4.4.3 Controlling MNC's Flashcards
Why is state ownership very effective?
government can have full control over MNC and be aware of what it is doing and its funds
What are the 3 drawbacks of state ownership/
corruption
soak up all the capital
investment expenditure may be forgotten
What 2 ways can privately owned businesses by controlled using political initiatives?
tariffs and quotas
direct or indirect ownership restrictions on businesses
What 3 things are subsides designed to do?
help create factories and produce goods
help consumers buy products
exporting firms goods
How in legal terms do governments control MNC’s?
regulations, competition laws and taxation polices
What is competition policy?
exists to promote competition and ensure that markets operate as efficiently as possible
How do taxation policies help control activities of MNC’s ?
They help control tax avoidance and evasion
What is tax avoidance?
involves using legal methods to reduce the amount of tax that company’s
2 adv to using laws to control MNC’s?
helps improve competition
helps check corporate power
2 drawbacks of using laws to control MNC’s?
difficult to achieve consistent legal practice
not easy to enforce
What are pressure groups?
act as another control on MNCs where groups can publicise undesirable behaviour and threaten to damage the image of firm
What is the concept of naming and shaming?
involves publishing unethical behaviour threatening reputation of firm
What is direct action?
use of demonstrations, protests and strikes to achieve political or social goal
What is Lobbying?
taking issues directly to the government in effort to influence change
adv of pressure groups?
making info known to the public that they may have no known
