Using Government to Control Multinational Corporations

Multinational Corporations have a great influence on a lot of people, this is beneficial because it provides jobs and increases GDP, trade, and economy, however it does mean that businesses have a great deal of power, which when coupled with factors like political influence, pressure groups and the media can make a company very powerful, able to control potentially thousands of jobs and staff wages.

Common Pressure Influence

Pressure groups, though not always an insider in government can have a great deal of credibility in preventing the control from multinational corporations. Pressure groups may also incorporate radical action and anti-corporation tactics, such as driving slow through London streets or protesting on a runway. However, Pressure Groups tend to focus on the ethical activities of organisations over preventing monopolies or unfair business practices, however, there are exceptions, the majority of this work is undertaken by unions.

Consumer action by boycotting products, spreading awareness on unethical factors or irresponsible activities can make a product less profitable or cause a business to re-think its stance on a particular product or practice, however, this form of activism can sometimes have no effect on the performance of a product due to its massive success or meager opposition.

Using Government to Control Multinational Corporations

The Government is arguably the most important factor in controlling MNC’s, from maintaining fair work arrangements, breaks, pay and holiday to preventing global price fixing and implementing transnational tariffs to protect local business and economy, the government to some companies could be seen as enemy number one. It is necessary to control MNC’s to manage their growth and influence in a country. Similarly a multinational may move abroad to save money on things like manufacture, however, this is bad for local jobs, it may increase profitability for an MNC. For this reason, it is sometimes probable that a government may subsidise the company to prevent it moving abroad.

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However some massive MNC companies have profits each year greater than entire country GDP’s, this could be seen as a failure of the government to control its businesses. Finally, although MNCs need control they do provide massive benefits to a country in trade, prosperity and GDP that make them worthwhile today.