The folllowing sample essay on Multinational Companies In Jamaica discusses it in detail, offering basic facts and pros and cons associated with it. To read the essay’s introduction, body and conclusion, scroll down.
Multinational companies in Jamaica
Multinational companies in Jamaica
Multinational companies have been highly significant to the growth of the Jamaican economy. The exponential growth of these companies has been felt not only in Jamaica and the Caribbean but also in continents such as Europe and North America where they have solid footholds in the respective countries consumer markets.
Grace Kennedy and Lasco Jamaica are among the most successful companies in the Caribbean and more so in Jamaica. Multinational companies have a wide range of products that help diversify their portfolios.
Grace Kennedy Company was founded in 1922 as a partnership between Dr. John J. Grace and Fred Kennedy. The Company started out as a small trading company and soon grew to have a wharfing facility to enable smooth flow of the company’s imports (Grace Kennedy, 4).
The company in the Caribbean operates in Jamaica, Trinidad Barbados and the Eastern Caribbean respectively. Currently the company has sixty subsidiaries and affiliated companies across several continents around the world. The company has grown significantly since its inception form a privately owned company to a public company with a market capitalization of J$21 billion as of the year 2006. The company has a blueprint of catapulting its growth to become a leading global company with branches all over the world.
The company has its activities in financial services, remittances services, insurance, manufacturing and retail and distribution.
Employment-The Company has been particularly significant in the provision of employment to the Jamaican population. Since it began its operations, it has seen growth in its levels of operating activities and has diversified into different products and activities for the maximization of profits. The growth of the company means that the company has seen an increase in its revenues, which means that there have been more employments to facilitate the higher levels of activities. Employment for any population and country in general has many benefits. In addition, more employment means that the new employees are able to meet their basic needs such as costs for food. Adequate food for a family means the members are able to concentrate on crucial issues such as education. This also alleviates diseases, which are brought about by malnutrition that is because of poor diet or inadequate food.
Employment means that people who are unemployed and venture into the new employment bracket are able to cater for their own needs such as education for their children and other basic needs.
Revenue for the government-Moreover, new employees also translate to more revenue in the form of taxes for the government. More taxes enable the government to be able to fund more developmental projects such as the provision of basic needs such as water and sewerage systems. New employment helps in the reduction of crime as people who do not have any employment are able to find alternative and better sources of income.
Public Ownership-The Company, after its evolution into a public entity, enabled Jamaican citizens to get a chance to own a part of the largest corporations in the country. The new public company after its listing as a public company was able to get more revenue to improve and increase its operations. This also meant that the company would employ more people to facilitate more production and maintain its growth. After the formation of the company in 1922, the company was particularly vital in the provision of basic services to the Jamaican public. This was extremely difficult to find if not impossible, in a period marked by racial oppression such as financial services and insurance services. This enabled the Jamaican entity to be represented in the corporate world by a multinational company, which has several operations in different countries and continents.
Grace Kennedy Company has also enabled the Jamaican population to have more products available to them at relatively fair prices. The provision of basic commodities such as packed foods enabled people all financial backgrounds at relatively average prices. This has opened up the market to innovation and competition posed by the different players in the market.
Focus on imports-Grace Kennedy has been solely involved in the import of products instead of diversification into the manufacture of products (Grace Kennedy, 11). Manufacture of products in Jamaica would be particularly relevant to the economy by the provision of new jobs and would prove to be cost friendly to the cost reduction of the company. The company should focus on the provision of products that are solely made in Jamaica or the Caribbean.
Provision of unhealthy foods-this has contributed to the now persistent health issues affecting obese people due to high intake of fatty foods. Grace Kennedy has aided the distribution of foods that are considered unhealthy.
Decline in currency value-Imports drain the country’s foreign reserves, which are used to purchase the imports. This makes it hard for the country to be able to maintain a strong currency.
Lasco Jamaica has also been another company that has been in operation in the Jamaican economy since 1988 (Lasco Jamaica, 3). It has been involved in the provision of food, financial, personal care, household and pharmaceutical services and products.
Access to quality goods-Lasco Jamaica has been facilitating distribution of foreign products by employing aggressive marketing strategies. This has enabled the Jamaican public to be able to access high quality imports at relatively average prices
Opening up of the market to healthy competition-Lasco Jamaica has also contributed to the opening up of the Jamaican market to competition posed by foreign products and enabled the local market to conform to high standards in the production of any goods (Lasco Jamaica, 15). This is evident by the presence of locally manufactured goods that are of high standards and are appealing to the consumer.
Source of revenue for the government – the imports are usually taxed heavily on entry into any country. This ahs been a significant source of revenue for the government enabling it to fund projects
Focus on imports-The Company was involved in the importation of foreign products. This has had a negative impact on the Jamaican economy. Importation means that the company was denying local companies the much-needed revenues.
Lack of employment due to imports– Lack of adequate revenues means that the local companies cannot employ more employees or even increase production
Preference of foreign goods over local goods-The Company has not been a favorable force to the market due to its preference for imports such that it opposed the revival of Jamaican owned entity that would see the Jamaican government operate a dairy company. This would be favorable for the economy, as a whole. It would translate to more jobs in the economy and a reduction in the unemployment rates. This would also mean that the government would collect more revenue in the form of taxes and licenses from new products. In addition, the Lasco Jamaica Company has been providing the Jamaican population with fatty foods, which are considered unhealthy due to the presence of hydrated fats. The presence of such fats translates to people becoming unhealthy due to increase in weight. This leads to medical conditions such as obesity, bloods pressure and other heart related problems brought about by high cholesterol foods.
Foreign affiliate-The Company seems to act as an affiliate of larger companies (Lasco Jamaica, 13). This denies the Jamaican populace the chance to work at companies, and denies the populace the chance to buy products that are made by Jamaican companies. The company should authorize the issue of shares and enable people to purchase their shares. This would enable the Jamaican population to have more ownership in entities that have been in existence for a long time and at the same time get money to invest in the farming activities.
Grace Kennedy Company should have more responsibilities in the social scene because it has more market capitalization and resources at its disposal. This would be sufficient because the company owes its current existence to the Jamaican society. As a multinational company with the most number of subsidiaries and affiliate companies, they would be able to support such a perspective at the same time the company would be able to use the funds obtained in the acquisition of more equipment and invest in the local production of identical goods to ward off competition from the international products. The company should be the largest due to the high consumption rates of their products, which means that they earn more from the public thus they should give back to the public. Part of the revenue should go back to the society as it is because mast of it was derived from Jamaica.
Grace Kennedy. (2012). About us, 7.Retrieved from http://www.gracekennedy.com/home
Lasco Jamaica. (2012). Home, 16. Retrieved from http://www.lascodistributors.com/Home.asp