Abstract:
This paper discusses the difficulties which multi nationals face when their activities generate
changes in social relationships and resource flows within their host country. Multi nationals
are a form of business organisation that is well adapted to a world with few barriers to
resource and money flows. But business focuses on a very narrow part of economic activity
such as resource extraction, manufacturing or marketing. These activities often give rise to
economic, societal and attitudinal changes in the host population that may contribute to social
instability. This paper describes three case studies which illustrate some of the unanticipated
problems which may occur. The case studies are the Bougainville copper mine, Nike use of
outsourcing and Manulife in Indonesia. The cases illustrate that multinationals are often ill
equipped to appreciate or respond to the economic and social tensions which they create and
few managers are trained to understand or interpret the wider implications of social change
which they may generate. The key problem areas for business are identified and the
implications for international business curricula discussed.
