4.4.3 Controlling MNC's

Question 1

Why do MNC’s need to be controlled?

Answer 1

1. To protect against exploitation.
2. To protect domestic businesses.
3. To protect local culture.
4. To discourage resource depletion.
5. To discourage abuse of market power.

Question 2

Controlling MNC’s

Answer 2

1. Legal Control
2. Political Influence
3. Pressure groups
4. Social media

Question 3

Legal control

Answer 3

• Tightening tax avoidance laws by co-operating with governments in other countries.
• Labour laws.
• Promotional laws.
• Competition laws.
• Environmental laws.

Question 4

Political influence

Answer 4

• State ownership.
• Subsidies and tax incentives.
• Protectionism - quotas and tariffs.
• Trade blocs.

Question 5

Pressure groups

Answer 5

Organisations who fight to influence the actions of others for the good of a particular cause.
- Tend to focus on activities and ethical practices of MNC’s.
- Media attention, protests and lobbying, boycotting, naming and shaming.

Question 6

Social media

Answer 6

The use of virtual communities to communicate with actual/potential customers.
- Reach a wide audience.
- Culture of sharing.
- Powerful way to raise awareness.