Krishna Kumar - Transnational Enterprises

Transnational Enterprises: Their Impact on Third World Societies and Cultures edited by Krishna Kumar

This book represents the first attempt to conceptualize the social and cultural impact of transnational enterprises on host nations and to provide empirical and analytical material on the subject. Well-known social scientists focus on three critical areas: social inequalities, knowledge systems, and lifestyles and values. Collectively, they advance their central thesis: TNCs not only affect the economic and political systems of a nation but by internationalizing production processes and facilitating the movement of products across national boundaries, they influence social structures and organizations, lifestyles, and the cultural identities of the people.

Dr. Krishna Kumar is a staff member of the East-West Center, Honolulu, where he coordinates a program of study and research on transnational interactions.

"... the present book is especially welcome..... Kumar has advanced the study of the cultural and social impacts of TNCs.... "

Louis Wolf Goodman, Yale University, in Contemporary Sociology 10, no. 5 (September 1981)

edited by Krishna Kumar

First published 1980 by Westview Press, Inc.

Published 2018 by Routledge
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Library of Congress Cataloging in Publication Data
Main entry under title:
Transnational enterprises, their impact on Third World societies and cultures.
(Westview special studies in social, political, and economic development)
Bibliography: p.
1. Underdeveloped areas--International business enterprises--Social aspects--Addresses, essays, lectures. I. Kumar, Krishna. II. Series.
HD2755.5.T69 338.8'88'1724 80-16759

ISBN 13: 978-0-367-21209-4 (hbk)

Several friends and colleagues have helped me in bringing out this volume. The very idea of my undertaking this task came from Dr. Karl P. Sauvant of the U.N. Center on Transnational Corporations. Dr. Verner C. Bickley, Director of the Culture Learning Institute, was instrumental in overcoming my initial hesitation in this regard. I very much profited from the suggestions of my colleagues, Drs. Mark Lester, Sripada Raju, and Robert T. Snow. I also solicited the help of Mssrs. Lim Ma Hui, Maxwell McLeod, and Robert Mashburn in various matters. My wife, Dr. P. Tahbazzadeh, was most helpful in the selection of material for this book. I sought her advice on endless numbers of articles, documents, and research reports that I considered for inclusion in it. Ms. Jenny Ichinotsubo did an excellent job in typing the manuscript while Ms. Deborah Weiner provided valuable editorial assistance. I wish to record my deep gratitude to all these friends.

I would also like to express my thanks to Mr. Frederick A. Praeger and Ms. Lynne C, Rienner, publisher and associate publisher of Westview Press, for their encouragement and support.

Krishna Kumar

Krishna Kumar

The main purpose of this overview of the social and cultural impact of transnational enterprises (TNEs) is not to articulate a sociological paradigm which can help to organize ideas, research findings, and substantive discussions on the subject in a theoretical framework. Nor is it to identify all possible kinds of influences and effects which TNEs as distinctive economic bureaucracies, linking two or more nations in an economic relationship, can have on social and cultural elements and processes. Our objective is rather limited: we confine ourselves here to a brief discussion of only those impacts which have been stressed in the growing literature on transnational enterprises. The discussion is analytical rather than theoretical.

Two limitations of the present, discussion can be mentioned here. In the first place, our focus is essentially on macro dimensions. Thus we do not examine the micro-level issues pertaining to what happens within the confines of a TNE in home or host nations, where people from different societies and cultures interact for rational, goal-oriented activity. In the second place, our emphasis is on developing nations. The term developing nations has undoubtedly lost some of its precise connotations and discriminating property in recent years for it has come to include nations such as Brazil, South Korea, and Taiwan which have sizable industrial sectors, as well as those countries which are yet to make any headway towards industrialization. However, despite its obvious limitation, we still find it of some heuristic value. We take it to be a residual category referring to those nations which cannot be classifed as industrialized and which have not opted for a socialist model of development. This overview is organized as follows: we begin with a working definition of transnational enterprises and briefly mention the recent trends and patterns in direct foreign investment. The second section examines the effects of TNEs on social structures and inequalities while the third section focuses on TNEs' impact on cultural systems. Finally, we explain the organization of this volume.

Since scholars have offered a wide variety of definitions of TNEs using different criteria-variables, it is necessary to mention that we follow the United Nation's definition which has the widest acceptance. Following this definition, TNEs are defined as the enterprises which "own or control production or service facilities outside the country in which they are based." These enterprises can operate in extractive, agricultural, manufacturing, or service sectors and can be private, semiprivate, or government-owned operations. Obviously, this definition excludes all those firms which do not own or control production and/or service facilities in foreign countries, and yet are involved in substantial foreign operations. The enterprises which operate within the confines of national boundaries have been termed as national enterprises (NEs).