The Changing Role of the CEOs in the Digital Age and What It Means for Them
The Changing Nature of Capital Allocation and Capital Expansion With the Digital Age well and truly upon us, the changes brought about due to the advent of this era have been many and multifaceted. Right from newer work methodologies such as Agile and the rise of the Gig Economy, the Digital Age has left no […]
Handing off the Project to the Process Owner
After the control charts have been created and deployed, the control phase of the DMAIC methodology comes to a close as far as the project is concerned. The solution that the team had set out to reach has now been reached. It is therefore time to transition the process from being a project to being […]
Different Types of Online Business Models
Almost all startups being funded nowadays have an online business model. This is the reason why they appear to be similar to each other. However, this observation is a flaw in the thinking of the untrained observer. Not all online business models are similar to one another. There are many varied forms of models that […]
What is Pareto Analysis and How it is Applied in Six Sigma Projects
What is the Pareto Principle ? The Pareto Principle was an observation of a famous Italian economist named Vilfredo Pareto. He was trying to analyze the distribution of income amongst the population of Italy. That is when he observed that 80% of the income generated went to 20% of the population. He then began observing […]
Business Continuity and Disaster Recovery – Important For Every Business and Organisation
Managing Business operations in current times is a big challenge. Apart from having to keep looking at the bottom lines and market shares, the managements have another major are to be concerned about which is to continually keep assessing the risk to the business from all quarters and build Disaster Recovery plan in place. It […]
The previous articles in this module discussed how international businesses expand into overseas markets both for selling their products as well as to extract the resources in mineral rich countries.
We discussed how the international expansion of these businesses has to equitable and follow the rules of justice. What happens when these businesses ride roughshod over local populations and insist on carting away the resources to their native lands? The result is that the local populations would be outraged against the exploitative practices of these multinationals. This has been the case with Shell in Nigeria, Vedanta in India, BHP in Africa, and other businesses in Latin America.
The reason for this resistance is that the communities and the people surrounding the locations where these businesses have plants feel that they are being cheated of their resources and are not being adequately compensated.
Indeed, if anything can be said about global capital, the local resistance is the phenomenon that has emerged consistently across the world in the recent past. The latest of the resistances is about the POSCO steel plant in Odisha, India where the native people are protesting against land acquisition, which they allege has been done forcibly.
While not advocating that the local communities are not within their rights to protest, the point needs to be made that the international businesses can help them with in a more equitable manner by sharing some part of their profits.
Without getting into the debate as to whether resources must belong to the native country and not to a foreign country, the fact that all countries gain because of the Ricardian theory of competitive advantage wherein a country with resources can export them and import something that is not available in it.
The bone of contention here is that the price at which the resources are being exploited is not just and fair and hence, there are calls for proportional pricing and compensatory royalties.
The multinationals respond to this criticism saying that the native countries do not have the expertise in extracting and developing the resources and hence, these companies are actually helping them. Therefore, it follows from this that the best way to deal with the global capital meeting local resistance is through dialogue and the evolution of an international mechanism to deal with such cases.
The protests against global businesses are growing by the day and hence, there is an urgent need to tackle this issue before the very stakeholders in these businesses start to lose out. There is an active role for governments in this case as they are the ones who set the rules for engagement.
Therefore, along the lines of what the Supreme Court in India has done which is to throw open the question about pricing of resources (all kinds including spectrum) and how they must be managed. This is the way ahead for other countries to follow and it remains to be seen how India deals with this issue so that other countries can replicate its experience.
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Cross Border Mergers and Acquisitions and Some Recent Trends in this Field
February 12, 2025
