend of selecting operation countries where they could make more profit without facing a lot of restrictions and bottlenecks.

However, despite the major profits it made, due to the lack of any regulations, its operations had some enormous effects on the part of the east Africans who became the victims of atrocities and violations of human rights besides factors like the environment being destroyed. In recognition of such and many other similar cases, the international community was called to the attention of rising to the occasion of implementing some orderliness in business conducted by transnational corporations in an attempt to achieving fairness in business and adherence to human rights and other ethics in business. The United Nations, being one of the most prominent and most effective international organization had some of its member states- Bolivia, Cuba, Ecuador, South Africa and Venezuela propose some regulations on the conduct of transnational corporation with the aim of instituting orderliness and humanity.

The proposal mainly focused on the issue of the observance of inalienable rights by the transnational companies. In this connection, the multinational companies were expected to adhere to the human rights even in countries where such laws do not exist. The most significant regulatory document is about the observance of the human rights by all multinational corporations. It requires that all these companies prioritize on preserving human dignity. The policy applies across all points of interaction with humanity including employment and sales. The regulations bar all transnational company from practicing any forms of forced labor, servitude, and corporal punishment. It also bars multinational companies from exhibiting any inhumane treatment on both the customers and employees besides demanding for a corporate social responsibility from the corporations.

For this reason, these corporations must ensure that it does not pollute the environment for the surrounding community in its production processes, which in most cases take place in the developing countries. This move has helped in promoting proper business environment for many parties involved in businesses. The requirement for community participation has also helped in elevating the lives of many people in the new regions that the multinational corporations invest in (Singh, B. J. R. The regulations should not only be set within the contexts of production but in all areas where there is human interaction. In most cases, the multinational corporations do not only produce from the developing countries but also make markets from the citizenry. For example the Coca Cola Company produces its soft drink products from different regions of the world and these regions of production also offer market to the company’s products.