Controlling MNCs

Question 1

Key reasons why MNCs may need controlling:

Answer 1

• to protect against exploitation by MNCs
• discourage resource depletion by MNCs
• endure local culture is protected from MNCs
• discourage abuse of market power by MNCS:
• protect domestic businesses

Question 2

Political influence

Answer 2

Governments around the world have an uneasy relationship with MNCs

• on one hand, they want to invest in domestic economies (FDI) to create employment and economic growth
• on the other hand, there is a nervousness about the economic power wielded by major global businesses

Question 3

Pressure groups

Answer 3

MNCs have long been the targets of pressure group activity:

• pressure groups: external stakeholders
• tends to focus on activities and ethical practice of multinationals or industries with ethical issues
• through a combination of direct and indirect action, pressure groups can damage the target MNC or industry

Question 4

Consumer action and social media

Answer 4

Consumers may take action against:
- businesses they consider to be unethical in some ways
- businesses acting irresponsibly
- businesses who use business practices they find unacceptable
Consumer action can also be positive- supporting business with a strong ethical stance and record