Multinational corporations from economically dominant nations often establish factories or overseas offices in developing nations. Corporations benefit from reduced labor costs and, in some cases, proximity to raw materials.
Critics of multinational corporations have accused some companies of exploiting the less-stringent labor laws of developing nations and maintaining unfair or unethical labor practices. Corporations have also been accused of conducting unethical environmental practices, including the disposal of waste materials and consumption of natural resources, and of adopting business practices that make it difficult or impossible for independent businesses to compete.
Though corporations may comply with the laws native to their host nations, many critics believe that corporations from economically dominant countries have a responsibility to maintain labor, environmental and ethical standards in keeping with their nations of origin.
Corporate advocates have responded by saying that overseas corporations often pay wages in excess of the average income for factory workers in the host nations. They add that corporations' environmental practices often exceed the legal requirements of their host nations. According to these corporations, competition is inherent to a market economy, and each company has a right to utilize any legal methods to promote their own brand above competing brands. In addition, some companies report that they could not provide their products economically to consumers without seeking out the lowest cost production environment.
The impression that multinational corporations exploit marginal communities has led to boycotts, demonstrations, and protests. Anti-globalization activists, known as anti-globalists, attempt to reduce public support for multinational corporations, thereby forcing the companies to restructure their labor, environmental and competitive policies. The degree to which corporations are responsible for acting outside of the social and political structures of the countries in which their factories are located remains a topic of debate.
In addition to corporate globalization, the modern debate also focuses on the perception that wealthy nations use economic power to exert social and ethical pressure on developing nations. Governments have been using trade and economic incentives to urge political change since the earliest days of imperial merchant trading.
Globalization advocates say that economic incentives enhance the safety and security of the global environment by creating political ties between nations and helping to end inhumane government practices. Critics argue that countries should be free to undergo an independent process of cultural evolution, and that the beliefs of one nation should not be applied to every nation. Operating globally can be challenging for multinational corporations because of the different views of the ethics of globalization and the clashes with local culture encountered. Successful companies have been found to employ individuals on the ground in the local country with the ability to translate and interpret local customs and expectations.
Anti-globalists believe that the disproportionate influence of wealthy nations will reduce or eradicate cultural individualism in the global society. Advocates argue that the global environment is currently undergoing a natural process of evolution, and that wealthy nations are simply playing a role in this process.