A multinational corporation is a business entity that has headquarters in one country while operating in many other countries. Examples of such corporations are Shell, IBM, Coca-Cola, General Motors, and many others that operate in various countries. These multinational corporations (also called MNC) usually have a centralized control exercised by the head office and control is usually extended to all of its subsidiaries. There exist several models that denote MNC and in some cases, they are referred to as transnational corporations or multinational enterprises. A multinational corporation is a term that has been used for several centuries, as early as in the 17th century, aimed at denoting business entities in several countries. As seen in most multinational corporations around the globe, there is a connection between the business entities and the economic and political aspects of a country. The corporate power among nations has been transformed and it seems that the world is taking a different turn. Yes, Robert Cox was right, Multinational Corporations rule the world.
Multinationals are too powerful
Nowadays multinational corporations influence the political aspects of the globe in quite a dramatic manner. Capitalism is an element of globalization that affects the changing world order significantly. The activities carried out by the nation or state remain overshadowed by the new multinational companies. Multinational corporations are among the top drivers of globalization due to their involvement in the industrialization of various countries across the globe. Thus, multinational corporations are steadily going global in quite a powerful way since they even dominate the world of politics. These entities usually control assets found in the parent country and many subsidiaries. The reason why these corporations have a big influence on the economy and politics is that their main objectives are the creation of profits and growth. They usually take advantage of market imperfections that restrict such vital economic gains as imports and marketing costs to go through national borders and customs. In the year 1970, most of the multinational corporations could be found in the U.S.A. The number of multinational companies in the USA rose from 7000 in the year 1970 to a whopping 35000 in the year 1990. In such cases, multinational corporations create a spread of American culture all over the world. This affects the politics of democratic states and the economics of all those states by first targeting the customer culture of the said nations (Kay, p. 89).
When the 100 biggest economic entities are evaluated, more than half are multinational corporations while a less number than that represent nation-states. An example of the difference between multinational corporations is that Shell can hit a mark of $68billion in annual sales that as compared to Nigeria as a state is 2,1/2 times the amount of income among the people. This explains the kind of influence these multinational corporations have on the nation-states around the globe. (Jensen, p. 52).
In some states, several regulations have been put in place to remove some government policies on various foreign investments and local labor. For example, Multilateral Agreement on Investment was a treaty used to remove such regulations after consultations with the concerned states and the World Development Movement in the year 1999 (Paul, p. 27). The number of countries involved in the MIA treaty had reached 29, meaning that such government regulations would be stopped in all those countries. This is a way used by multinational corporations to rule the globe by removing the existing government policies and regulations. As much as these organizations contribute to immense growth in the various countries in which they operate, their impact on the economy, political culture, and policies cannot be overlooked. A reduction in the power of multinational corporations can be quite difficult to achieve since, over the years, these companies have extended their territories to cover most parts of the world. The issue to be sorted is the fact that they are gaining much power over their states every day (Spero and Hart, p. 73).
Multinational corporations as the world’s new governments
After a closer look at the dealings of multinational corporations, one can see that they are rapidly replacing various forms of governments and democracies. In some countries all over the world, MNCs are controlling even the legislatures, an act that can be detrimental to the democracy of a country. A new World order seems to be taking shape around the globe with multiple corporations taking over states and governing the nations. These corporations usually gain a lot of profits and turn over and they used it as a weapon to buy governments and legislatures especially in this 21st century (Diehl, p. 52). The world has since ceased to be protective of its ethics, morals, or spiritual well-being rather; it has become a survival place where individuals and business entities want to rule the world. Multinational corporations use corruption to bribe various presidents, heads of states, and other legislators. After bribing them and creating a safe nest for their operations, they continue to make enormous profits while taking advantage of low labor costs in the countries where they operate. In most states and nations, the United States of America included, the congressional representatives are usually on the side of the multinational corporations such that these companies control them. In this essence, the heads of state, legislatures, congressional representatives, and presidents usually start following the wills and wishes of these companies (Clapp and Fuchs, p. 58).
Another way that multinational corporations use to control the governments is to get involved in electoral processes. The support of multinational corporations is vital in electing presidents, in the countries where they operate since their support or failure to support, may lead to the president’s success or failure in the elections. The problem comes when the government chooses the will of the multinational corporations instead of that of its population. This shows that the corporations do not keep the state’s interests at the forefront of their objectives when venturing into new states. They just want to feel in control of the state and all of its citizens (Fratianni, Savona, and Kirton, p. 69).
The problem lies in the fact that the fate of citizens now lies with the multinational corporations since they would want to abolish democracy and all legislative processes of many nations across the globe. This is the point where one may conclude that ethics and morals seem to be diminishing each day due to the relaxing efforts to fight corruption caused by bribery going on in these multinational corporations. Various vices such as wars and conflicts around the globe seem to be caused by these multinational corporations while taking advantage of the states that they control. For example, one may find that the United States continues to outsource millions of jobs to people from Asia yet many people in the country would be glad to take up those jobs. This is usually due to laxity on the part of the government since it offers no support for its citizen in such circumstances. Thus, it can be seen that multinational corporations are now ruling the citizens either directly or indirectly. The issue of corruption seems to affect every nation where these corporations have their subsidiaries or branches since they are quite a large force to counter (Barry and Keith, p. 49).
When the parent multinational corporation starts businesses in other countries, it denies the people of its own country a chance to get jobs and extend those jobs elsewhere in a different country. Sometimes one may feel that there exists a struggle between people and corporations, and if the multinational corporations win this battle, the democracy will be abolished. Multinational corporations can thoroughly affect democratic states in case these companies win the battle. The US economy may be larger than every other multinational corporation in the world may and, therefore, the issue of MNCs ruling the world is usually inclined towards the developing states such as Nigeria. The status of the global economy can be said to consist of many developing countries that are applicable in this sense (Diehl, p. 83). Most of these countries that are ruled by multinational corporations are African countries since their economies are still relatively low as compared to the developed world. In most of these third-world countries, the brands of these multinational companies exercise a form of control over their customers by the use of brands. This form of control can be seen in the way the brands are forced onto the market by a way of coercing the customers to buy a certain product. Business entities are expected to be subservient to their customers, but, in most cases, multinational companies tend to take total control of customers through the power portrayed by the brand (Mattli, p. 45).
Multinational corporations found all over the world take control over the customers, countries, and workers and exploit them in various ways. A strong example of the way these multinational corporations exploit their people is the way some transnational corporations continue to exploit Chinese workers under the shadow of helping them (Baratta, p. 72). The problem with the power that is associated with multinational corporations is that they continue to control states and nations in an uncountable manner. This leads to making these multinational corporations dominate most of the political processes that come up in different parts of the world.
When multinational corporations rule the world, many problems could occur among the nations. As they strive to offer a global economy, these multinational corporations end up increasing the gap between the rich and the poor while still destroying the environment. The main problem with the competition between governments and multinational corporations is the fact that MNCs are favored just because they can operate anywhere, unlike governments that are bound by boundaries (Wettstein, p. 36). This advantage allows the multinational corporations to take advantage of globalization in a bid to penetrate the best markets and plan their assets and other facilities, as they would want. The owners of these multinational corporations always understand the need to play around with various governments while trying to find the best markets for their economic activities (Rudman, p. 69).
The MNCs have always tried their best to star in their profits regardless of the means used, and these pose a danger to countries where they operate. They focus too much on their main goal (making the most profit) while down treading on moral and ethical values of the people in that country. When these multinational corporations interfere with the electoral process, it means that people’s votes do not matter since the corporations continue to make decisions instead of the government. In addition, the multinational corporations’ failure to offer morality and ethical grounds for a country remains a tormenting issue across the globe. This is because the moral and ethical perspectives of their operations would indeed assist in protecting the planet as a whole (Lopes 54).
Those who argue against the claim Tolentino 64, felt that the state is already more powerful than ever and that such a claim that multinational corporations can shape the world can be termed as a wrong judgment when it comes to the new world order. He feels that regardless of the immense influences, the MNCs can never rule the world since these business entities still need the government in various areas. For example, no matter what happens, the corporations would need the government to offer a conducive environment for their operations in different parts of the world. In addition, in most cases, governments and legislature need to be involved in providing various services such as repressive functions and military supports. Thus, while multinational corporations continue to influence many aspects of countries, customers, workers, and politics, some people feel that government action has to be used at one point or the other. This view that multinational corporations do not rule the world fails to hold any water since the above points about how it rules the world seem to be more than the given explanation. The support for the claim seems to gain more points and, therefore, the claim is valid since multinational corporations continue to rule the world (Pearce 67).
Yes, Robert cox was right: multinational corporations rule the world. As seen in most multinational corporations such as Coca-cola or Shell around the globe, there is a connection between the business entities and economic and political aspects of a country. The corporate power among nations has been transformed and it seems that the world is taking a different turn. The above points seem to support the argument since multinational corporations have led to various governmental replacements in the countries that they operate around the globe. Capitalism can be seen to be an element of globalization that affects the changing world order significantly.
The activities carried out by the nation or state remain overshadowed by the new multinational companies. Multinational corporations are among the top drivers of globalization due to their involvement in the industrialization of various countries across the globe. Thus, one can conclude that multinational corporations are steadily going global in quite a powerful way since they are even dominating the world of politics. In some states, several rules and policies have been put in place to remove some government policies on various foreign investments and local labor. In some countries all over the world, MNCs are controlling even the legislatures, an act that can be detrimental to the democracy of a country. A new World order seems to be taking shape around the globe with multiple corporations taking over states and governing the nations. When multinational corporations rule the world, many problems could occur among the nations. As they strive to offer a global economy, these multinational corporations end up increasing the space between the rich and the poor while still destroying the environment.
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