This report presents researched findings and appropriate recommendations of business activities of Multinational Companies (MNCs) in third world countries. Based on the case of Cardinal Health Inc., this report attempts to address issues of shared profits and philanthropic activities of MNCs against government interventions prevalent through corruption and civil unrest in the developing world. In the final analysis, the research intends to propose certain solutions that steer Cardinal Health Inc. to go global with operations in these developing countries, as well as the rest of the world. Cardinal Health Inc. is a pharmaceutical company that is mainly involved in the distribution of medical products through value addition as its core business. This is how it meets the needs of its customers as efficiently as its management requires.
Objective observations of Cardinal Health’s scale of operations in the pharmaceutical industry against the international trade of medical products reveal salient issues concerning MNCs that are critical to discussion and analysis, particularly for the success of business in the developing world. The findings vary in numerous aspects as outlined below:
- Cardinal Health Inc. contributes to philanthropic activities within various nations in the world. Its global donations to local and international charity organizations since the launch of its foundation have exceeded $100 million. These forms of support focus on programs aimed at providing basic healthcare, individuals’ well-being, and Corporate Social Responsibility networks that promote the relevance of its employees (Cardinal Health Foundation, 2008, para. 2).
- The company works only in liaison with approved humanitarian relief organizations carefully selected to meet specific criteria of operations similar to the one it has. The organizations include IRS-approved charities that have a proven record of accountability and management of their legal and financial liabilities (Cardinal Health Foundation, 2008, para. 4).
- The company supports its employees and partners in their efforts to alleviate the conditions of people adversely affected by disasters. Cardinal Health employees are encouraged to contribute to key relief aid organizations and Cardinal Health will donate a 50% match (Repertoire, 2010, para 7).
- The company has a team of dedicated workers who go beyond the call of duty during emergencies. This group is comprised of the company’s partners and regular workers. They devote extra effort and time to the company’s services that promptly meet the needs of patients in their respective locations (Cohen, Govindaraj, Reich, 2000, p. 4).
The study of shared profits and a myriad of government factors that influence MNC’s operations in developing countries to lead to some important conclusions. First, the success of any international pharmaceutical company in third world nations depends on the company’s choice of a specific underdeveloped nation and the level of product differentiation in the third world market (all nations that make up the third world).
A company like Cardinal Health Inc. that deals in many drugs may easily be successful through venturing into specific countries like Kenya or Ghana. Such countries, which serve as regional administration centers for their trading blocks, allow Cardinal Health to dominate and expand in the wider third world. Its entry into these markets will put it into a better position to expand to other neighboring regions due to the good geographical conditions and locations and good infrastructure in the two countries. Thus an expansion to Kenya and Ghana will be a very strategic move for Cardinal Health as it will enable it to expand to other regions in western and eastern Africa.
The following propositions indicate a high likelihood for strategic positioning of Cardinal Health Inc. as a catalyst for international profile and mega-operations that meets global demands:
- In the face of corruption, Cardinal Health has the leeway to use its partners while distributing donations to its target groups and individuals otherwise deemed as needy by its observers. This way, Cardinal Health Inc. establishes a lasting rapport with its target clients in the developing world because it deals with hospitals and pharmacies, providing the necessary pharmaceutical and medical supplies.
- The effect of strong federal laws and regulations on the business restricts its affiliations to organizations worthy of its approval. Hence, Cardinal Health needs to pursue alliances with leading pharmacies in the world through its charitable organizations. The alliance should further strategize through social networks affiliated with corporate organizations, thereby reducing its advertisement costs. Moreover, this step predisposes the company’s product to be appealing to a wider class of people as the company serves distinct market segments.
- In attempts to establish significant markets in war-torn areas and regions susceptible to civil unrest because of unstable governments, the company should broker peace negotiations through aid campaigns by its strategic partners such as AmeriCares, Map International, and Oxfam. This way, it may scale down the volatility of civil wars in the third world, especially in Africa and Latin America. Ultimately, this policy may offer the best chance to serve and sell in the third world.
Cardinal Health Foundation (2008). Supporting humanitarian relief. Web.
Cohen, J., Govindaraj, R. & Reich, M. (2000). HNP DISCUSSION PAPER, World Bank Pharmaceuticals. Washington, DC: The international Bank for Reconstruction and Development/World Bank. Web.
Repertoire (2010). Time of need. 18(3). Article number 3397. Web.