Sustainability

Executive Summary

Sustainability is one of the popularly emerging principles in project management and is rapidly becoming a critical success factor as considered by some businesses. However, there are also a number of other critical success factors in project success which include time, money, and the involvement and skills of employees and management. However, sustainability is viewed as socially responsible behavior and may be beneficial in promoting a business’s sales and media relations. Contrarily, some businesses still view it as a fourth constraint in project management against time, scope, and money.

Businesses such as Zara’s and Nike have implemented sustainability in their project specifications and have gained a favorable reputation with consumers. However, while all companies may not be duly aware of how to implement such processes, knowledge transfer may be an important consideration in the further implementation of sustainability principles.

These issues are further discussed in this proposal and outlined in the form of research questions for the final dissertation. The data for the dissertation is proposed to be a mixture of qualitative and quantitative data which will be in the form of a literature review of secondary data and a questionnaire dispersed to 30 employees in 3 project-based organizations. Results will be combined to arrive at an appropriate conclusion and recommendations will be made accordingly.

Introduction

Project management is one of the most vital disciplines within business management and is crucial to economic prosperity for both the public and private sectors. While there is ample emphasis upon project management within various industries, it is often seen that many projects fail due to a lack of emphasis upon critical success factors. As there are numerous factors that affect a project’s success, it is often difficult for managers to choose those that are most vital in improving the success of a project.

As the business environment is highly competitive and complicated, success factors for a project are likely to be relative to the industry the project is aimed at and the objectives that the individual project is trying to achieve. While efficiency, cost, and time management are all vital resources within a project or any business process, managers are always aiming to reduce the cost and the time allocated to each project while also aiming to increase efficiency, productivity, and turnover. Hence, it is generically considered that projects which are completed within budget and on time are successful. However, with increasing research it has become evident that there are numerous other factors which affect the success and outcome of a project such as the involvement and decision power of leaders and managers, the skills of employees, the organizational culture practiced during the project, the level of teamwork shown by the team, and many others.

Accordingly, the contemporary business environment has recently explored a new concept, sustainability, which is becoming highly popular amongst society and may also be considered as a vital factor to success for businesses in the future or may already be considered so in the present. With the quest to improve the environment and ensure businesses implement environmentally-friendly processes, society is becoming highly conscious of businesses performing unethically and harming the environment. Thus, this increases the pressure upon business operating in the contemporary environment to adopt sustainable processes which are environment-friendly.

Literature Search

Sustainability is a highly interesting and important concept in the contemporary business environment because there has often been heavy debate regarding the necessity of its adoption by businesses. While some businesses may easily be able to adopt appropriate sustainability processes, it is more difficult for other businesses to implement such processes specifically in the industrial sector. Thus, while aiming to implement sustainability may raise a business’s costs substantially, choosing the correct manner in which to implement sustainable practices may also substantially reduce a business’s operating costs and other costs. Moreover, the current business environment demands businesses to be socially responsible and ensure that they perform ethically ( Lindsey,2011). Thus, a business implementing and including sustainability as a criterion in its project specifications is likely to gain a good reputation in the corporate world, media, and society which may in turn benefit the business in the form of increased sales, higher consumer confidence, and positive press releases.

Recently, it has been seen that organizations are increasing their emphasis upon sustainability and consider it to an extent of 25.9% in their project management specifications. While this does show a positive trend, it also shows that business may not be implementing sustainability in their project specifications because of adopting a socially responsible approach, but is more aimed towards adopting a “less unethical” approach. This is to ensure that they can escape the blame when questioned regarding the manner in which they run their business.

However, there is no doubt that there is an increasing emphasis upon principles of sustainability and awareness of social pressure upon businesses. Companies such as Zara, Toyota, Nike, and many others have changed their production processes in order to make sure that they uphold sustainability as a principle and thus, these companies have increased their credibility in the consumer market. However, in order to increase the emphasis upon sustainability it is essential to indulge in knowledge transfer between industries and businesses to properly disperse information regarding the importance and applicability of sustainability principles. Such information dispersion and knowledge transfer may be organized by large governmental or business organizations to facilitate open communication between businesses in order to find viable solutions.

However, the problem of the perception of sustainability as a further constraint upon projects in the essence of time, cost, and scope also is widespread. Accordingly, this dissertation proposes to discuss the critical success factors affecting businesses today, how sustainability affects businesses today, the importance of sustainability and the reasons why it is considered interesting, corporate social responsibility as a determinant of project success and gaining contracts, knowledge transfer as a determinant of the application of sustainable principles, and whether sustainability is viewed as a fourth constraint in project management.

Objectives

• Discuss the Critical Success Factors affecting businesses in the contemporary business environment
• Determine the importance of sustainability as an emerging critical success factor in project management
• Illustrate the examples of businesses who have adopted sustainable practices successfully
• Discuss the benefits of credibility when adopting socially responsible business practices
• Discussing the importance of knowledge transfer in implementing sustainability principles
• Analyzing the extent to which sustainability is considered a fourth constraint in project management
• Research Questions:

Main Research Question: To what extent is sustainability considered a critical success factor in project management in the contemporary business environment?

Subsidiary Research Questions:

• How does the implementation of sustainability affect the project outcome
• How does sustainability affect a business’s credibility and image of being socially responsibleIs this beneficial for the business
• What is the importance of knowledge transfer in the implementation of sustainability
• To what extent is sustainability considered a fourth constraint in project management besides those of time, cost, and scope
• Research Design

Data Collection: The study is designed to be an exploratory study which will investigate the concept of sustainability in businesses today. The study will make use of both quantitative and qualitative data in order to further explore the research questions outlined above. The study will also rely upon both primary and secondary data in order to thoroughly explore the topic in question. The mixture of both types of data will be appropriate for this dissertation in order to validate the opinions and information presented in the literature review and as the topic of sustainability as a success factor of project management is an evolving topic, it is also essential to get first-hand and recent information regarding its current importance in the business environment.

Data will initially be collected via the internet, journals, articles, magazines, and other databases in order to obtain relevant literature regarding the concept of sustainability. The literature will then be analyzed and duly criticized in order to determine popular opinion regarding the concept of sustainability and arriving at conclusions regarding the research questions mentioned via secondary data.

Primary data will then be collected via an industrial questionnaire dispersed to three project-based organizations regarding their opinions and practices of sustainability as a criterion for success in project management. The questionnaire will be dispersed to approximately 30 respondents working in the three respective organizations and this sample size has been chosen for researcher convenience, access, and appropriateness in attaining sufficient information.

The questionnaire will be quantitative in nature in order to avoid irrelevant responses and to limit the discussion towards the points made in the literature review. The results of the questionnaire would then be used to validate or conquer the findings in the literature review.

Data Analysis

The qualitative secondary data collected will be analyzed through content analysis in order to extract the most relevant and important points from the arguments presented in the literature review. The quantitative survey results will be analyzed through the use of the statistical software, SPSS.

The results of the quantitative survey will then be analyzed against the results of the literature review in order to arrive at appropriate conclusions for the research questions mentioned above. Recommendations will then be given accordingly for issues like knowledge transfer and eradicating the perception of sustainability as a fourth project management constraint.

Limitations/Ethical Risks

One of the limitations of this study is gaining access to 30 randomly selected individuals in three different project based companies. Permission must be obtained and the individuals must be randomly chosen in order to avoid biasness. Moreover, there may be issues of confidentiality or their unwillingness to respond to questions regarding their own personal sustainability practices and principles. There is also the risk of people answering dishonestly only to maintain their image or respondents not paying particular attention to the survey because of lack of interest or boredom.

The questionnaire may be prone to researcher bias and the data obtained in the literature review may be outdated and not applicable in all countries. Thus, appropriate care must be applied to ensure contemporary data is collected and data is relevant to the topic in question. One of the major ethical risks of this project is ensuring that confidentiality is maintained while conducting the survey of project-based companies and ensuring that no information is dispersed openly which may negatively affect their reputation.

Economics

Many choose living in micro-homes mainly due to economic issues. Nowadays, living in the city requires you high cost of living. As we all know, micro-living is the lower cost of living. Be it a recent college graduate, a victim of the mortgage crisis, or a retiree concerned about cost of living in old age. They will choose living in micro-homes rather than regular houses. On the commercial side, developers of micro housing apartment units clearly see an upside from adding more units in a given building footprint.

Simpler Living

There is a growing sense among many that busy and expensive lives are unsustainable at both an ecological and personal level. Many in the micro house movement come to it with a realization that happiness in their lives has never correlated with the size of the spaces they have inhabited.

Some search for a simplicity of existence, privacies for personal space, the elegant economy of form of a well design small structure and an added freedom when unshackled from unneeded rooms. Others believe that life is ‘too short to live big’- to spend more precious life energy than needed dedicated to the designing, building, financing, cleaning, furnishing, decorating, maintaining, and repairing, when we might better be loving, discovering, creating, traveling.

Affordability

The core idea for micro housing is its price tag. Living at the heart of the city affordably is only a dream to most people. Sky high prices and limited accommodation narrows down accommodation choices for many. They may choose to either commute from distant towns with cheaper rents or opt to share living spaces with a roommate or a relative. Micro housing gives the opportunity for those seeking the city lifestyle at a cost of limited spaces. Micro housing can be an attractive investment for investors with limited budgets. You can be sure that there will be a vast number of people looking for cheap accommodation.

Environmentally Friendly

The environmental footprint created per square foot is smaller than those high energy consuming buildings with few inhabitants within them due to its size and capacity. This is ideal for environmentally conscious young workers who embraces minimalism while living green in the heart of the city.

Utilizing the shared facilities with other residents, not many facilities will be required for maintenance and cost of management upkeep can be relatively low. Using green practices such as installing solar panels, rain water collection and reusing build materials procured elsewhere are some of the possible ways that highlights micro housing can be attractive.

Convenience

Having located deep in the city itself, amenities are everywhere to be found and any sort of goods or services are easily obtained. As KL was voted the 4th best city for expats in 2017, you can be confident in its diversity and offerings.

Community Oriented

Communal living offers the choice of balance between private and common space that are designed to encourage community interaction, something that is not commonly found in fast paced big city lifestyles.

Concerns

• The Weather

Light and height are two critical factors to micro-housing. In Malaysia, light is not much of a major concern due to its all year bright summer weather. This allows the installation of solar panels on top for self-sustainable energy while high ceilings would not be a requirement given the ample sunlight during the day.

However, one major concern is the heat emitted by the scorching sun at certain times of the year. In traditional homes, proper insulation is installed in the roofs and the flow of ventilation is carefully considered. With micro housing, more test need to be conducted to foresee its feasibility from a design perspective. It is very easy for a micro home to turn into a big oven ready to bake its poor inhabitants alive.

• Maintenance

Like regular houses, micro-home also needed to be maintained carefully and regularly to keep it in shape and free from hazardous things. This is especially important for micro housing which can quickly become a fire hazard if not keep in check since the micro-home is small in size and the fire can be spread quickly.

It is one issue to ensure inhabitants to pay their maintenance fees in time and another to keep the whole area in shape and welcoming. Micro housing will require proper planning and evaluation to keep the place in order before implementation can happen.

• Cleanliness

For micro housing to thrive and sustain for the foreseeable future in fulfilling its core purpose, there needs to be enforcement and cooperation from all parties. This includes a high standard for cleanliness and garbage disposal, including proper recycling procedures and systems.

The affordable prices and limited spaces tend to open up opportunities for antisocial attitudes and low responsibilities turning what could have been a healthy communal living into a derelict area filled with negative social behaviours from drug abuse to crime hotspots. As if KL needs anymore crime areas to mushroom up.

If you look closely at low cost flats in the surrounding areas, many of them are poorly maintained, garbage and waste are littered on common areas such as staircases and walkways. This leads to irresponsible and the attitude that shows in the recent case of the boy who was killed by a falling chair at a PPR flat. It is really up to the residents of communal housing to uphold the standards of living in such areas.

Introduction Definition of sustainability. Briefly mentions environmental, experiential, socio-cultural and economic sustainability in relation to ecotourism. Environmental sustainability Importance of environmental sustainability in managing ecotourism and examples of impacts Strategies for achieving sustainability and how they are applied Experiential sustainability Importance of experiential sustainability in managing ecotourism and examples of impacts Strategies for achieving sustainability and how they are applied Socio-cultural sustainability

Importance of socio-cultural sustainability in managing ecotourism and examples of impacts Strategies for achieving sustainability and how they are applied Economic sustainability Importance of economic sustainability in managing ecotourism and examples of impacts Strategies for achieving sustainability and how they are applied Conclusion Introduction Environmental sustainability Importance of environmental sustainability *Strategies* for achieving environmental sustainability

Accommodating for hundreds of visitors has disadvantages for a site if the wildlife or vegetation isn’t capable to withstand an increased level of exposure. That’s why hardening of a site allows that site’s carrying capacity to be increased e. g. pit toilets, board walks and but still limiting number to ensure minimal impact of that site. The Cradle Mountain-Lake St Clair National Park in Tasmania, Australia, have installed board walks along the track for the concerns of environmental degradation and overcrowding.

The boarded sections are established in sensitive areas in the national park with significant importance for an ecosystem. The softening of a site refers to soil replacement and replanting of native vegetation to rehabilitate the site as much as possible. There are many businesses that were built with very low levels of impact, because of the extensive research done before the construction of their building. The Couran Cove Resort in Queensland assessed the area for their resort before construction and removed the native vegetation, planning to replant them after the completion of facilities.

A number of environmental measures were put in place during the construction of the resort, such as installation of solar powered cabins, identification and mapping of significant trees, strategies to manage acid sulphate soils, and an integrated water management system. As a result of many of these management strategies, the resort has become an industry leader in environmentally sensitive technologies. Visitation quotas and fees are a clever strategy to maintain a high revenue flow for the protected area and continue appropriate management.

Zoning and site hardening influence visitation levels in specified areas, so these factors are considered when implementing fees and quotas. The overall number of visitors can be limited through the imposition of quotas and user fees; quotas are formal restrictions on visitor numbers and user fees (entry fees and other fees) increase the latter until visitor demand falls below the carrying capacity threshold. Mt Buffalo National Park in Victoria, Australia charges entry fees for visitors, whether camping or just visiting. These fees are put towards managing the park, including regular maintenance of provided facilities.

There are methods to restricting and allowing appropriate viewing or access of wildlife by providing information and education to tourists; informing users about the recreational resource and current level of use. Making the users more sensitive to the potential impacts their behaviours might have on the environment is an effective way to make them aware. Experiential sustainability Importance of experiential sustainability The experience of the tourist is important to be aware of to evaluate the sustainability in the way it is implemented.

People learn better when they are actively involved in the learning process and use as many senses as appropriate. Interpretation is effective way to educate tourists because it works with the visitors rather than against them. Such techniques include; visitor centres, education centres, displays and exhibits, self-guided trails and guided tours. These techniques are strategies to inform tourists of the natural environment to which they participate in, to help understand the importance of sustainably managing activities in a site. Strategies for achieving experiential sustainability

Socio-cultural sustainability Importance of socio-cultural sustainability Socio-cultural sustainability of ecotourism relates to the stability of social and cultural systems, including the wellbeing of local and indigenous communities. Their involvement is important for tourism to be successful and unique. It is a significant contribution to ecotourism’s global following. Socio-cultural and economic sustainability are linked together to also facilitate the wellbeing and satisfaction of visitors. Strategies for achieving socio-cultural sustainability

Economic sustainability Importance of economic sustainability Economic sustainability is associated with socio-cultural sustainability; relating to the stability of social and cultural systems, including the wellbeing of local communities. The impacts of economics in local communities include start-up expenses (acquisition of land, establishment of protected areas, superstructure, and infrastructure), ongoing expenses (maintenance of infrastructure, promotion, and wages), revenue uncertainties, and revenue leakage due to imports and non-local participation.

Examples of positive aspects of economics include direct employment, improvement of transportation and communication systems; negative aspects of economics include no local employment opportunities, and leakages may be high. Establishing a protected area requires lots of expenses to be able to maintain the environment sustainably. The development of buildings and infrastructure such as visitor centres and toilets require regular maintenance, which means there needs to be enough income to retain a standard quality.

Employing staff can be limited when money is scarce, maybe even overworking employees. For example, the Cape Otway Centre for Conservation Ecology in the Great Otway National Park is an ecotourism operation that was established in 2004. The owners of the Conservation Centre opened the business to become involved in conservation projects and research biodiversity conservation. When opening the operation, the owner’s budget was limited and was unable to employ enough staff to keep up with the daily routine activities; such as delivering service to guests and running of education programs.

Their only choice was to employ enough to manage the business and providing the services themselves. *Strategies for achieving economic *sustainability Economic sustainability relates to the income of an operation or protected area to maintain the natural environment or site. Such income can come from user fees (public’s willingness to pay), taxation (sales tax, accommodation tax) and donations (lack of resources or money for endangered species). Earth Sanctuaries is a company that operates a network of privately-owned sanctuaries, set up with the aim of conserving native wildlife species.

The company has eradicated exotic species from all of its properties, and has erected fencing that excludes feral animals from each sanctuary. To fund its conservation efforts, the company offers a mix of ecotourism products including accommodation, tours, and an environmental education program. These products are managed to provide the ongoing profit needed to run the sanctuaries, and to provide dividends to the company’s shareholders. Conclusion Sustainable tourism is important to be properly managed when utilising the natural environment.

The four components of sustainability are environmental, experiential, socio-cultural and economic sustainability, each is critical principle for achieving ecotourism. Each component is linked to another and one cannot function well without the others. Ecotourism is difficult to be completely sustainable for the natural environment, but can be managed to minimise low impact. This is done by the four components between each; they interact with one another’s resources to appropriate management the natural environment; linking together to facilitate the wellbeing of local communities. References

Sustainable Development for the Benefit of Human Welfare In recent years, with the development of society and economy, some of the non- renewable resources, such as coal, oil, natural gas, gradually consumed by human beings. Nearly since asses, people have realized the severity of the problem and the discussions about sustainable development have become the hit topic among public, and up till now, it is also a controversial problem.

According to the view of environmental and economic experts who do researches bout sustainable development in recent years, people introduce an ethical issue to the topic of sustainable development, that is whether sustainable development or not is closely related to the next generation. Such an ethical question leads people to deeply thinking. In my point of view, sustainable development is the right choice in the development of human history.

According to the natural rules of “law of the Jungle, the survival of he fittest”, human being hoping to survive generation after generation must insist on sustainable development. Sometimes sustainable development means that, for a time, there will be a part of the economic interests of some people may suffer from it. For example, to support the sustainable development, it requires us to reduce the exploitation t and utilization of natural resources, resulting in a reduction of production, thus lowering their interests.

However, from a long-term point of view, the current sustainable development will lay the foundation and save economic energy for the future development. We human beings should not be in pursuit of the short interest, but hold a worldwide horizon to look around the world and the future and leave development opportunities and material reserves with the next generation. In a word, sustainable development is the pace of the era of progress. It is for the benefit of and capable for the welfare of human being.

This article is mainly talking about an action research that aims to demonstrate the sustainable advantage brought by continuous improvement in the supply chain by analyzing the characteristics of CI programme of two Spanish companies in the food industry. Basic concepts Continuous improvement (CI) – the planned, organized and systematic process of ongoing, incremental and company-wide change of existing practices aimed at improving company performance.

Personnel Participation Systems (PPS) – one practice that aims to implement CI on the shop floor by involving workers into practice in CI activities. COIMPROVE Project (Collaborative Improvement Tool for the Extended Manufacturing Enterprise) – a three-year EU funded research project that aims to develop a tool supporting the implementation and operation of collaborative improvement within the Extended Manufacturing Enterprise (EME).

Concerns of the study Many former references are dealing with implementation of CI in a company, with improvement teams or other PPS. Few references are dealing with CI practices between companies, such as joint problem solving between customer and suppliers, joint management of logistic systems between enterprises, etc. Guided by the COIMPROVE Project, this research is going to explore factors that affect the development of CoI (Collaborative Improvement) within an inter-organizational setting.

Research participants and methodology As the basic organizational structure of the improvement process, two teams (the implementation team and the improvement team) are created. The main responsibility of the implementation team is planning the process and monitoring the achievement of the goals being sought; while the improvement team is responsible for proposing and analyzing problems and implementing improvements that contribute to achieving the desired goal (Jose, 2009).

Both two teams include people from management level, the area/section workers, internal customers of that area/section, suppliers in that area and researchers from research group. The two companies being researched are Bajamar Septima and Agrovic Noroeste. Bajamar Septima, a food company, is specializing in the production and sale of pizzas, pizza bases and dough-based products and has about 100 employees. The other company, Agrovic Noroeste, is devoted to the production of poultry products and also has about 100 employees.

Specifically, for Bajamar Septima, which has had more than 10 years’ experience in CI programs with its own PPS, a pilot experience was initiated in the field of cleaning. The improvement team is taking personnel from three companies: four people from Bajamar Septima, two from ISS Unica (a leading supplier of general cleaning services in Spain), and one from Johnson Diversey (a cleaning and hygiene solutions provider).

By collaborating with these suppliers, Bajamar makes decisions and takes measures in rationalizing the cleaning activities and optimizing both internal and external resources. As for Agrovic Noroeste, which has little experience in CI programs besides a suggestions system in the slaughterhouse, a new improvement project that aims to reduce the problems with quality was set off. The improvement team is comprised of workers, operators and supervisors from Agronic, a transport company (transporting animals to the slaughterhouse) and a loading company (catching chickens). All the participating personnel are given training and they will have meetings involving brainstorming measures to gain improvements in the handling or in the systems and facilities, which may result in less second quality chicken.

Results and discussion

Both of the two actions have demonstrated efficiency. Bajamar Septima has 15% reduction in time spent on cleaning, both in the production and in the maintenance sections. For Agrovic, a reduced number of forklift operators and a cut in operating time are resulted due to the application of a new fowl loading method. Besides these, there are also many other achievements in improving the two companies’ productivity and competitiveness.

These two cases emphasize the importance of involving not only company personnel but also their suppliers and customers in the CI process and the quantifiable results have testified this statement. By extending CI throughout the entire supply chain as well as maintaining a concept of collaborative improvement, the company may find out more efficient ways to improve quality, service and product costs, and finally improve competitiveness. Finally, as the article mentions, working at inter-company level is more complicated than doing so internally. The author of the article calls on more studies on exploring CI knowledge and discovering a series of organizational factors that might influence it.

The Government of Gujarat had declared 2005 the Year of Urban Development’ (Sharers Visas Versa). During this particular year, the urban development department undertook various initiatives to resolve urban issues such as traffic management, and the introduction and enhancement of a city transport system.

The Gujarat Infrastructure Development Board (GUID), MAC and Metadata Urban Development Authority (DADA) Jointly drafted a comprehensive urban mobility plan keeping in mind the needs of Metadata as a mega city, and included in it, the implementation of the Bus Rapid Transit System (BRATS) and the planning of the regional rail and metro for future years. KEPT University was assigned the work of the preparing of a Detailed Project Report (EDP) for the implementation of the BRATS project in Metadata.

Meanwhile, the government of India announced the Charlatan Nehru National Urban Renewal Mission UNARM) for urban development and the MAC submitted its proposal to the government of India for the BRATS project, which was the first of its kind in the country. As approved by the ministry of Urban Transport Initiatives in India: Best Practices in APP National Institute of Urban Affairs urban development, the MAC is now implementing the BRATS project in a phased manner.

The BRATS project was approved in November 2006 and work on the project commenced in 2007. The urban mobility plan provides choices to the people in the case of their mobility, in terms of different modes such as the MATS, BRATS and the suburban rail or metro, all of which complement each other. 2. 3. 2 Goals of the Project The trans-vision of Metadata captioned as ‘Accessible Metadata’ is to redesign he city structure and transport systems towards greater accessibility, efficient mobility and lower carbon future’.

Main objective of project is to: Reducing need for travel; Reducing the length of travel; and Reducing automobile dependence. 2. 3. 3 Strategy Used to Achieve the Desired Goals Metadata transport strategy is focused on moving people and not on vehicles. The Urban Mobility strategy is based on the understanding that all people should be able to move around in Metadata with comfort and efficiency. They must feel safe and secure. Travel must be Urban Transport Initiatives in India: Best Practices in APP 25 affordable.

They must have choices for their mobility in terms of walking, bicycling, rickshaw, bus, BRB or any other form of transport depending on where they are going. To emphasize this, the system has been named as January, meaning peoples way. 2. B status AT ten Project The system has been in operation for the past one year and carries about 90,000 passengers daily with deployment of 45 diesel buses (30 AC buses out of 45, 12 meter long, mm floor height), with commercial speeds greater than 24 SMS per hour.

The Role of Multinational Enterprises in Developing Countries According to the Oxford Dictionary, a developing country is “a poor agricultural country that is seeking to become more advanced economically and socially” (Oxford Dictionaries Online). Multinational Enterprises (MNEs) enable developing countries to achieve these objectives in several different ways. For instance, they introduce foreign products, inject money in the economy, and serve as a learning engine in the communities where they are located. In this essay, I will discuss the positive impact that MNEs have on developing countries through human resource development. MNEs support developing countries’ social and economic goals through the improvement of human capital by providing enormous numbers of employment opportunities, useful skills and training for their workers, and a business culture that is aligned with global standards MNEs bring hundreds of thousands of employment opportunities to their host countries.

This contributes to a higher standard of living for individuals and to improvements in local economies. The unemployment rates in developing countries are generally very high. In 2011, Nigeria, Liberia, Haiti, and several other developing countries, had unemployment rates that were well above 20% (CIA – The World Factbook). MNEs reduce the income gap between first and third world countries by generating direct and indirect employment opportunities. For example, the International Labour Organization (ILO) found that, in 1976, approximately 2 million people were directly employed by MNEs in developing countries (Kumar, 1980, p. 6). One successful MNE that has made significant contributions to the economies of countries in the developing world is Volkswagen. Volkswagen supplies thousands of direct job opportunities to inhabitants of emerging countries. In their supply strategy, they explicitly state, “We are convinced that international work sharing, combined with free access to markets, supports growth and wealth in … developing countries. Responsible globalisation with the challenge of securing the environment-related and social-oriented services in an increasingly global setting, as well as further developing them with innovative and flexible solutions and projects, represents a contribution to sustainability across the world” (Volkswagen Konzern Startseite). Volkswagen has proceeded to establish an extensive production network that includes facilities in countries such as Brazil, South Africa, India, China and Mexico.

In the city of Puebla, Mexico alone, a Volkswagen production facility employs 13,937 workers (Volkswagen Konzern Startseite). Some indirect opportunities associated with the presence of MNEs include increased business for local vendors, and demand for raw material production. One argument against MNEs is that host countries often become dependent on them. For example, an association comprised of six European firms was responsible for 66% of Nigeria’s exports and 70% of its imports (Chukwuemeka, 2011). Kumar (1980) stated that, “people have been socialized to look at outsiders for guidance and support.” It is true that developing countries rely on local MNEs to an extent. However, this reliance only occurs initially, as a result of a lack of wealth in their countries. Once host countries utilize the benefits provided by MNEs to improve their economies and become self-sufficient, they no longer rely exclusively on MNEs for sustainability. Furthermore, the dependence is double-sided. MNEs rely on developing countries for the local labour that they supply. Hence, a relationship between an MNE and its host country is mutually beneficial

MNEs also enhance the human resources of developing countries by supplying their employees with useful skills and training that are often unavailable in local firms. Skills, training and experience contribute to the personal development of individuals and, therefore, lead to long term economic growth and superior business conduct. Many domestic organizations in developing countries underinvest in proper training programs. According to the World Business Environment Survey (WBES), results from several surveys conducted in 2002 and 2003 indicated that the number of trained employees within local enterprises ranged widely, from 30% to 75% (Miyamoto, 2003, p. 29). The lack of training initiatives inherently make domestic companies less competitive, as training is a significant source of skilled employees. In contrast to the domestic companies, MNEs are more likely to implement training programs, as they do not face significant credit constraints, they have access to global information on efficient business conduct, and they are interested in low turnover rates (Miyamoto, 2003, p. 31). MNEs recognize the need for skilled employees, and therefore see training initiatives as an investment for long term growth (Kumar, 1980, p. 30).

The resources that are available to MNEs allow them to employ this strategy and make significant differences in the lives of many individuals in third-world countries. For example, Shell Oil has participated in countless initiatives in oil producing districts of Nigeria to provide an education for potential employees. Eweje (2006) claimed that, “the company states that it actually provides 480 university scholarships for students from oil producing areas every year…” One study was performed by Zheng (2007) to quantify the investments made by MNEs for training initiatives in developing Asian countries, such as Indonesia, Malaysia, Singapore, and Thailand. The study found that MNEs have indeed invested significant funds in these programs. For example, the mean dollar investment for American firms was $419,855 per firm (Zheng, 2007, p. 481). These initiatives enable individuals in third-world countries to establish themselves professionally and become more valuable contributors to society. It is common for new local entrepreneurs to enter the market as a result of their newly developed skills.

Finally, MNEs develop human capital in emerging countries by introducing a business culture that is consistent with global ethical standards. Although their facilities are located elsewhere, MNEs are heavily scrutinized and held accountable in the first-world. For example, in the 1990s, Nike suffered extreme negative publicity, as it was employing children and providing poor working conditions for workers in developing countries such as Cambodia (Locke, 2006). Nike’s sales dropped significantly as a result, and they were forced to issue strict regulatory laws concerning ethical conduct in their sweatshops (Stanford University – The Nike Controversy). This demonstrates how MNEs face a higher probability of detection and a higher penalty for negative publicity from immoral behaviour (Harrison, 2004). As a result, MNEs often provide higher quality working conditions and promote ethical practices in business. Companies, such as McDonalds, have official documents that articulate global standards for business conduct in their facilities. These standards include ethical guidelines, rules for corporate social responsibility, and safety standards.

The languages of these documents differ according to geographic location, but the material in each one is identical. Thus, the same ethical policies are held as a standard in highly industrialized countries, like France, and emerging countries, like Malaysia (McDonald’s – Official Global Corporate Website McDonald’s). Another example of an MNE that employs global standards is Coca-Cola. Coca-Cola has a Workplace Rights Implementation Guide that provides a checklist for their global suppliers to ensure that no violation of human rights occurs, such as discrimination, abuse of labour, and child labour (The Coca-Cola Company). Such ethical practices enable individuals in developing countries to enjoy safer working conditions and have a better understanding of globally accepted business standards, which can be helpful in their own business initiatives. In addition to the ethical standards that MNEs enforce, they also teach their employees global expectations for conducting oneself in a business setting, such as how to dress, how to negotiate, and how to handle customers and suppliers.

All of the aforementioned developments are critical for individuals to establish themselves in the business world. They also encourage higher standards of conduct among local businesses. Critics argue that the establishment of a business culture imposes industrialized practices and destroys authentic culture in developing nations. For instance, Ghertman (1984) wrote that, “they brutally impose a Western-style culture on rich as well as poor consumers and so destroy the old way of life and the national identity of these countries.” Although this is a valid concern, this argument can be refuted with the definition of a “developing nation”. Since a developing nation seeks to become more economically advanced, it would be unjust to deny them the opportunity to industrialize and become part of the global economy. Furthermore, the world is becoming increasingly globalized. It is inefficient for a country that is interested in advancing itself economically to remain isolated. In fact, in order to succeed economically, a country must adopt technology and productive techniques from other countries and learn to respond to changing economic and social circumstances.

In conclusion, despite the heavy scrutiny and occasional mishaps that occur, the overall impact of MNEs on developing countries is extremely positive. Among the most important contributions is the development of domestic human resources. This is done through direct and indirect employment, training initiatives, and the establishment of global business standards. Bracken (2004) stated, “Today, the multinational corporation is the most vital institution of economic development, social change, technology, and let’s face it, dynamism and new ideas.” Hopefully developing countries will continue to utilize the resources provided by MNEs, and become more active and competitive players in the global market.