3.4.3 Controlling MNC's

Question 1

How are MNC’s controlled?

Answer 1

Poliitical influence
legal control
pressure groups
social media

Question 2

Explain political influence

Answer 2

Politicians can influence through non financial and financial incentives for example subsidisng.
Hosting trade events or politicians going to foreign global markets to promote UK firms/MNC’s giving the opportunity for potential mergers.
They can be controlled through protectionasim measures too.

Question 3

Explain legal control

Answer 3

MNC’s can be controlled through competitions authroitys regulating levels of competiton.
Also employee regulation ensuring MNC’s arent being exploited

Question 4

Explain self regulation

Answer 4

Self-regulation is when a firm monitors its own behaviour, especially in relation to ethical or legal standards. It could be in the interest of the firm to act ethically, especially in the short run, in order to preserve a good public reputation. In developing countries, MNC’s may self regulate as the government have little power over them and dont want to lose the MNC operating in their country as they attract great FDI flows. Hence the developing country allows the MNC to self regulate so they dont lose out on the benefits the MNC brings to their economy.