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Globalisation of Capital, MultinationalCorporations and Labour

Towards a PerspectiveV Janardhan

In the pursuit of strategies of accumulation and profitability global capital is pushing through an increasingly

'borderless world' and emerging as the dominant global social-economic-cultural power. The other side of the

coin is the emergence of a global working class(es) working directly or indirectly for global capital. This article

examines the manner in which companies, especially in Asia, are globalising and the strategies they tend to follow.

Strategies adopted by a leading multinational, British American Tobacco, and its Indian affiliate, itself aspiring

to become a multinational, are examined as illustrative of a generalising phenomenon.

WE are living in the tumultuous times ofglobalisation of capital. Not withstandingthe fierce debates that rage in intellectual-

political circ les regarding the pros and cons,good and bad, desirable and undesirabletendency that is globalisation of capi tal one point is clear: global isation of capital isindeed taking place the world over. Whileit is not too difficult to discover the motivesthat govern the right-wing forces in theirdenunciations of global(ising) capital, it isinteresting to note that the Indian left too,

by and large, is engaged in opposing theglobalisation ofcapital ,The 'hiddenagenda 'seems to be to prop up an 'Indian' capitali smas opposed to international/multinational/global capitalism. As if Indian capitalismcan be any different in either being benign

or more efficient. It is one thing to be anti-capital. and another to be opposed to oneform that the accumulation and organisationof capital can take and has taken -multinationalisation. Moreover, it is a matterof grave doubt how being anti-capital byitself can mean that the particular stance is'Marxi st'. True, the Marxist project or morespecifically Marx's project, aims at thetranscendence of capital. The dominant left

perspect ive however (and very much so inIndia) is to attempt a transcendence even

before the phenomenon to be transcendedhas materialised fully, a process that has totake place on a global scale, when capital

becomes the predominant , globa l social andeconomic power.

It can be contended that globalisation ofcapital sets the proper context and providesor lays the basis for a truly internationalworkers' movement. The latter may or maynot have an explicitsocialist agenda but atleast can provide a platform for the leftwhich itself has to become truly international-poli tica lly, sociall y,culturally. Yet, the leftwhich has by far become mostly re-active(as opposed to proactive) can only think in

terms of and at the level of the 'nation' andthe 'state'. These are precisely the twocategories and entities whose demise appear

imminent or at least rendered increasinglyirrelevant thanks to the current process ofglobalisation. As would be substantiatedsubsequently, in the pursuit of strategies ofaccumulation and profitability, global capitalis push ing throug h an inc reas ing ly'borderless world'. It is only today that capital

by cri ss -c ros si ng na t ions an d st at essubjugating them in effective ways, is in a

posi ti on to esta bl ish its supr an at io na lcharacter and emerge as the dominant globalsocial-economie-eultural power.' The otherside of the coin: creation of a global workingclass(es) working directly or indirectly forglobal capital. As James O'Conn or observes"Not until the working class was recomposedinto modem global, sociat labour could it

be said therefore that the working class as

such existed" [O'Connor 1984].The purpose here is to first describe the

manner in which companies are globalisingand the strategies they tend to follow; second,as a concrete example, to discuss at lengththe strategies adopted by a leadingmultinational company British AmericanTobacco (BAT) as well as that of its Indianaffiliate, 1TC. The cascof B AT-ITC is uniquein the sense that BAT is not only an overseasmultinational whose affiliate ITC is, but thatthe latter itself is also ambitious of becominga multinational in its own right, competingand co-operating by turns with its parent.This phenomenon has greater chances of being repl icated by many other companies precisely due to the forces and factors thatglobalisation unleashes. This only makes ahomogenous simplistic understanding ofmultinationals irrelevant thus showing howcomplex things are in reality.' Of course,BAT is but one example and others indeedabound in the world economy, like ABB,Siemens, General Electric, Ford or GeneralMotors. While their business objectives aresimilar, their strategies may vary. And thirdly,the present article attempts to offer for debate

ripostes to (global) capital, largelysummarising the thinking that is current insome international workers unions

themselves in a developing stage. For, it isthe workers first and last who actuallyexperience capital.

MNCs, E A S T A N D W E S T

The engines that are driving theglobalisation process are the multinationalcorporat ions. The MNC is the most advancedform of the organisation of capital today.This is in keeping with the very logic ofcapital itself. Any individual unit/organisation of capital has the power withinit to grow, expand and become a multinationalcapital. The history of any MNC bears thisout. The history of the MNCs also bears outthe fact that an MNC can originate in anynation. However in the discourse onmultinational capital, it is always assumed

that an MNC is a western animal. Howeverthis is far from correct, and among the mostdynamic multinational companies presenttoday the Asian multinationals also havetheir pride of place. Moreover, the latter's

pre sence can be witnessed in the mostadvanced sectors of global production.

Another implicit assumption as regardsthe MNCs is that capital flows from westto east. However the reverse is also true. Togive a few examples, Hyundai, the Koreanmultinational is setting up a one billion poundsemi-conductor plant in Scotland (The

Economic Times (ET) October 10, 1996).The second phase of investment is understoodto bring into Scotland another 1.4 billion pounds. The re are presently more than 20Korean companies (read multinationals)manufactu ring in Britain, apart fr om the factthat the largest Korean investments arc inthe European Union. While in 1992, the totalKorean investments were around 30 million

po unds , in 1994 , the total investmentsincluding that of Hyundai and its rivals, theSamsung group and LG group total 3.1 billion

pounds (ET, October 10, 1996)! Thesecompanies put together have created more

than 10,000jobsin Scotland. Another Koreanmultinational Daewoo has invested 1.5 billiondollars (in the process buying up a leading

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French company) in France to makeelectronic parts. These investmen ts are likelyto create more than 5,000 jobs. By buyingup the French comp any, Tho mso nMultimedia, Dae woo emerged as the wo rld' s

biggest television maker. Accordin g to the business press, "D ae woo' s deal is the latestin a series of massive South Koreaninvestmentsin Europe designedt oget behindthe European trade barriers and move closerto consumers (ET, October 17, )996).

These strategies seem but a part of a larger plan of eastern multinat ion als to global ise ,a strategy that includes competition amongAsian multinationals themselves; a

phenomen on that wa s ti ll re ce nt ly acharacteristiconly ofwestern multinationals.Thus, Hyundai Motors' six billion dollarglobal investment plan is aimed at makingthe company a top-iO global player and

break its reli ance on Jap anese know-how aswell as compete with Japanese capital.According to commentators, Hyundai now

has an economy of size and is now readyfor lobal competition (ET. October27,1996).It is noteworthy that in keeping with thistrend, several Indian companies are also inthe process of becoming multinationals readyexamples being Dabur, United Breweries,Cipla, Shalimar Paints, Ajanta Pharma, etc.These companies either have set up jointventures abroad or/and set up manufactur ing

plants on their own. Cip la which has mov edup the rankings to be the number 2 pharmacompany in India is continuing itsglobalisation drive. The company has enteredinto a memorandum of understanding (MOU)with Helio Pharma an Egyptia n compan y bywhich CipJa will provide technical know,how on a royalty basis for products in cardiac,anti-asthma, opthalmology and other areas.Cipla will use the marketing network ofHelio Pharma to push its products in Egyptand in due course also service other marketsin west Asia and Africa" (ET, August 30,1996). This joint venture is the thirdsigned by Cipla in the recent past. Accord-ing to the business press, Cipla has alsoentered into a marketing arrangement witha large Canadian generics producer, NovoPharm, and a similar tie-up with Med Pro,a South African company. These ventureswhich could lead to man ufactur ing acti-vities in the future are in addition to the

production joint ven ture the company hasset up in China.

Dabur is currently in a joint venture withthe Israel-based food company Osem bywhich Daburr can have access to the entire product range of Osem and can int rod uceany of its products in India (not withsta ndingthe fact that the Swiss multinatio nal Nestlehas acquired 40-per cent stake in Osem).According to a report the joint venture willhave its own independent distributionnetwork and Dabur's existing portfolio offood products will be sold through this

networks. Dabur is also in a joint venturewith Bongrain S A of France to make ch eese,with a leading US based Pharma firmSepracor Inc to manufacture Paclitaxel. ananti-cancer drug in Canada. Dabur is one ofthe many Indian companies that have floatedor are in the process of floating GlobalDepository Receipts (GDR), the funds whichwill be used to invest in joint venturesabroad, t oexp and, to modernise and upgradeits existing capacities as well as newacquisitions, expand its distribution net-work, etc.

Another company Shalimar Paints of theJindal group is actively planning setting upwholly owned subsidiaries in Myanmar(Burma) and Vietnam which will thus markits entry into overseas operations. Theseinvestments arc for setting up architecturaland industrial coating manufacturingcompanies (ET, March 11, 1996). IndianPharma companies are reportedly makingheadway in Cambodia and Vietnam, a notable

Indian company being Dr Reddy'sLaboratories. In the process, Indiancompanies face competition from westernmultinationals like Novartis (previouslyCina-Geigy), Rhone-Poulenc, which havealready or are setting up manufacturingfacilities in Vietnam. Notwithstanding thesame, Indian companies are reportedlyleading the race and according to a reccntresearch report of Baring Securities "IndianPharmaceutical companies are poised tochallengelargedrugmulti-nationalsinmany

parts of the world (ET, March 12,1996). TheTable gi ves an idea of the activities of Indiancompanies aoroad. The number of Indian

join t ventures and sub sid iar ies abroad as inFebruary 1996 stood thus.

The examples cited demonstrate thefact that globalisat ion of capi tal is a trulyglobal phenomenon with capitals movingall over the place. It also substantiates the

po in t made ea rl ie r that any in di vi du alorganisation of capital, in the presenthistorical p hase of capita l and i ts accu-mulation, has the potential of emerging asan advanced unit of capital, that is themultinational form. The process of globali-

sation of capital importantly, includes themultinationalisation of capital with com- pani es ir re sp ec ti ve of na ti on al or ig in s

becoming global corpo rat ions transcend ingtheir mother nations - thus a supranational

phenomenon . Th is is b est illustrated by theGerman company Mercedes Benz. Thiscompany is an example of the emergentinternational division of labour out totransform business as we know it.

According to the strategy of globalsourcing, considered by Mercedes Benz to

be the s trategy of the fut ure , assembly plan tsare located in regions where the market growsthe fastest. Consequently, Mercedes islocating its plants in Latin America and inthe Phillipines, Malaysia, Indonesia, India,Thailand and Vietnam. "It is setting upcomplete production facilities which willsupply specific types of cars to marketswhich will drive the m" [Shankar 1997]. Notonly that. Accordi ng to the report "M ercedesis not just making cars for the whole worldall over the world, but the parts it needs todo this also come from all over the world.The 12,000 workers who assemble 1,800

cars every day are the children of a newinternational division of labour 11 [Shankar1997]. In this arrangement the number of

parts in a car are reduced, the co mp any' sown plants produce 40 per cent of the car,the central elements which include the engine,the gear box, the axles, the car body itself- everything else is supplied from outside.Thus, "cable harnesses come from Austria,Bulgaria, etc, France and Japan supply theheating and air conditioning, Italy makes airducts, wood for the interior is made inRumania and Canada, circuit boards comefrom Malaysia and Phillipines, seat coversfrom the Czech republic while the naturalfibres come from south-east Europe andBrazil... If the world begins to see more andmore of such factories, one wonders whatwill happen to territorial ambitionsof nations"[Shankar 1997].

Globalisation of capital which thereforemeans and includes globalisation of

pro ducti on shows pro mis ing tendencies ofand towards creation of factory jobs theworld over cncompasing sex. race and skillespecially in non-western societies. This isactually leading to large scale job losses in

western socie ties, che ap labour bei ng a majorreason why companies relocate or set uptheir new production facilities in the second

TABL E: REGIONAL DISPE RSAL OF INDIAN JOINT VENTU RES ABR OAD

Source: V N Gupt a ' Ventur ing Abroad '. The Economic Times, February 2, 1996.

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and the third world. This deve lopment' off ers possibili ties for creation of large industrialwork forces for the first time in the newlyindustrialising societies. As Jaims Banajiobserves "In the last few yea n t here has beena shift in the global capital from OECD toeast Asia. The weight of global capital wasconcentrated in the OECD prior to this.Estimates suggest that 55 per cent of thegrowth in world output over the next fewyears will take place in east Asia. The battlefor global capital is going to be fought

between the OE CD and the east and thesouth east Asian countries. This states theimportance of the Asia-Pacific region. Andthis is what makes these exciting times forthose of us in this part of the world" [Banaji1994]. Banaji further observes thatglobalisation sets the context for aninternational workingclass movement. I will

be returning to this point subsequent ly.

FOOD AND AGR O- BA SE D INDUSTRY

So much for a short discussion on globa-lisation of capital, in general. It is pertinentto briefly survey the globalisation processthat is taking place in the foods and agro-

based industry wor ldw ide includ ing tobacco(henceforth, food and allied industry). Thissurvey could also serve as a context withina context (general globalisation being thelarger context) for the analysis andunderstanding of a multinational, BAT, andits Indian affiliate ITC which itself is actively

puft ui ng the business objective of becomi ngan 'Indian multinational'.

Globalisation in the food and allied industryhas been accentuated by some overallgoverning fea tures in the homelands of mostglobal majors in this industry in Europe andAmerica. These features include loweconomic growth or stagnation, stabilisationof population, saturation of markets, etc,which resulted in recession. To combat thesetendencies as well as to establish their

presence in the new eme rgi ng markets ofAsia, Latin America, the erstwhile SovietUnion and its satellite countries, the MNCsset in motion massive strategies of what has

been te rmed external and internal restructur-

ing of their business. External restructuringhas involved ashift away from diversificationto core activities in which the companiesconcerned have core competencies, andexpansion in these businesses worldwide. Italso involves defending their market sharesin their existing markets. This has made forinternal restructuring which means andincludes a review of production strategiesand locations, a review of production

practices, shi ft patt erns , man ning level s, andreduction of costs in all areas. Internalrestructuring is with the objective ofbecoming 'lowest cost producers', to make

use of new management techniques (exampleTQM, JIT, etc), to raise efficiency andeffec tivenessof the companies [Elshof 1994].

The two restructuring processes have astargets reduction of employee strength by 10

per cent and reduction in the number of production plants by 15 per cent.

Thus, observers of this industry like PaulElshof predict that with companies di vestingthemselves of non-core businesses andconsolidating their positions in their core bu si ne ss es by ex pa ns io n and th ro ug hacquisitions and mergers (A and M), theworld is going to witness in the coming yearssignificant concentration of capital in theindustry. A few multinationals are said todominate the world food industry, forexample, Nestle, Kellog and Unilever.Kellog's business strategy, for example,consisted of plant closures and retrenchmentsin the US, Europe and Australia resultingin the elimination of more than 2,500 jobs,

pre-tax savings of about 100 mil lion dollars per year in the US alone, and eff icien cyimprovements in the existing plants. Themanagement reasons for these above

measures have been that there wasovercapacity, sluggish demand and shrinkingmarket shares. While these measures arewhat has been termed as 'defensive strategy',Kellog's 'offensive strategy' has involvedconstruction of new production plants inLatvia, India, China and Argentina as wellas acquisition of a manufacturing plant inSouth Korea. The latter acquisition forinstance has enabled Kellog to capture 65

per cent of the South korcan market [Elshof1996]. Similarly, Unilever is also, in majorrestructuring excercises, disposing of noncore

bu si ne ss es and st re ng th en in g its co re bu si ne ss es that in cl ud e fo od s, so ap s,detergents and personal products, andspeciality chemicals. However evenspeciality chemicals has been divested thisyear as it is now considered by the companyas noncore! This means and forbodes greaterconcentration of Unilever in foods, and insoaps and detergents, globally.

The global food industry is thus passingthrough a frenetic pace of restructuring, theresult of which would mean fewer, largerand leaner multinational corporations left inthe field and intense rivalry among

themsel ves for market shares across the globe.Smaller firms though they would exist would be increasingly subordinated to these globalmajors who would have various strategicrelationships with the former likesubcontracting, buy-back arrangements, ctc.An equally important development as regards

products made by the global maj ors is thatthey are being made for the whole globe;thus global positioning of products. Byaggressive global marketing strategies thesecompanies are popularising common brandson a world scale, for example, Pepsi, Coca-Cola, Brooke Bond, Nescafe , Kit-Kat, Walls

ice cream, Cerelac, etc, Brand building has"taken on gigantic proportions with everycomapany going in for massive spending on

advertising campaigns, event sponsorshipand management (which itself has becomean industry like the advertising industry),domination of electronic media and so on.More importantly by means of informationtechnology, vast distribution networks arelinked to the corporate offices of these com-

panies which monitor the actual movementof products on the shelves. So much so thatat any given time the head office will knowwhat exactly is the stock position of thecompany's brands at various outlets, whatis the projected demand say for a week ora month, etc. This information in turn is fedinto the production system which increasinglyis becoming a flexible production systemturning out products just-in-time (JIT).

These tendencies are found in full measurein the tobacco industry which as mentionedearlier forms a part of the larger agro-basedindustry worldwide, like foods. The globaltobacco majors, like food companies, areintegrated forward and backward in the chain

of operations that commences in many casesi n growing tobacco onwa rds to i ts processi ngand culminating in the final production oftobacco products, the well known beingcigarettes. A few leading tobacco companiesalsocombine foods business in their portfolio(like Phillip Morris) and who are actuallydiversifying in a big way in the direction offood s. In India, B AT-ITC is a noted exampl ewhich is being the focus of the present article.A brief survey of developments in the tobaccoindustry worldwide is therefore pertinentwhich is the context in which BAT's andITCs strategies have to be located.

The tobacco industry, unlike foods, iscurrently in the throes of an increasing publicopinion which considers the industry to bea menace to good health. The antagonistswho include powerful opinion making groupscite growing medical evidence which pointto strong links between cigarette smokingand a host of terminal diseases includinglung cancer. Moreover, the companies'marketing focus on young persons has alsocome under severe attack. Currently i n manystates in the US, tobacco firms face law suitsfrom apparently brand-loyal consumers who

claim that smoking a particular brand for part icular leng ths of time has resulted incancer. They also claim that the companiesdid not warn the consumers of the addictive power of nicotine, a key ing red ient incigarettes, though the companies hadknowledge of the same and so had suprcssedit. s The growing public hostility, a featureconfined to western society largely as ofnow, has however had negligible impact onsales and profits of cigarettes. For example,in 1996, BAT the world's biggest privatelyowned cigarette manufacturer reportedan 18 per cent increase in sales boosting

pro fit s by 54 percent to 1.256 billion pounds.The company now claims a 12.4 per centshare of the world market and is highly

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optimistic about growth in the near future[Butler 1997].

However if public health awareness andresponsive state actions are any indicationof the things to come, the cigarette i ndustryas a whole is faced with bleak prospects inthe long term in its traditional markets, mainlyin Europe and America. Indeed the tobaccocompanies seem to be aware of this scenarioand are drawing up appropriate strategies.This is one significant reason for thecompany > making their aggressive push intothe new emerging markets. As trade barriersrelax in the latter's economies, the MNCsare gearing up for competition to emerge asmarket leaders. As of now itself in onemarket that is China, B AT alone is reportedlymaking 200 to 300 million pounds annuallyin sales considered that so far only 4 per centof cigarettes sold in China are foreign made[ibid]. In short, "certainly there is no globalshortage of consumers, many of whom are

becoming avai lable to western companies

for the first time" [ibid]. As Butler observes"This interest in overseas market s is not new , but it is only now that the pay-offs and theirimplications are becoming apparent as themultinationals report profits from thedeveloping world beginning to rival theirtraditional bases" [ibid].

BAT's GLOBAL STRATEGY

It is in the context of the saturated traditionalmarkets and the uncertainties therein, coupledwith or perhaps more importantly theemerging business opportunities in the restof the world, that BAT's strategies have to

be located. Indeed, BAT is not alone in this process but faces cut- throat competit ion fromits traditional rivals like Phillip Morris andR J Reynolds who are also displaying thesame business drive. BAT's global strategyhas been concisely sumn^J up by one ofits senior global marketing managers thus"BAT wants to be like Coca-Cola.Globalisation is a trend, and a consumershould be able to find B AT's brands whereverhe goes" [Penteodo I996J. This objecti vefinds its methodology in profligate eventsponsorships, advertising, and importantly,

producing nearer the markets. Select brandsconforming to global standards, consideredinternational brands' are thereby promoted

in all the major markets. It is the samestrategy that governs BAT's operations inIndia as it does in other markets includingthe Czech republic, Germany, Russia,Ukraine, Poland and Pakistan. In good time,BAT wants to extend the strategy to the UStoo where it currently trails behind its rivalPhillip Morris.

As part of this global strategy, BAT iskeen to promote its international brands inIndia. Like the case worldwide the

competitors of BAT too appear keen to fightfor the vast Indian market. The route thatis typically taken by them are the joint venture

agreements with Indian tobacco companies.For example, the UK based cigarette majorRothmans of Pall Mall has entered into a

joint venture agreement with San jay Dal mi aowned GTC to manufacture and market theworld renowned brands of Rothmans i n India(reportedin EconomicTimes, June 17,1995).Like in all join t ventures of Indian compa nieswith foreign firms the present agreement issaid to benefit GTC in that it enables thecompany to move into the 'premi um' segmentin the cigarettes market in India, Rothmansand Pall Mall being world famous brands.The second example reported is that of RJ Reynolds which is teaming up with anotherIndian company NTC to make and sell itscamel brand in India besides sourcingit fromIndia for the south east Asian and Russianmarkets. Not to be outdone, BAT's keenestcompetitor in the global markets, PhillipMorris, which already owns a 36 per centstake in the Modi-owned Godfrey PhillipsIndia and which earlier was denied permission

by the Indian government to set up a wholly-owned cigarctte company, has managed toenter India. It has done this making agro-

based food pro cessi ng as its 'principal business' whil e its tobacco business in alllikelihood is implicit in "other products ofits applicants and affiliates" which it proposesto make. As was reported "Phillip Morrisis all set to enter the Indian cigarette marketthrough the back door" (ET, September 22,1996). The multinational has set up a whollyowned subsidiary unit in India forthc purposeand besides food processing, also appearsto be preparing for launch of its world famous

cigarette brands that include Marlboro,Virginia Slims, Players, Basic, Alpine,Cambridge, Bristol, etc. The Indian market,consequently, is likely to witness cigarettewars like the cola wars.

The focus of BAT's business in India istobacco, and financial services, these beingits core businesses worldwide (for the purposes of this ar ticle financial services arenot considered). Towards this end itsstrategies consist of floating a wholly ownedIndian subsidiary besides having an active

business relationship with its Indian affiliates

ITC and VST (as in February 1997 the proposal for a whol ly owned subs idiary isawaiting clearance fort hc foreign investments

promotion board - FIPB). BAT has alreadycommenced structuring the proposedsubsidiary which include staffing its seniormanagement positions with a managementteam comprising managers who have hadglobal experience. According to business

press, "BAT has earmarked investmentsworth 200 million dollars through thisIndian operations" (ET, February 16,1996).According to the report, on top of the listof priorities for the management team of this

subsidiary, are launching of BAT brands inIndia. The latter include two of its top brandsState Express, 555 and Benson and Hedges

along with a mid-segment king size brandJohn Player Gold Leaf. The other brandsscheduled to be launched is Lucky Strike.While the wholly owned subsidiary is thevehicle channelising BAT's brands in India,the production and marketing is through

joi nt ven ture with ITC and VST. To da te itsstill not clear as to what exactly BAT'sdecision is in this regard (that is selectinga joint venture partner). This indecision ofBAT has much to do with the complexrelationship it has had with ITC, the latter

being a reluctant partner at best and a rivalat worst having its own global ambitions.This dime nsion would be ex plicated at lengthsubsequently. An attempt would be made to

port ray the comple xity and hete rogeneitythat characterises the relationship betweena multinational and its subsidiary.

The initial strategy of BAT in India asregards a vehicle for its Indian operationswas, and apparently still is, the attempt tosecure decisive control of ITC. BAT attemp-

ted tod oth isb y hiking its equity shareholdingto 51 per cent in order to secure controllinginterest. Alternately, in December 1995-January 1996 since it had around 34 per centshareholding, asuccessful attempt at securing5 per cent more could have placed it higherthan the Indian financial institutions whoseshareholding stood at 38 percent. Thus theequity mop-up and consequent strengtheningof its presence on the board of ITC couldhave made matters easy for BAT. Thisstrategy code named 'Operation Trout' was

put intoopera tionaround l99 4a nd BA Th adreportedly alloca ted 1 billion dolla rs as theinvestment. However, the plan ran into veryrough weather f ollowin g the dissent expres-sed by a section of ITC's top managementresisting BAT's move to convert ITC intoa full fledged subsidiary. This section wentin for a no-holds-barred confrontation withBAT propounding in the process, a visionof ITC as an Indian multinational, obviouslyhaving overtones of corporate nationalism.This was a novelty in corporate India whichled to the matte r remaining for long in a stateof flux. It created apparently chasms withinthe ITC, called into play the role of

bureaucracy apart from of course the financialinstitutions who as shareholders tended togo along with the vision of the corporate

patriot s. A bitter bat tle ensued in the boardroom, in the business media and outside with

both sides hurling al legations at one another.It is not necessary to describe this episodein greater detail presently. The outcomehowever has been that the leading opponentsof BAT within ITCfind themselves behind bars and their managerial credibi lity sufferingsevere erosion as they have allegedlycommited malprac tices and are awaiting trial.

BAT however seems to have realised thehazard of putting all eggs in one basket, soto speak, especially in the aftermath of itswrangle u ith its affiliate ITC. Consequently

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it has, since, trained its sights on anotheraffiliate company the Hyderabad based VST{Vazir Sultan Tobacco) in which too it is thesingle largest shareholder. Unlike in ITC, ithas not faced opposition from any sectionof stake holders or management. This doesnot mean however that it has abondoned

business relationship with ITC. The proposed joint venture by which ITC will man ufact ureBAT's international brands for BAT stillstands. But it is here precisely that BAT'steneuous relationship with KTC once againcomes into prominence. ITC apprehends aserious threat to its own top brands as aconsequence of BAT positioning its brandsalongside those of ITC in the market t hroughthe proposed joint venture. Senior ITCmanagers reportedly hold the view that BATcould channelise its brands through ITCitself rather than through a seperate jointventure (7, December 6, 1996). Thisargument has however not found favourwith the FIPB before whom this

representation was made since the BAT proposal for the jo in t ven ture has beenrecorded in the minutes of an ITC boardmeeting. However ITC has reason to beconccrned because it would only makematters worse for it as its premi um brand s- Classic, India Kings, etc - would then haveto compete not only with the joint venturecompany which would be a seperate entity

but also with the likes of Phi lli p Morris 'sMarlboro and R J Reynolds' s Winston brand.The ITC officials have reason therefore toworry that this development can affect thegrowth of ITC i n the premium segment wherevalue addition is maximum. Therefore "the

joint venture is the latest aspect of the s truggle between the Indian tobacco major and itssingle largest British shareholder. (ET,December 16,1996). At VST however, BATfaces no such problems and there have beenreports of VST bein^ elected as venture

partner (t T, De ce mb ( T2, 1996). Th us wefind a unique case of a (British) multinationalwhich desires controlling interest in its(Indian) affiliate in pursuit of its global

bus iness s trategy, and the Indian affiliate hasglobal strategies of its own, wanting to glfabout them independently and consequentlyresisting its imperial parent. The businessstrategies of ITC thus logically become ourfocus at this stage.

I T C ; B U S I N E S S S T R AT E G Y A N D

L A B O U R P R O C E S S

ITC which is one of India's oldest and biggest com pan ies , tr adi tional ly operated inthe business sector of tobacco and cigarettesin which it is market leader in India. In asteady diversification it forayed into hotels,

paper and paper bo ard, pa ck ag in g and pr in ting , hybrid se ed s and ed ib le oi ls ,

international business, and financial services.In a bid to emerge as a conglomerate, itdiversified into unrelated areas like power

generation even while emphasising that itscore business is tobacco. The currentrestructuring phase which began around the1990$ witnessed ITC making massiveinvestments in agri-business. This includedsetting up a seed processing plant, and edi bleoils plant one in Andhra Pradesh (which hassince been commissioned) and another inRajasthan. However, the agri-businessventure has not proved to be profitable leadingthe company deciding not to make freshinvestments in this area. The companydevise d, and apparently i ntends goi ng aheadin its food processin g venture with plan s fora vegetable processing and frozen foodsfactory in Karnataka. The other relatedinvestments have been in aqua culture apartfrom ventures in financial services andinternational trading. The recent corporatestance as evident in the 1996 annual generalmeeting (AGM) has been the strategicintention to continue the focus on the tobacco

busin ess who se turnov er has increased by

22 percen t and which contributes the largestin terms of sales and profits; in short the predom inant bus iness. In the present arti clewe will therefore be exclusively concernedwith this business.

In the present national and international bus iness scen ario i n the tobacco and c igarcttesector, ITC finds itself facing the followingchallenges, viz, competition from BAT's

bra nds both in the domes tic market andoverseas , compet ition from other multi-nationals entering India as well as overseas ,domestic competition from companies likeVST, GTC, Godfrey Phillips coupled withthe challen ge that ITC has set itself - toachieve global status as an internationalmanufacturer and marketer of cigarettesconforming to global standards. The objectiveof becoming an Indian multinational ishow the company has understood thetheme and process of globalisation, anunderstanding which it wants to translateinto practice by a host of aggressive

production and market ing strategies whichwould be narrated shortly. As regards thequantum of production, its intention is toincrease cigarette manufacturing capacity

from the present 53.79 billion sticks perannum to 116.09 billion sticks per annum.In July 1996 it had applied to the Indiangovernment for permission to increase itslicensed capacity by 115 per cent. The totalinvestment required for this expansion isestimated to be Rs 400 crore.

The compa ny' s present pol icyis to u pgradethe existing factories, build an ultra-modernfactory at Bangalore, and in all the factoriesgi ve topmost priority to increasi ng productionand productivity. The factories at Bangaloreand Saharanpur have especially been chosenfor this expansion. The two plants whose

licensed capac ity presen t! y i s 19 billion sticksand 13.7 billion sticks per annum respectivelyis proposed to be increased to 60 billion

sticks and 35 billion sticks per annumrespectively. The planned investment forSaharanpur plant is Rs 135 crore while forBangalore factory it is Rs 300 crore. Thesearc apart from ongo ing investment s. Further-more, the modernisation and expans ion plansof ITC plants in general is estimated to costanother Rs 600cro re. These objectives under-go their crucial test on the shopf loor and thisis where labour and unions come in.

Constant technological change withtechnology being harnessed to business

purpo se has almost bec ome an arti cle of faithat ITC. Driven by sheer business realitiesITC management seems to have becometechnology conscious like never before. Newtechnology induction which is clearly goingto be more frequent from now on includesautomation and consequent workreorganisation. This invariably leads to, infact already has led to, significant surplusageof the work force, redeployment, changes inmanning levels, shift patterns, increased

machine speeds, continuous production, etc- a kind o fintensi fication of every productionfacility. The long term agreements (LTA)the company has signed with the unions atits various plants in India seem to providesignificant scope and flexibility for manage-ment in the organisation and reorganisationof the work process. Though as of now thereare no serious threats to job security, thescenario for labour is indeed complex in thesense there is an increasing possibility ofworkers becoming appendages or adjunctsto machinery and hence dispensable.

It also depends on how one looks at aquestion of jo b loss. It cannot be denied thata massive input of new technology at one

plant and all of it in one tim e resu lts in jo bloss. Historical experience at ITC bears thisout. In the early 1980s the companyautomated its leaf tobacco plant in AndhraPradesh. The plant which processes tobaccoleaf and sends the tobacco so processed tothe cigarette plants has a major operationwhich is seperating the tobacco leaf from thestem which invo lves cuttin g, etc. Prior to the1980s, this task was being undertaken bymanual labour predominantly by women

employed on a large scale. With this operationgetting automated, thous ands of women whohad defined their working lives by this taskthat they performed, lost their means oflivelihood. Given the fact that a majority ofthese workers were also dalits and henceabysmally low in the socio-economichierarchy made matters only worse for them.

Another interesting feature is that manyof the ITC plants are located in interior and

bac kward reg ion s. These reg ion s are alsowhat can be called one-factory areas, theonly factory there being ITC. It is perhapsa deliberate strategy on the part of ITC

historically to locate factories thus though'rational' reasons could nevertheless beadvanced. Location of plants in such areas

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is a feature common to most businessdivisions of the company. Examples: leaftobacco plant (Chirala, Andhra Pradesh),cigarette plants (Saharanpur, Munger), paperand paper boards plant (Bhadrachalam,Andhra Pradesh), seeds processing plant(Kurnool, AP), edible oils plant(Mantralayam, AP). It is of course highlycommendable for ITC to tout social

consciousness in locating plants in backwardareas. Doubtless, the area concerned might benefit overall but the dangers for labourworking for ITC in those locations is ever

present. Having no other viab le livelihoodalternatives, workers though Tree' in theeconomic and legal sense do not havesubstantial bargaining power.

The loss of bargaining power and hencecapitulation to managerial strategies arisesfor labour in two ways and in two contexts.On greenfield sites, the work force s who forthe most part are first generation factoryworkers and have no exposure to industrialculture includi ng trade unionism, come underthe unilateral power of managements. Theyare typically employed on daily wage basis(the wage patently being low), have no unionsin a meaningful sense, do not have the benefitsthat are usually available to organised labour(including ITC organised labour) and can beeasily hired and fired. In addition, contractlabour is also employed in considerablenumbers. Overall, it is a highly irregularwork forcethat is employed in such locations.In this situation, the managem ent's thrust onhigher and higher productivity with

progressive automation can easily be realised.The other situation is where the plant

concerncd is quite old having been locatedin an interior area quite long ago, which hasa regular work force, which has a union inthe conventional sense in which collective

bargaining does take pla ce and a system ofindustrial relations does exist. Even herehowever management has the upper handover the 'labour process' because being onefactory area, the union cannot fight beyonda certain point without risking closure of the

plan t.At the Calcutta plant of ITC, the manage-

ment's apparently long term plan ofrat ional isat ion/modernisat ion whichcommenced at the turn of the 1990s resultedin job loss. In September 1992 the companyintroduced a voluntary retirement scheme(VRS) by which the work force fell from735 to 464. This can be directly traced tothe rationalisation that occurred at this timewhich resulted in technological upgradation.The LTA signed in 1993 between themanagement and the union contain explicit

production targets . The management sitedthe need for the company to be competitiveon all fronts, global competition fast

becoming a rea lity . 1993 onward s, as per theagreement, workers were enjoined to produce16 million sticks per day and move up steadily

to 18 million thereafter. This was in 1993.Given the fact that in 1996 the average daily product ion as of now is 20 million sticks perday is testimony to the effectiv eness of IT C smanagerial strategies!

This was possible due to two main re ni ns :(a) Introduction of sophisticated technology,and (b) workers and unions positivelyresponding to the same. An earlier attempt

in 1997 to introduce new technologyapparently met with resistance from theunionand was not therefore a success. Presentlyhowever, as admitted by both managementand union (in interviews conducted withshop floor managers and unions by theauthor), workers and union seemed to haveresponded positively to management. Themanagement put before the union the demandthat viability of Calcutta plant as comparedto ITC's plants elsewhere was vital giventhe fact that Calcutta plant was producingthe lowest (the Bangalore factory on theother hand produces 60 million sticks per

day). Viability therefore meant for themanagement more and more production inthe Calcutta plant which naturally is also thedemand that they have been making at other plan ts too. The policy thus seems t o pit onefactory against the other and make workforces in all the plants compete with oneanother to give more production.

Secondly, the management at Calcutta plant also succeeded in push ing through a350 working days per year settlement withthe union. This enables management to runthe plant continously round the year, workersgetting their weekly off on a staggered basisand not all on a particular day. Here againunit viability was the reason sited by themanagement, the union agreeing to the same.For the union, there were other reasons too.

Namely, the agreement made poss ible, therecruitment of 110 workers into the workforce (though one feels that the managementwould have recruited them anyway), theearnings of individual workers went up onan average by Rs 250, festival leave wasincreased by one day, one more increment,etc. Presently the management appears intenton introducing this concept at other plants

too - Saharanpur, Munger, Bangalore.At the Bangalore plant, the management

at least from 1987, has been showing akeenness on enhancing productivity via theroute of modernisation. In 1997, after theCITU leadership took over the union,management refused to negotiate with theunion "unless it accepted the managementcharter of demands on modernisation whichincluded closing down the commercialdepartment as a result of computerisationmaking 40 clerks redundant. Following a 97

per cent affirma tion in a secret strike ballot,the workers went on a four-month strike in

1987-88 refusingt o accept the manage ment'scharter" [Banaji 1994:16]. After the striketoo, there were industrial relations problems

related to work process with managementreducing manning levels, dismantlingmachinery, changing shift patterns as wellas effe cting closure of particular departments.One such department, the machinedevelopmen t unit was proposed to be closeddown on the ground that i mport liberalisation

policy of the govern ment had made the unitunnecessary. At first they wanted to retrench

35 technical workers made redundant by thisclosure through a VRS. The union washowever able to persuade management toretrain these workers as operators.

In 1991, 125 workers were recruited andin 1994, there was a VRS by which 128workers left service. In 1995 the factoryunderwent expansion and 100 workers wererecruited in the general category (the presentstrength being around 1,800). It appears thatin every phase ot expansion there is actuallysome recruitment being made which goes alot to speak about the union's apparentlyfirm stand that more workers are needed formore production. But what could be thefuture trend? The union's perception is thattechnology induction might lead to someretrenchment but then demand for more produc tion is also there. In fact managementmay be actually interested in retainingemployees especially the skilled workers.The company has sent many techniciansabroad for training with the firms supplyingmachinery. The company would definitelynot like its competitors grabbing theseemployees were they made to quit their present employm ent!

Another example is that of the other BATaffilia te VSTs plant at Hyderabad Since thecommencement of the 1990s, there have been two VRS sche mes; the first schemeintroduced in 1990 accompanied sometechnological change while the secondscheme introduced in 1994 can, accordingto unionists, be directly attributed tomodernisat ion. Both the schemes put togetherclaimed around 450 jobs. Like at the ITC'sleaf tobacco factory cited earlier, VST toois believed to have employed many womenworkers in tobacco leaf processing who losttheir jobs after the unit was shut-down. At

VST too, mostly by the 1994 technologicalchange, automatic machines have replacedmanually operated machines thus increasingmachine speeds by 100 per cent; the wrappingoperation speeds have increased from 180

boxes per minute to 250; man-machine ratiois likely to be reduccd in the near future from11 workers per machine to seven workers,etc, apart from other changes. Managementis believed to be contemplating another VRSas it wants to reduce manpower.

On a surface readingof the labour processsat ITC plants, there does not seem to be adirect threat to jobs on a large scale, as ofnow. The point is that labour is in for morecomplicated industrial relations times. Theissue is more of re-deployment, re-training

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(will the management undertake it or not?),recruitment of new workers besides of coursethe productivity linked wage relationship.All these in the context of an aggressivemanagement striving to introduce uniform

policies at all its plants; as reflected for example in the nature of their cou nter demandseuphemistically called proposals, made onthe unions during negotiations for LTAs.

How does one relate the shop floordevelopments at discrete plants of a companywith the larger macro level, almost universaltendency that is globalisation of capital? Theresponse consists, first, by properlycomprehending the production strategies ofglobal capital. As Jairus Banaji observesglobal capital wants tighter control overinvestments, cost-effective productionstructures, and pliable work forces isolatedfrom the influence of unionism" (Banaji1994]. This implies that plants, and workersworking for multinational companies andtheir affiliates are increasingly bound to be

subject to control of corporate strategiesdevised at global headquarters. This linkcannot be discerned directly but can be seenin the consequences emanating from theresults of such strategies. Thu s as cited earlier,when Kellog decided to close down some

plants and mod ern ise , that is exp and tho seexisting to cater to single or larger marketsor when BAT decides to exploit the

production faci liti es of its Indian aff ili atesto manufacture and sell in targeted marketsor to source, these decisions have direct andindirect impact on the work forces whichactually make the product. It is consequent

to these decisions only that particular plantsarc opened, closed, merged, rationalised,etc Jea di ng to recruilment, retrenchment, re-deployment, etc, of work force s/' While thishas been the usual case with multinationalfirms the ongoing globalisation process hasaccelerated the same

In the present case of BAT-ITC from theabove narrative-description, it is apparentthat the workers and unions have to contendwith not one multinational but two. Thelatter are partners and rivals by turn. Theycompete as well as collude. When it comes

to labourho wever, the commo n denominatoris extraction of more 'surplus value' notnecessarily by naked , direct and trutalexploitation but by mechanisms which area part of tools-in-trade of 21st centurycapitalism - technocratic, preponderance ofinformation technology and backed bysophisticated ideological control techniqueslikeHRM.TQM.etc.Theworkers' responseto globalisation perhaps lies in devising ona consistent basis counterslrategies on aglobal scale.

The example of BAT shows how an MNC pursues its b usines s strateg ies in the current

period of glo bal isa tion of capi tal . It pur suesits strategies in short as global capital.Consequently , the riposte to global capital ism

essentially ought to come from labour (andunions) working for global companies theworld over. A basic process here is theest abli shm ent of a 'ne w level of co-ordination'. As Jairus Banaji citing theexample of BAT-ITC observes "Unions inIndia are no longer confronting some inert'national' capitalism but an increasinglysophisticated global capitalism which cannot

be handled effect ive ly if uni ons themse lvesdo not establish anew level of co-ordination...The new global capital wants to minimisethe intervention and impact of newunionisation by staving off the entry of unionsfor as long as it can" [Banaji 1994:66]. Itdoes this in various ways including by settingup production facilities on 'greenfield sites'and/or not making fresh investments in itsexisting plants (if any) where there would be strong union presence but by 'moving togreen fields'. The consequence for the tradeunion concerned is that the clock is set backand it has to begin unionising new work

forces at the new production sites of thecompany o nce again from scratch; apart fromensuring always that unionism at the oldersites does not get disorganised. The lattercan happen due to managerial strategy again:shifting production away to the new sites,(then) claiming that the present unit has

become unv iab le and there for e set abou tretrenching the 'redundant'. This in turnresults in erosion in strength of organisedlabour and therefore a reduction in thestrength and power of the union.

The workers' response to globalisationobviously cannot be of a terminal nature,namely, saying NO to globalisation, unlikeother social groups who having no exposureto or experience of industry can take sucha stand out of intent or ignorance. The pathfor labour therefore is only organisation -to organise for securing constantly belter

price for thei r labour power and for thei rindividual and collective emancipation, Hereorganisation mean s unions on a global scale,since global capital can be adequatelyengaged only by global unions. Actually, ina deterministic fashion virtually, globalcapital itself is making possible the linking

upof the working classes of different regionswhich work for it, It does becomes possiblefor the first time to bring together labouremployed on a remote greenfi eld' site inthe third world with that of the first worldunder one union umbrella. As globalisation proceeds inexo rab ly, global uni ons appearincreasingly to be the unions of the future.This is so since, increasingly, capital can not be effec tivel y engaged at local, regional andeven at national levels.

The problems of gl obahsing unionis mare,doubtless, immense. Numerous questionscan be thrown up by various sections in the

labour movement within the country andoutside. The questions include politicalaffiliations and interests, the level at which

the globalising has to take place (at plantunion level, at company wide federation level,at the level of the particular industry itselfwhich me ans a national level, etc), the quest-ion of leadership and last but not least thequestion of democracy in the new level of co-ordination. These questions therefore demandattention. Say ing anythin g more at this stagewould be inappropriate amounting to layingdown a prescription for trade unionism.

INTERNATIONAL UNIONS: THE I U F

Actually, there have been internationalunions for quite some time now. Theirrelevance however is increasing manyfoldonly present ly. An example of what an inter-national union is and can do, is the Geneva

based Internationa l Union of Food Worke rs(IUF) which is a global confederation ofworkers' unions in food, agriculture, hotel,restaurant, catering, tobacco industries.

In the thinking of the IUF "globalisationof the world economy... is a product of

human thought and human determination,and it can therefore be contested by peopleorganised to give practical expression totheir collective political will [IUF 1996].The current model of globalisation whichthe IU Fd ubs as neo-Iiberal free market modelof globalisation has, in its view, created"unprecedented global competition leadingto a downward spiral in wages and workingconditions as workers on a global scale areforced tound erbide achoth erjust to survive...[ibid]. At a recent cofcrence of the IUFwhich brought together unions from variouscountries in the MNC dominated food andagri-business sectors, participants stressedthe need for a social-democratic approachto globalisation as an alternative to the neo-Iiberal model. "Such an approach couldinclude a global social ch arter to protect the

basic rights of workers ev ery where. It couldalso uphold right of workers everywhere totake strike action in solidarity with workerselsewhere. That is, we need a global safetynet as well as the means to ensure that noworker is allowed to fall through the safelynet due to the actions of repressive govern-ments. Society also needs to regain controlof capital which is increasingly beingcontrolled by maj or global companies [ibid].

Theorganising strategy of an internationalunion includes developing co-ordination

between workers employed by multinationalcompanies the world over. For example, inthe Asia-Pacific region, the IUF hasdevelop ed a co-ordination process for unionsrepresenting Nestle workers who meetregularly, exchange information, etc. Byestablishing thesystemof co-ordination (andnomin ating certain unions to be the co-ordinating uni ons fo r the purpose), it becomes possi ble to exchange informati on between

relevant unions as well as to represent theconcerns of these unions to the centralmanagement of the particular MNC.

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Secondly, by means of international unionsit becomes possible to secure and enforceinternational standards of workers' rights.For instance, the 1UF has secured agreementson trade union rights with Danone, a globalmajor in the food industry, and Accor, aninternational hotel chain. "Ensuring that theserights are secured for workers employed byMNCs in all countries in which the MNCshave operations helps to set a standard forall other workers in these countries. With

better co-ordinat ion and information ex-change within unions, central managementscan be made more accountable for theiroperations everywhere [ibid].

International unions by means of co-ordinated solidarity measures which includei n format ion exchange can actually strengthenlocal bargaining to produce greater equality(in wages, working conditions, etc) amongwork forces, working for the same em ployerworldwide. According to Banaji andHensman (1990), collaboration between

unions in the same multinational corpora tionworldwide would certainly be crucial inreducing the level of disparity, to a limitedextent also save jobs; fo r exam pic, by helpinglocal trade unionists to anticipaterestructuring measures or to formulate'alternative plans'. These would go a longway to promote international collective

bargaining. However, as Banaji and Hensmanimply unless unions question the sociallydestructive competitive rationality which lies behind management decision^making- wherethe pursuit of profitability governs theselection of products, automation (for

example) is used to increase work loadsrather than reduce them, managementsenforce the co-existence of long hours ofwork for some with unemployment for others- the riposte measures cannot bring in themaximum effect. As they argue "what isnecessary, ultimately is a formulation ofemployees* plans on an international levelto reflect and respond to the inter-nationalisation of production which themultinationals have brought about [ibid].

P O S T S C R I P T

The reality of themultinational corporationhas been best described by Stephen Hymer(1975) with reference to The Communist

Manifesto thus:Substituting the words Multinational

Corporation for bourgeois in the followingquote from The Communist Manifesto

prov ides a more dynami c pic ture of themultinational corporation than any of its

present-day support ers has dared to put fort h:

The need of a constantly expanding marketfor its products chases the multinationalcorporation over the whole surface of theglobe. It must nestle everywhere, settle

everywhere, establish connectionseverywhere. The bourgeoisie has through itsexploitation of the world-market given a

cosmopolitan character to production andconsumption in every country. To the chagrinof Reactionists, it has drawn from under thefeet of industry, the national ground onwhich itstood. All old-established nationalindustries have been destroyed or are daily

being destroyed. They are dislodged by newindustries whose introduction becomes alife and death question for all civilisednations, by industries that no longer workup indigenous raw material, but raw materialdrawn from the remotest zones; industrieswhose products are consumed not only athome, but in every quarter of the globe. In

place of the old wants, satisfied by the production of the country, we find new wantsrequiring for their satisfaction the productsof distant lands and climes. In place of theold local and national seclusion and self-sufficiency, we have intercourse in everydirection, universal interdependence ofnationals. And as in material, so also in intel-lectualproduction.Theintellectualcreationsof individual nations become common property. NationaI one-sidedncss and narrow-mindedness become more and more impossi-

ble and from the numerous national andlocal literatures there arises a world literature.The multinational corporation, by the rapidimprovement of all instruments of

production, by the immensely facil itatedmeans of communication, draws all, eventhe mosl barbarian, nations into civilisation.The cheap priccs of all its commodities arethe heavy artillery with which it battersdown all Chinese walls, with which it forcesthe barbarians' intensely obstinate hatred offoreigners to capitulate. It compels allnations, on pain of extinction, to adopt the

bourgeois mode of production, it compelsthem to introduce what it calls civilisationinto their midst, i e, to become bourgeoisthemselves. In a word, it creates a worldafter its own image.The multinational corporation has subjectedthe country to the rule of the towns. It hascreated enormous cities, has greatly increas-ed the urban population as compared to therural, and has thus rescued a considerable

part of the populat ion from the idiocy ofrural life. Just as it has made the countrydependent on the towns, so it has barbarianand semi-barbarian countries dependent onthe civilised ones, nations of peasants onnations of bourgeois, the east on the west.The multinational corporation keeps moreand more doing away with the scattered stateof the population, of the means of production,and of property. It has agglomerated

population, centralised means of production,and has concentrated property in a few hands.The necessary consequence of this was

political centralisation. Independent, or butloosely connected provinces, with separateinterests, loss, systems of taxation, andgovernments, become lumped together inone nation, with one government, one codeof laws, one national class-interest, onefrontier, and one customs tariff.

Notes

[The author thanks Sarath Dawala and Vasudhafor their encouragement and critical comments,and Srinivas for his assistance.]

1 In fact, business leaders of le adingmultinational corporations articulate a visionof their companies becoming globalcorporations, implying that they are no longerto be identified solely with countries of origin.

Notable examples are Asea Brown Boveri(ABB), and Mercedez Benz. The latter hat

been discussed in some detail subsequently.2 For an excellent discussion on the relationship

between an overseas parent company and anIndian affiliate, see T Thomas, T o Challengeand to Change. A Memoir', New Delhi,Penguin, 1993. Thomas who was the chairmanof Hindustan Lever, an affiliate of Unilever,explains the Unilever-Hindustan Leverrelt ionsh ip historically,showing convincinglyhow complex the relationship between anoverseas MNC and its subsidiary in the hostcountry can be.

3 In fact, the negative of globalisation on theworking class of the west is the subject ofraging debates in scholarly journals. See forexample Foreign Affairs (Volume 75, Nos 3and 4) where leading economists haveattributed the decline of jobs in the west tothe mushrooming of jobs in the east.

4 These kinds of restructuring mostly took placein the US and Europe. However, they artconnected to an even more aggressiveexpansion into Asia and eastern Europe,according to Paul Elthof, op cit, p 30.

5 Recendy, the state of Illinois following thelead of 15 other states sued the tobacco industryfor more than 2.5 billion dollars because ofhealth damage to smokers. The defendantsinclude an impressive list of leadingmultinationals in the industry - Phillip Moms,R J Reynolds, American Tobacco Company,Brown and Williamson Tobacco Corporation,and BAT. The nature of the litigation that takes

place in these matters and the manner in whichthe powerful tobacco companies fight backhas been brill iandy portrayed in John Grisham' sfiction 'The Runaway Jury', London, RandomHouse UK. Arrow Books, 19%.

ReferencesBanaji, Jainu (1994): 'Globalisation Resmictar-

ing and the Union', International Union ofFood Workers' Seminar Report p 8.

- (1996) 'Developing Strategies to FaceGlobalisation: Report of the IVF Asia-PacificGlobalisation Consultation Seminar,Philippines in Asian Food Worker NewsBulletin, February-July, Sydney, p 1.

Banaji, Jairus and Rohini Hensman (1990):Beyond Multtnationalism: ManagementPolicy and Bargaining Relationships inInternational Companies; Sage, New Delhi,

p 208. .Butler. Daniel (1997): 'Hooked on Profits'

Accountancy (International edition) London,February p 22-24,

Elshoff, Paul (1994): Seminar Report ofInternational Union of Food Workers Union,

p 28.- Paul (1996): Report for ECFK ell og' steeri ng

Committee Meeting, Manchester,January.Hymen. Stephen (1975): The Multinational

Corporation and the Law of Uneven Develop-ment in Huge Radice (ed) International andModern Imperialism, Penguin, p 39.

O Connor, James (1984): Accumulation Crisis,Basil Blackwell, London.

Penteado, Clandia (1996): 'Cutting Through All

Borden', The Economic Times , August 7,Shankar,IJRavi(I997): 'The Foreign Anatomy',The Economic Times , February 9.

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