Global Big Business Case Study

4587 Words 19 Pages
Register to read the introduction… Currently in China, for example, minimum wage should be no lower than 40% of the average wage for any particular area. In Guangzou and Shenzhen, the first cities that were legally allowed to approach foreign big businesses for investment, the minimum wage to average wage percentage is the lowest in the country. While this may reflect the prosperity of the rest of China, this is unlikely, as it is estimated that 200 million people across China live in poverty. Instead, this is likely to be partially due to the ‘hukou’ system and the effect it has on the movement of migrants, a governmentally and culturally ingrained fact of Chinese working life. Migrants cannot work without the correct papers, which can cost a month’s wage to buy. Companies in industrial cities loan migrants money to buy these papers and then withhold some of their pay or the papers themselves, making it very hard for the migrant to move jobs should conditions become unbearable. As migrants will often travel alone and be housed on-site by the company they work for, the risk of poor labour standards is high. The system is lucrative for local authorities as the migrants pay local taxes, but are not covered by local welfare benefits such as health care. As the official workers’ union is government controlled, it has no autonomous power to …show more content…
In 1997 PepsiCo withdrew from the Union of Myanmar, following Levis Strauss’s example and citing humanitarian issues as its main catalyst for change. The withdrawal was completed even though Myanmar was one of the few territories in the world where Pepsi enjoyed greater success than rival Coca Cola. They did not explicitly oppose the political regime, but their actions were clear. In 2004 in the New York Times, Pepsi’s spokeswoman Elaine Franklin had attacked Coca Cola’s comments on the political situation in Myanmar, insisting that ‘it is pretty arrogant of any company to decide to make its own foreign policy.’ However, this is a suitable summary of what big businesses do need to do to positively affect public opinion. In contrast to ignoring suppliers’ poor labour standards, corporations should actively engage with them to achieve change, which will be driven by public opinion and will become competitively advantageous as their reputation rises. Hu-DeHart insists that it is ultimately large retailers who set the price of labour (2002) and therefore it is these retailers that need to be socially responsible and socially accountable through transparency of process, from raw material acquisition to point of sale in order to win

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