Final answer:
The increasing influence of multinational corporations in Emerging Developing Countries is largely driven by the cost-saving strategy of outsourcing. While this practice has improved standards of living and provided new opportunities in EDCs, it has also led to job losses in developed countries and ethical issues such as the rise of sweatshops.
Step-by-step explanation:
The Increasing Influence of MNCs in Emerging Developing Countries (EDCs) and Outsourcing
The role of multinational corporations (MNCs) in the global economy has expanded significantly over recent decades, especially with the advent of globalization and the subsequent shift in production and service jobs to Emerging Developing Countries (EDCs). MNCs are entities that operate in multiple countries, controlling the production of goods and services across international boundaries. This phenomenon has been facilitated by the desire of MNCs to minimize costs, leading to a strategy known as outsourcing. Outsourcing involves contracting jobs to external parties, and often in the case of MNCs, these jobs are moved to countries where labor is more cost-effective.
Outsourcing has transformed the employment landscapes in both the developed and developing world. In developed countries, this practice has resulted in the decline of certain job sectors, particularly in manufacturing and lower-level clerical work. While in EDCs, outsourcing has introduced new industrial opportunities which have generally improved the standard of living. Investments by MNCs in local infrastructure, technology spillovers, and the availability of consumer goods are some benefits that have been observed in EDCs.
However, this shift also brings challenges. Companies that do not innovate or adapt by training their workforce for new types of jobs potentially face increased unemployment rates. Moreover, the rise of sweatshops and the infringement of workers' rights are often associated with outsourcing as companies seek to maximize profits. Outsourcing and offshoring are now commonly used by companies as a way to reduce costs and remain competitive in the global market, but not without social and ethical implications.
Despite criticisms, it's important to acknowledge that MNCs can act as catalysts for positive change by encouraging host governments to uphold human rights and environmental standards, reinvesting in local economies, providing community services, and partnering with NGOs. Ultimately, the influence of MNCs in EDCs is a multifaceted issue, with a balance needed between cost-saving measures and ethical business practices.