One employed by companies which were attracted to Ireland

One must take note that a multinational
business is not one which just sells goods in more than one country. To be called
a multinational, a business must produce goods or services in more than one
country. In other words, there is more to multinational companies than one
thinks they know. There is a difference between Multinationals and global
corporations. The multinational corporation operates in a number of countries
and adjusts its products and practices in each at high relative costs (when the
price of a commodity as it compares to another is high). Meanwhile, the global
corporation operates with settled constancy at low relative cost as if the
entire world is one entity; it sells the same things in the same way
everywhere. According to the (International Labour Organisation) ILO report “The essential nature of the multinational enterprises
lies in the fact that its managerial headquarters are located in one country,
while the enterprise carries out operations in a number of other
countries”. Looking at the impact of multinational companies on their host
countries, especially in Ireland, there are obvious advantages and
disadvantages in terms of impact on employment, small businesses and culture.

Ireland
is known as one of the most open economies in the European Union (UN), and this
for sure is true. IBM in 2010 ranked Ireland as first in the world in terms of
job creation by foreign investment relative to their population (Walsh, 2010).  Over 13,000 multinational jobs were created
in Ireland in 2011. Twitter, PayPal, Intel, IBM, Coca-Cola, and Pfizer were
among the major companies which made powerful investments that year. Also, almost
146, 000 people are employed by companies which were attracted to Ireland using
the IDA (Industrial Development Authority). Governments are also said to
improve employment in this case, whereby Subsidiaries are responsible for
aiding about half of the manufacturing employment (Berry
& McDermott, 2001).Back to the more recent analysis on the
employment sector in Ireland, latest IDA numbers show employment in the
multinational sector rose to 187,000 in 2015. This is as a result of IDA-backed
firms creating just under 19,000 jobs in 2015, therefore bringing total
employment sector to 187,000, which is the highest level in the IDA’s 67-year
history. An estimate was made, stating that for every 10 jobs created by FDI, a
further 7 indirect jobs are generated in the wider economy. This means about
318, 000 jobs or one in five private-sector jobs are supported by Iris-based
multinationals. As a result, by 2020 the IDA’s latest strategy targets the
creation of 80,000 new jobs. For instance, Apple made a heavy investment of
€850 million in a new data center in Athenry, Co Galway. Facebook also made a huge investment of
€200 million in a new data center in Clonee, Co Meath. This drastically boosts
the economy of Ireland. According to Richard Bruton, the minister for education
and skills, “Multinationals have played a massive role in the state’s economic
recovery”. (Burke-Kennedy,
2016)

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Multinationals
are said to have dominated the market for different products in Ireland, and
this makes it very difficult for local firms to be able to thrive. For example,
supermarkets in Ireland are squeezing the margins of local corner shops, therefore
leading to less diversity. The reason behind this is that due to the
multinational companies’ size and scale of operations, they are enabled to
benefit from economies of scale, enabling lower average costs and price for
consumers. Economies of scale are generally known as those factors that can
help a business reduce their average cost of production as it increases.
Examples of this are purchasing, marketing, managerial and technical economies.
In developing economies like Nigeria, big multinationals can use their
economies of scale to push local firms out of business, but for a developed
economy like Ireland, this may not always be the case as a firm  like ‘Penneys’, an Irish owned clothing
company, has its customers fully interested and cannot be pushed out of the
market.. According to the Central Statistics Office (CSO), the Irish gross
domestic product (GDP) grew by an enormous 26.3 percent in 2015 rather than the
7.8 percent that was previously estimated in March. Another problem small firms
in Ireland face relating to multinational businesses is the fact that
multinationals can change standards for doing business, therefore putting local
firms in the position of having to upgrade so that they can rise up to the new
standards. In many situations, small businesses are not able to survive because
of competition between these multinationals they are coming up against. This
can be as a result of multinationals offering high volume deals and discounts
that small businesses cannot match.

The
Irish culture is very diverse and is said to be unique, from their customs to
traditions, language, music, art, literature, folklore, cuisine and finally
sports. But in terms of business, multinationals have influenced some parts of
Irish culture. For instance, fashion chains are impacting the way one dresses,
meaning multinational clothing shops like Forever 21, Zara, H&M and other
popular shops influence the way the Irish dress. Also, industries like Google,
Facebook, and Apple, have boosted the usage of technology in Ireland, along
with other technological industries, meaning that technological advancement is
embedded in national cultures. The common environment (Ireland), shared norms
and cultural systems enhance interactive learning and innovation- especially in
workplaces with cultural diversity (Cantwell
& Molero, 2003)In the book, Culture of information
Economy-Influences and impacts on the Republic of Ireland,the author stated that coping
with different cultures can be made easier by focusing on the common point. She
gave an example stating how the Irish workers responded very favorably to the
open, nonhierarchical management style of the American firms, and they saw this
style as more similar to Celtic-Irish culture than those essentially British
modes of thought, feeling and behavior that they experienced in Irish firms.
There was a contrast in that same statement about the Irish workers. She said,
“This perception, however, may not always sit well with the indigenous
people, as was the case in Ireland (Trauth, 2001)”. This was
because the viewpoint that was held by the Irish workers and managers was that
while multinationals were bringing certain welcomed norms and values to the
workplace, there should also be a significant influence of Irish culture on the
multinational sector or industry, combining both international and Irish attitudes
during business.

In
conclusion, from the information gathered based on the impacts of multinational
companies on employment, small firms and culture in Ireland, it can be said
that multinationals have a huge role in the economy of Ireland as well as the
welfare of the people living there. However, not all parts are impacted positively
by multinationals. Small firms still have to struggle to survive in the market
as these multinationals enjoy economies of scale. The Irish economy has
improved over time due to the foreign investments made by world multinationals
like Apple and Facebook, making room for development and employment
opportunities all at once. The diversity of culture does not seem to alter the
performance of most multinationals in Ireland, as in fact, they expose Irish
workers to new values and attitudes for work, improving their level of
diversity. Therefore we can say multinationals have a large role in the
development of Ireland.i

i Reference

Berry, M., & McDermott, M. (2001). Multinationals
in a New Era. Palgrave Macmillan.

Burke-Kennedy, E.
(2016, January 6). One-in-five now employed by foreign multinationals. Retrieved
October 16, 2017, from Irish Times:
https://www.irishtimes.com/business/economy/one-in-five-now-employed-by-foreign-multinationals-1.2486929

Cantwell, J., &
Molero, J. (2003). Multinational Enterprises, Innovative Strategies and
Systems of Innovation. Cheltenham: Edward Elgar Publishing Limited.

McDermott, M. B. Multinationals
in a New Era.

Office, C. S. (2014). Multinational:
The Irish Perspective. Retrieved October 28, 2017, from CSO:
http://www.cso.ie/en/releasesandpublications/ep/p-bii/bii2015/mns/

Trauth, E. (2001). The
Culture of an Information Economy: Influences and Impacts in the Republic of
Ireland. Massachusetts: Springer Science & Business Media.

Walsh, K. (2010). The
Economic and Fiscal Contribution of US Investment in Ireland. Journal of the
Statistical and Social Inquiry Society of Ireland .

 

 

 

 

 

 

 

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