Political influence:
Some MNCs are state owned.
State owned MNCs are subject to the political will of the government in the home country.
State owned MNCs will face little domestic competition.
This may limit innovation and make it difficult for them to compete in international markets.
Political control over MNCs may also come from the governments of the countries in which they operate.
An example of this here.
Should we worry about Huawei? The US government does. News stories here.
Legal control:
Competition policy.
In the UK The Competition and Markets Authority (CMA) can investigate anti competitive activities.
The EU Competition Commission takes on this role across Europe.
High profile cases:
Details here.
Details here.
Taxation policy:
A government could set a low rate of corporation tax to attract MNCs to their country.
Attempts at tax avoidance can force investigations by the relevant tax authorities.
Other laws to control MNCS
Minimum wage legislation.
Environmental controls e.g. fracking in the UK.
Pressure groups:
Organisations that seek to influence government, public opinion or business behaviour.
Click on the picture:
Pressure groups have several methods that they can use to control how MNCs operate.
1. Naming and shaming.
Barclays operated in South Africa during apartheid.
Starbucks and tax evasion.
Nestle and baby formula.
2. Direct action.
Demonstrations, protests, strikes, sabotage, occupations & violence.
3. Lobbying
Taking issues directly to policy makers in an effort to influence change.
Amnesty International guide to lobbying. Details here.
Social Media
Information can be collected and disseminated very quickly using social media.
Campaigns to force MNCs to change can go viral.
Greenpeace v's Lego. Details here.
