Controlling Multinationals

Question 1

How they can be controlled 1

Answer 1

Legal action from government

Can force companies to voluntarily improve behaviour

Question 2

How they can be controlled 2

Answer 2

Pressure groups

- campaigns in order to change public opinion

Question 3

How they can be controlled 3

Answer 3

Boycotts
(Nestle) no long term effects
Can damage brand and make less price Inelastic
Force companies to lower prices, lower profits
Or spend more on advertising to rebuild brand

Question 4

Why it is difficult to control them

Answer 4

Can be footloose
Can persuade governments
Reduce employee protection and tax to keep them
If powerful MNC can overthrow legal action

Question 5

Judgement

Answer 5

Ability to control depends on strength of government - developed more power
Public opinion depends on wether there is a positive image to protect

Question 6

Define MNC

Answer 6

Business that operates in more than one country