4.4.3 Controlling MNCs

Question 1

multinational vs developing country impacts:

Answer 1

cause pollution/emissions = bigger impact due to power/influence/role model/duty cash reserve = afford it

developing country fail to implement health/safety strategy on local factory owned by large multination = protection/ legislation = not present/comprehensive , power/influence government = worried about withdraw

Question 2

MNC

Answer 2

business that operates (produces/sells) in more than 2+ countries

parent company === subsidiary

Question 3

why activities of MNCs need controlling?

Answer 3

protect against exploitation (workers/other business)
discourage resource depletion (environment)
ensure local culture are protected (cultural erosion)
discourage abuse of market power (not become too big)
protect domestic business (protectionism)

may be unethical by overworking employees

Question 4

things MNCs do to prevent bad actions

Answer 4

use of policies of protectionism
part of trade bloc
limit barrier to entry
invest in local businesses (subsidiary)

Question 5

political influences

Answer 5

1. politicians act to influence operations/ strategies of MNCs = trade initiatives/ trade delegations
   offer financial and non financial support
   host trade events
   parliamentary visits abroad = promote UK industries
2. subsidies/ trade incentives
3. protectionism

Question 6

laws to limit the impact of MNCs

Answer 6

1. tighten tax avoidance laws, co-operate with gov in other countries
2. labour laws (national minimum wage)
3. law governing promotional activity
4. competition laws
5. environmental laws

Question 7

pressure groups

Answer 7

organisations fights to influence actions of others for good of particular cause
e.g. environment, welfare, consumer trade union

influence (lobby), business, government, customers
(influence behaviour)|

founded on collective bargaining principle

Question 8

collective bargaining principle

Answer 8

need group to = positive influence

founds pressure groups

Question 9

examples of actions of pressure groups

Answer 9

Direct:

• lobbying
• boycotting
• criminal damage
• protesting
• civil disobedience

indirect:
- leaflets
- petitioning
- publicity
- provide research
- adverts

Question 10

types of actions

Answer 10

1. direct action:

2. indirect action:

Question 11

direct action

Answer 11

group tries to implement a policy or prevent implementation of policy itself, rather than persuading others

Question 12

indirect action

Answer 12

group tires to persuade others to act against particular cause

Question 13

3 main goals of pressure groups

Answer 13

1. change company policy
2. encourage legal changes
3. change public opinions

Question 14

scapegoats

Answer 14

larger businesses are made scape goats

Question 15

social media

Answer 15

virtual communities
communicate with actual and potential customers
e.g. blogs, online forums, viral mkting, podcasts, social networking sites

Question 16

aim of social media

Answer 16

reach wide audience (global, younger demographic)
culture of sharing e.g.likes/shares/favourites/retweet
raise awareness

Question 17

impact of social media on MNCs

Answer 17

1. better customer insights
2. exposure can convert to sales
3. facilitates almost instant customer service
4. cost efficient performance
5. connectivity & relevance to consumer preference
6. brand awareness and build corporate image

false information against the brand
risk of hacking
complete transparency
all publicity can go viral and be shared/re shared
evoke more negative than positive responses

Question 18

social media

Answer 18

use of virtual communities to communicate with actual and potential customers
e.g. use of blogs, online forums, viral marketing, podcasts, social networking sites

Question 19

lobbying

Answer 19

process of directly trying to influence key political decision makers to act in best interest of business