4.4.3 Controlling MNCs Flashcards Preview

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Flashcards in 4.4.3 Controlling MNCs Deck (15)
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1
Q

4 ways governments can control MNCs

A
  • legal control
  • political influence
  • pressure groups
  • social media
2
Q

what is legal control

A
  • regulations, laws and policies
3
Q

what are competition policies

A
  • exists to promote competition and ensure that markets run as efficiently as possible
  • dominant firms cannot use strategies to drive out competition
4
Q

what is a taxation policy

A
  • policies about the amount of tax businesses must pay when they operate in a country
    e.g. Ireland have a policy of low corporation tax to attract FDI
5
Q

what are the benefits of legal control

A

+ used to improve competition and innovation through competition policies
+ quick to enforce and our binding with fines
+ facilitates consumer protection

6
Q

what are the drawbacks of legal control?

A
  • there is a lack in consistency in laws so MNCs will find the most friendly legal environment
  • MNCs have great power
  • MNCs become “footloose” and move to more favourable locations
  • facilities corruption
  • laws are often not easy to enforce
7
Q

what is political influence

A
  • governments applying pressure for MNCs to make changes
  • state-owned businesses can be easily controlled by the government and can give the government a chance to control the behaviour of other MNCs in the market
8
Q

benefits of political influence

A
  • this pressure applied by the government makes MNCs conscious of approval from their host nation to make operations smoother
9
Q

drawbacks of political influence

A
  • politicians can be bribed
  • MNCs may have more power than the government due to the benefits the MNC brings to the country so unethical behaviour may be ignored
10
Q

what are pressure groups

A
  • groups of people who want change in government policies or business behaviour
  • methods like naming and shaming and sit-ins and strikes are often used
11
Q

benefits of pressure groups

A

+ with the use of social media activists gain quick traction
+ committed volunteers
+ raises issues to public, authorities and politicians

12
Q

drawbacks of pressure groups

A
  • direct action (strikes and protests etc.) can lead to violence or negative image of the pressure group
    -MNCs status and brand may over power the pressure group
  • information can go “viral” and not be long lasting
13
Q

what is social media

A

the interaction of people over websites and applications that allow people to share and create content

14
Q

benefits of social media

A
  • information can be widespread quickly which gives the public power
15
Q

drawbacks of social media

A
  • when something goes “viral” it becomes harder to control the intended message