4.4.3 - Controlling MNC's Flashcards
What are the 4 Factors
- Political Influence
- Legal Control
- Pressure Groups
- Social Media
Explain Factor - POLITICAL INFLUENCE
Governments can Apply Pressure to Attempt to Change the Behaviour of MNC’S
- e.g. MNC’s been Avoiding Paying Tax in UK ; Starbucks
What are 2 BENEFITS of using POLITICAL INFLUENCE to Control MNC’s
- MNC’s may Wish to Get Political Approval from Gov’s of Host Notions -> may Help Trade and Setting Up in New Country
- If MNC’s gain Political Approval they may Find Trading Smoother and Less Troublesome
What are 2 DRAWBACKS of using POLITICAL INFLUENCE to Control MNC’s
- Politicians can Be Bribed, Common in Countries Outside UK
- some MNC’s bring So Much Wealth + Employment to Economy that a Weaker Gov may Ignore Unethical Activities, e.g. Brazil
Explain Factor - LEGAL CONTROL
if Country Introduce Laws to Reduce Pollution or Protect Children for Child Labour -> Increase Costs for MNC’s
MNC may Try to Ignore Regulation
What are 1 BENEFIT of using LEGAL CONTROL to Control MNC’s
- QUICK - Laws can be Passed at Any Point to Control MNC Action -> means Consumers have Rights Againgst MNC
What are 3 Drawbacks of using LEGAL CONTROL to Control MNC’s
- MNC’s may just Move to Country with Less Laws and Restrictions
- Host Country Doesn’t want to Lose Economic Input of MNC -> Deters Laws being Passed
- MNC can Afford Expensive Legal Defence of Any Control
Explain Factor - PRESSURE GROUP
- Organisations which Campaign for Changes in Law or New Legislation
- can have Strong Influence on Public Opinion and Behviour of MNC, If they Want to Avoid PR Distaster
What are 3 BENEFITS of using PRESSURE GROUPS to Control MNC’s
- Raises Public Awareness of MNC Acitivty in Host Countries
- Creates PR Problems for MNC Peacefully -> can Lead to Change in Behaviour
- can Cause Worker Strike + Boycott -> can Radically cause Change in MNC Behaviour
What are 2 DRAWBACKS of using PRESSURE GROUPS to Control MNC’s
- PG Needs to be Large and Organised If it to Have any Impact on Changing Activities of MNC’s
- Size and Wealth of Largest MNC’S mean they Can Easily Counter/Quiten PG Activity
Explain Factor - SOCIAL MEDIA
- tools e.g. Twitter can see Swift Mobilisation of Public Opinion and hence Pressure on MNC to Change Behaviour
- SM can Turn Product Scare into National Crisis within Hours
- can be Used to Orchestrate a Boycott -> Affect Sales and Reputation of MNC
What are 3 BENEFITS of using SOCIAL MEDIA to Control MNC’s
- Powerful
- Pressure on Large Organisations
- Powerful Way to Alter Policy, Activity and Services
What are 2 DRAWBACKS of using SOCIAL MEDIA to Control MNC’s
- Only Effect Short Term Change as Internet is Dynamic, Fickle Customers Become Bored Easily and Move On to Next Scandal
- MNC can Just itself Down and Carry On with Very Little Impact on Activties
