Multinational Corporations in Developing Countries: Bringers of Working Standards or Modern Slaveholders

Abstract

The socio-economic role of multinational corporations (MNCs) in developing countries is heavily disputed. One the one side, they are regarded as agents of change that are able to generate economic and social benefits for the local population especially through the provision of employment. On the other side, however, the employment provided is often considered to be a modern form of slavery due to poor working conditions and below-living wages. In our paper we discuss whether MNCs are bringers of working standards that lead to improved working conditions or if they are modern slaveholders. For this purpose, we first discuss the relationship between MNCs and working standards, particularly with regard to organizational factors that influence the application of standards. Afterwards, we describe existing standards and their weaknesses. In the fourth part, we then turn to empirical studies which have examined to what degree working standards are actually implemented, before we end with a short conclusion and an outlook. We find that the application of standards is rather mixed among MNCs and that they are far from being significant bringers of change, despite particular efforts that are being made.