Relationships between governments and organizations are a complicated matter. On the one hand, governments are interested in foreign businesses establishing local production. It helps provide workplaces, cheaper goods and offers a significant boost to the country’s economy. On the other hand, companies are interested in cheap labor and resources, which could be acquired in countries such as China, India, Vietnam, Russia, and others (Bai, Sarkis, & Dou, 2015). At the same time, the relative poverty of these countries is what makes them so attractive to foreign investment, as it allows them to receive more while paying less. Unless the country’s government is weak and inept, large corporations do not have enough power to force a government to change rules and regulations already in place to make businesses more profitable. The relations between international corporations and the Chinese government exemplify this trend. Despite various restrictive and draconian regulations, companies continue to operate in China and use it as a primary source of the cheap workforce. Preferable economic conditions are what make a region “untouchable,” which is the case with many oriental countries (Baylis, Smith, & Owens, 2017).
Instead, companies prefer to change the situation in these countries by providing investments. For example, India offers a large work pool but does not have the infrastructure and the educational facilities to effectively supply international companies with cheap but capable and educated workers. At the same time, the state of Indian infrastructure (roads, electric plants, etc.) is currently underwhelming, which hurts production potential. In order to change the situation and better accommodate their businesses, international corporations are actively investing in Indian education and infrastructure (Adukia, Asher, & Novosad, 2017). Despite the claims of social missions and improving lives, companies are primarily driven by profit, not social or welfare concerns.
References
Adukia, A., Asher, S., & Novosad, P. (2017). Educational investment responses to economic opportunity: Evidence from Indian road construction. Web.
Bai, C., Sarkis, J., & Dou, Y. (2015). Corporate sustainability development in China: Review and analysis. Industrial Management and Data Systems, 115(1), 5-40.
Baylis, J., Smith, S., & Owens, P. (2017). The globalization of world politics: An introduction to international relations. (7th ed.). Oxford, UK: Oxford University Press.