Responsible Enterprise: MNCs Role in Reducing Global Inequality

This essay critically examines the role of multinational corporations (MNCs) in addressing global inequality, focusing on the United Nations Sustainable Development Goals (SDGs). It discusses key global challenges like climate change, pollution, violence, education, unemployment, corruption, drug abuse, and terrorism, highlighting their impact on inequality. The essay explores the impact of the private sector, particularly MNCs, in society, including their influence on economic, social, and environmental issues. It defines responsible enterprise and analyzes the role of government in facilitating or inhibiting such practices through regulations, awareness creation, and the establishment of CSR agencies. The essay also delves into the role of international business and foreign direct investment in reducing inequality. The analysis draws on various academic sources to provide a comprehensive understanding of MNCs' responsibilities and their potential to contribute to a more equitable global landscape.

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ROLE OF MULTI-NATIONAL CORPORATIONS IN REDUCING INEQUALITY
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A multinational Corporation plays a crucial role in the implementation of Sustainable
Development Goals. According to the United Nations There are 17 goals set for sectors
across 169 countries. These goals provide qualitative and quantitative objectives with respect
to economic, social and environmental goals for the purpose of Sustainable Development.
This report specifically focuses on Reduced Inequality, which is a social issue.
The key global challenges of the 21st Century are Climate Change where the
temperatures are rising on a global scale and the temperatures are expected to rise from 2.6
degree Celsius to 4.8 degree Celsius within 2100 year. As a result, the weathers will become
extreme and food crisis will prevail all over the globe. Natural resources will deplete largely
and non-curable diseases will spread all across the world. The only solution is spreading
more awareness among the people about greenhouse emission and finding alternatives of
fossil fuel. The world has to move away from these nonrenewable sources of energy to more
green energy like solar energy and energy generated through fracking. Another process is
reforestation. Here the nations and Government will play a huge role in transforming the
nation from a fossil fuel consuming nation to a green nation. Pollution is the friendly enemy
of humankind. It is one of the hardest global problem to fight against. Among these, the most
devastating are water pollution and littering the ocean floor. This directly effects the aquatic
life, which creates an imbalance in the other aspects of the globe. Among others, noise
pollution and air pollution are also very dangerous. The amount of effluents released into the
environment on a daily basis effects the human food chain and pollution has already effected
many people around the world. To extend the lifespan of our planet it is very important to act
more responsibly. Today violence has the answer to every question. Around the world,
people are becoming violent for small issues. The use of social media is acting as a catalyst to
spread violence. Recent times have seen devastating violence like the Arab spring, which has
killed almost half the population of Syria. Governments are failing on a daily basis due to

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crisis and fight for oil. The stability and role of the government is very crucial in this respect.
It must act tactically and analyze the problem before using violence against violence. Well
Being and Security is one of the global issues faced by the people. The best example of Well-
being and security is the United Nations. The United Nations effectively uses its forces tying
up with the local Government and applying UN Peacekeepers. These forces are deployed in
severely problematic areas such as Nigeria, Uganda, and Syria to fight against the social evils
such as the drug cartels, religious wars and so on. These actions have successfully restored
peace in various nations. Low levels of Education are a big issue, which is increasing
inequality. Today almost 72 million children under the age of 5 years throughout the world
do not receive formal education and are not yet enrolled in primary schools. This is leading to
higher variance between the rich and the poor leading to inequality. Poverty is the biggest
result of such an event. Different organizations are such as UNICEF and CRIY are working
to reduce such instances. These organizations use various tools and resources to fund and
initiate more enrollment in primary schools. Unemployment and Under Employment has
become a huge issue that is increasing ineaquality. Today the employment generation to
population is decreasing and dependency is increasing largely. In addition, lack of
employment is affecting the overall demand in the market, resulting in increased poverty.
Corruption has emerged as the base of the parallel economy today. Governments are
becoming corrupted which is directly affecting the poorest sections of the society. Thus,
violence is increasing and governments give a blind eye to these problems.Drug Abuse,
according to the United Nations report is affecting more than 200 million and is creating
financial inequality by generating black money in the economy. The common drugs are
marijuana, cocaine, LSD, morphine, hash and many more. The substance abuse is prevalent
among both rich and the poor and it is a big issue throughout the globe. Governments are
tying up with the UN to combat these problems. Today terrorism has become a huge issue

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throughout the globe causing insecurity and fear. This has led to the deaths of millions of
innocent people. On the other hand, people are pushing themselves to the extent of poverty
through this process. The civilians feel defenseless and lose faith in the state. Therefore, to
combat this problem National Security has to be increased and promotion of justice has to be
used as a tool to combat the evil of the society. The regimes for punishment has to be severe
to set examples to combat these fights.
Multi-National Corporations play a huge role in reducing inequality directly and
indirectly International Business has categorized poverty and inequality into four types which
are Inequality and Trade, Multi National Enterprise in under developed countries, Business in
the base of the Pyramid and Microfinance. The first two category deals with Foreign Direct
Investment and international business and the last two categories deal with initiatives for the
poor. Some of the requisites are Cross National investments in the form of Foreign Direct
Investment to support the growth and development of Economic Ties and Interest of an
emerging community. Specifications and Configurations of Nation’s business structure like
lower power distance, Sound training system, adequate national and state expenditure. These
are highly associated with chances of wealth creation in the particular state and proper
employment opportunities. Liberal trade between the developed nation and the
underdeveloped nation where the tariff rates are moderately relaxed for the purpose of
development of the underdeveloped economy.
Impact of the Private Sector on the Society has to be considered as it plays and important
role to provide a basic structure in the economy. The three sectors Agriculture, Industry and
Services are supported by the private sector. Directly or indirectly, private sector plays a huge
role in creating a circular flow of income in the economy. Almost 98% of the global economy
is dependent on the private sector and it employs 70% adult population throughout the globe
(excluding the unorganized sector). The role of the private sector plays an important role in

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uplifting the economy. The private sector is responsible for mass production of goods and
services. These goods are services are procured to billions of people around the globe and
making their lives better every day. The private sector has the capacity to generate the largest
proportion of the population. It employs millions of people who are now able to afford a
quality life for themselves and their family. The private sector pays almost 95% of the taxes
to the government based on which the annual funding and budgets are created. A bad private
sector containing economy generally are very poor and more than 40% of the people are
under the poverty line. The private sector today employs large number of women in the
organizations and they are emerging as a powerful workforce in the economy. Today
Corporate Social Responsibility is mandatory in most of the countries in the world. The CSR
of the organizations directly engage in helping the poorest and helpless section of the society.
Supporting orphanage to reduction in poverty programs are exponentially increasing in
developed and developing nations of the world and increasing the long-term efficiency of the
population of the country.
Responsible Enterprise is defined as the organizations, which actively participate in their
corporate responsibilities and through all of their business operations, strategies, tactics and
business practices increase the positive relations with the stakeholders and tries to maximize
the sustainability and restoration of the natural environment.
The government plays an important role in facilitating these Responsible Enterprises.
Creating an Enabling Environment is a huge responsibility of the Government where it has a
huge role to play to facilitate the socially responsible enterprises. To create an enabling
environment, firstly the government needs to create laws and regulations to support the
Organizations from the legal point of view. Many countries are facilitating the organizations
to create a positive environment to enhance corporate social responsibility. The policy
makers must imitate the regimes of other countries who are successful in providing a friendly

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environment. Awareness Creation and Gaining Public Support is another area where the
Government must try to fill the Knowledge Gaps. No organization wilfully will contribute to
the CSR activity because it is directly effecting the profit of the organization. So to solve the
problem the stakeholders must be used to facilitate the initiatives. Establishment of Corporate
Social Responsibility Agencies is another responsibility of the government where in many
nations they have decided to establish special agencies with a dedicated mission for the
promotion of CSR practices in many nations. Making Reforms in Regulatory Framework to
meet CSR standards in addition will enable Governments in forming standards to assess the
CSR agencies and their performance in serving the society. On the other hand, the
government will get to know about the legal requirements and budget related issues.
Therefore, we can infer the importance of Corporate Social Responsibilities and how they
have a positive impact in the society. The problems in today’s world have also been
examined to understand the major problems that are pushing the world to its end. On the
other hand, the role of United Nations and various Governments have also been critically
analyzed.

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