MNCs: Saviours or Saboteurs
Multinational Corporations (MNCs) are those private companies that work in more than one country. They produce or provide goods or services of highest quality and according to the latest global norms. They also employ the best human resource in a country and thus build brand images that are unique, stable and above all saleable.
In India, MNCs had arrived in the mid-sixties of the last century. Colgate, Palmolive and Coca Cola were the most trusted names of those times. The sixties also saw the presence of the drug giants. Glaxo, Nicolas and other drug majors gradually made deep forays into the Indian markets as the population demanded more medicines. But our economy remained a mixed one and our government always look at the MNCs with suspicion. During those times, the concept of MNCs was not born. The Japanese had just started their marathon run in the field of consumer electronics. They were disliked by most of the Indian consumers because of nil credibility.
However, Indians could not give full sopport to Coca-Cola due to political reason. The company was sent packing during the seventies; those were the times when relations between India and the USA were at their lowest ebb. Glaxo Biological Evans, Smith Kline, French and Pfizer were other’ drug majors, which firmly established themselves in India during the midseventies. And then, came the Japanese-highly efficient, cheap, determined and techno-savvy. They introduced products of the silicon age, which we fondly know as semiconductor revolution. Radio, television, wireless, electronics telex systems, etc, were in vogue. Music got a new meaning when the Japanese major like Sony, Matsushita and Sharp introduced he-fidelity stereo system. The revolution had begun!
During the dying years of the seventies, the stage was set in India. During the last years of eighties, this stage was re-set by Intergrated Circuits, CNC machines, drugs for fighting heart attacks and the like. So, the Indian’s had to rely on MNCs, who had become synonymous with technology, comfortable products and cheap rates. Most of MNCs entered India during the late eighties or early nineties. The government favoured their entry because of its changed (and liberal) policies related to economic reforms. Several MNCs established their offices and factories in urban centres of India. Some even went to villages and signed deals in collaboration (partnership) with the Indian firms. Sales soared and FMCGs became the hot goodies on the television shows and in advertisements. Cable TV networks, satellite connections and Internet connections did the rest of the job. Western culture brought the concept of consumerism or “fast eaters.” Naturally, a nation that had a population of above one billion had to be given these new products, services and gizmos. And MNCs filled the void that was left by local manufacturers. It is surprising to note that not a single firm has been able to compete with Colgate Palmolive in the tootphaste market; it is the undisputed leader in this segment even today, despite the fact there. then are nearly one dozen competitors.
This credibility did not seek in the minds of the Indian consumer in a day. It took several years and billions of Dollars to make these products and services instant success. And there were fiascos too. The cases of Enron and Cagentrix are the two glaring examples, which bluntly tell us that we may not have any collaboration in the power generation sector. Although,. Enron has displayed several flaws (like high price of power kWh at Dabhol Power Corporation), yet we cannot deny the fact that we also made a mess of the issue and moved in an unplanned fashion.
The free market economy of India has made the task of MNCs quite easier. Many of our readers may contend that we are not “completely free,” if they keep scandals, scams, corruption and the PSUs in their view. But this ultimate change is inevitable. If ours is not a fully free economy today. it shall be one after fifty years. The MNCs realise this fact and so, they have started establishing themselves in India—physically and psychologically. Several MNCs align their advertisement with local festivals, religions, beliefs and political sentiments. They have become a part of our culture quietly and in a stealthy manner. Thus, saviours may be deemed saboteurs by many a political outfit. We agree that the opponents of these global economic giants are not totally wrong. They are saviours on many fronts—medicines, heavy engineering, information technologies, medical diagnostic equipment, aircraft, chemicals, rubber products and electronic gadgets. New technologies and devices have put Indians on the path of ultimate progress. No wonder, we may become a developed nation soon due to inflow of capital, technologies, consultancy and manpower into this land. Thus, MNCs have contributed a lot of our economy and will do so in the future too.
MNCs also indulge in political manipulations and wars. During the eighties, Glaxo was boycotted by several Indian unions, to quote an example. Labour is paid well but in most of the automated factories of a MNCs, there is least number of the working class. Their culture promotes efficiency and in India, it means making more workers redundant.
MNCs are also being allowed to enter those sections, which were hitherto deemed the exclusive areas reserved for the Indian firm. Ironically, we must state that the MNCs would do much better in those areas, thus putting out our own coin under shade. Banking, insurance, car production and telecommunication service are some of the areas in which, they would outperform Indian firms. Thus, Indian firms would either be required to meet the challenger or fade into oblivion.
Finally, every MNC comes to India earn money. In a free market system, any amount of money transferred by a .MNC to its parent country. This would lead It) drain on our precious foreign exchange reserves. We cannot check th0 flight of this capital. Had our own enterprises been efficient, productive and innovative, we would not have threats of this kind. It is a pity that we import shirts, jeans and electronics gadgets, whereas we can manufacture them at much cheaper rates in India. Our quality control norms are poor and so, customers get swayed by the quality of products and services of MNCs. Our own firms (like NIT, Reliance and RITES) are multinationals. So, we can easily emulate them.
We can conclude -by stating that we need MNCs as we are .a part of the global treading culture. We must allow them to operate in those high-technology areas in which, we lack the expertise. We should also import technologies through them but we should manufacture products (or services) in India. MNCs should not be viewed as saboteurs. But they must not be allowed to control the destiny of our nation.