Disruption of domestic social policies by transnational corporations


The disruptive impact of the activities of transnational corporations on the social structure and patterns of society has to be viewed in the context of a country's over-all socio-economic objectives. In developing countries, such objectives relate particularly to the amelioration of poverty through increased employment and more equitable income distribution, greater regional development, and rapid growth of local skills and capability to meet essential socio-economic needs. The interaction between such developmental objectives and various social aspects such as the structure of social institutions - family, religion, tribe, social class - and social norms and values differ from country to country. The role of transnational corporations in affecting social patterns and conditions can, however, be very significant through their influence on employment and industrial growth and on the pattern of production and consumption.

The introduction of certain consumer goods may require or lead to changes in national consumption patterns, which in turn have implications for the way incomes are spent, levels of nutrition and health, and cultural values. The social effects related to the supply of consumer goods in developing countries are of obvious concern.

The production process, that is, the mix of production factors (capital, land and labour) and the characteristics of the technology (labour-intensive or capital-intensive) used by the affiliates of transnational corporations may have repercussions on employment levels, on the distribution of incomes (both between capital and labour and between different types of labour) and on the local absorption of technology. Important factors conditioning the effects of a transnational corporation's production process are the choice of location within a country, the type of labour employed and the training opportunities made available to local employees. Transnational corporations may also affect working conditions - wages, hours, benefits, health and safety measures.

Related UN Sustainable Development Goals:
GOAL 8: Decent Work and Economic GrowthGOAL 16: Peace and Justice Strong Institutions
Problem Type:
D: Detailed problems
Date of last update
04.10.2020 – 22:48 CEST