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The Governmnet, TNCs and NGOs Working in a Relationship « nayabaftab

Globalization is the name which has caused all the major developments around the planet which includes the emergence and developments in the capitalist domination by the Transnational Corporations; the working and the power of the NGOs and the expansion of Governmental controls. We will concentrate on three perspectives or the vision called Civilisation Social Democratic Moderate Green Vision (This scenario is a combination of the Buckman 'Globalisation', 2004 and Zadek, 2001 'Civil Corporation' analysis)- firstly the role of transnational corporations in a global capitalist economy; secondly whether the political bodies are subordinate to the TNCs influence over the global economy; and thirdly the work of Non-Governmental Organizations (NGOs) on world scale.

Firstly we will discuss why Dr. Simon Zadek, a Senior Fellow at the Centre for Government and Business of Harvard University's Kennedy School, believes that the relationship between big businesses (like TNCs) and NGOs need to change and have been changing. Today the emerging economies and the developing nations require international investments from big businesses like the TNCs; similarly like these big businesses require access to resources so that they can use it to fulfil their capitalist driven need and help in the economic growth of the nation. But if we try to understand that any economic growth of the nation is not useful until the society and people at large make the most of it to generate profit and income, while keeping in mind the environmental issues and social risks. Therefore, this explains that if we need to achieve sustainable development it can be achieved in a mutual agreement and a better relationship between the Transnational Corporations (TNCs) and Non-Governmental Organisations (NGOs). NGOs primarily concentrate on long-term benefits for the society so they should take up the challenge of maintaining good relationships with TNCs to ensure public interest is served. Zadek argues that the NGOs are new source of power in the modern society and the TNCs need to borrow trust from the NGOs because the NGOs are trust upon by the people ignoring the fact that they are undemocratically run (e.g. Green Peace). The vision of partnership between the NGOs and the TNCs could push TNCs to behave responsibly towards the society and control ethical standard through 'Ethical Leadership'. Most of the time TNCs have been seen as an arena linked with exploitation of social and human rights (e.g. competition over resources between rivals) but in collaboration and support of the NGOs this negative view of the TNCs can be changed because NGOs are bodies which projects a sense of non- financial purpose which builds their creditability in the eyes of the society and they also build a sense of long shared values with external stakeholders. The relationship between TNCs and NGOs is building up also because with the support of NGOs some of the low- trust firms are less likely to get the 'benefit of doubt' from regulatory bodies. Often TNCs join NGOs which are of some kind of relevance to their business e.g. Coca- Cola and WorldWide Fund for nature (Conserving fresh water basins).
Bothe the TNCs and NGOs benefit from this mutual relationship in a way like the TNCs can provide NGOs with aid, skilled labour useful for them, involve them in setting up an agenda and long term projects; in return the NGOs provides TNCs with labours with improved understanding of NGOs, trust in the eye of the society, access to the areas of society not seen by the business community.

Now we will concentrate on the idea of Zadek which says that TNCs could raise both their ethical standards as 'good corporate citizens' and their profitability. In the year 2006 the total sales of top 200 transnational corporations were bigger than the combined GDP of 187 countries, more than 30% of the world GDP and these TNCs employ less than one-third of the entire world population. Ethical standard in TNCs can be seen as a concern with the good and bad behaviour in business context. TNCs can raise their ethical standards by being good corporate citizens by being honest to their consumers, employee, distributors, suppliers etc; not participating in any violent movement; by offering safe and standard product for the consumers and environment friendly; no false adverts should be made about the product just to raise its standard; disclosure of all the risks might be associated with the product (e.g. Tobacco); identification of extra cost added to the product; avoiding false and misleading adverts; no price fixing; treating clients and suppliers fairly. By following basic ethical standard in the production, promotion and distribution of the good and by being fair from their side TNCs can be regarded as 'good corporate citizens' and by doing this the TNCs position will rise not only in the eyes of the consumers but also the suppliers, distributors and the market; which in turn will help them to gain respect in the society. Gaining respect in the society means the firms product has a good will and consumers would wish to buy the product, thus increase in sale and more profit; distributors and suppliers would willingly sell materials to the firm because of its respect in the market at low price, thus increase in profit. Thus by following simple ethical standards the TNCs can be both ethical in nature and increase profit at the same time. According to the 'Mecca Culture' firms with good ethical standards are always rewarded because financial institutions are willing to offer long term loans to institutions with a good ethical standard and reputation; even the consumers are willing to pay more for ethical brands; once the firm establishes itself as possessing an ethical reputation it can easily compel its rival to follow their footsteps. TNCs who are ethical in nature can even pressurise the government to introduce better regulations which would impose costs on their rivals and help the firm with ethical standard a competitive advantage.
TNCs can largely benefit from a shared market; thus they can join hands with other leading firms in the market to set-up a private ethical standard and can give a hard time to their rivals who are not yet a part of the 'ethical' team.

Finally we will discuss Zadek's vision of a more ethical future, governed by evolving codes of conduct agreed between governments, leading TNCs and NGOs, is both achievable and desirable. A more ethical future is possible firstly if the TNCs actively engage in the promotion of the governance regimes able to bring about the integrated and sustainable development of the surrounding community; secondly in order to keep the TNCs undermined to a certain level the NGOs have to be in good relationship with the TNCs but also need to be locally grounded. The emergence of TNCs, is claimed to be "one [of] if not the most important institutional innovations of our time" (Kochan, 2006, p. 12 –italics in original). We are aware that the TNCs are increasing off shoring work to developing nations in order to get cheap labour, which has resulted in the emergence of the NGOs in the field of human and workers right (e.g., Boli and Thomas,

1999; Braun and Gearhart, 2004; Riisgaard, 2005). As TNCs have become influential globally the NGOs have joined hands with them to raise ethical standards emerging as a second type of representatives of workers' rights alongside unions (e.g., Eade, 2004; Riisgaard, 2005; Spooner, 2004). While the relationship between the government and the TNCs is often seen as uneasy because TNCs have sometimes been politically dominant because of their high influence but now times have changed because all these three are interdependent on each other. The TNCs are seen as international investors who invest in developing nations and bring about employment for the host country; while the TNCs needs the support of the NGOs to raise their ethical standard in the eyes of the market; while the government is an institution which keeps a check on the influence of the TNCs and allows free trade. Thus the government, the TNCs and NGOs need to work out together on a set rules and regulations to produce not only environmental friendly products but also to achieve an ethical future and not exploit the resources and leave nothing for the coming generations. TNCs are "too important and too dominant a part of the global economy for voluntary codes to be enough… they need to be brought within a framework of global governance, not just a patchwork of national laws, rules and regulations", says the UNDP Human Development Report 1999. Corporations need to be regulated at the international level if their power is to be harnessed. Thus to reach the ethical standards the TNCs now talk about corporate responsibility to maintain their standard as a good corporate citizen in the market. Thus TNCs working along with the government and NGOs and each of them working along with each other can raise the ethical standards and also help to minimise the exploitation of resources and labour of the host country as much as possible. Though TNCs create employment for the host country in return they get support from local and international NGOs; they can take advantage of cheap labour and abundant resources available at a lower price. Therefore instead of exploiting TNCs should work for a sustainable developmet of the society as a whole with the support they can receive from the NGOs and the Government. Thus a more ethical standard is achievable and desirable but it cannot be possible until all three the government, the TNCs and NGOs join hands and come up with a mutual agreement for the betterment of the society and the people.
Thus ethical leadership by the TNCs and NGOs backed up by the government legislation as the 'last resort', to improve the environment,health and safety, human rights and social standards. Ethical leadership is possible in a 'Mecca Culture' as discussed above where TNCs lead with good moral values and ethical standards and join hands with others in the market and for better relationships with the NGOs in order to push their rivals to follow their footsteps and even represented by the government. Within the ethical framework all can gain benefit; the TNCs can be looked upon as ethical and can even gain profit in the market; government can get the control they require while the NGOs can carry their duty of minimising the TNCs power to a certain level.

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