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Theme 4, Part 4- Multinational Corporations (MNC's) - Coggle Diagram
Theme 4, Part 4- Multinational Corporations (MNC's)
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Controlling MNC's
Why control MNC's
- safety concerns- factory safety, unsafe equipment, working conditions in less developed countries
- mineral extraction- if a MNC has gone to a country to extract rare minerals, it's very important the host country that has provided those materials receives an appropriate reward for it
- weakening local cultures- selling foreign products to new markets, changing their lifestyles/ habits, leading to a change in tradition/ culture
- lack of commitment to the host country- MNC's have less of a connection and commitment to a host country compared to their home country meaning they could leave at any time and cause mass unemployment to the host country
Political influence
- Lobbying= when individuals, businesses, trade unions, groups, or charities try to get the government to change its policies
- wealthy MNC's can have significant influence over politicians which can lead to:
- granting licences to extract raw materials
- tax breaks
- overlooking times when the MNC didn't meet certain regulations
Legal control
- very powerful as all businesses have to abide by them
- can introduce laws about pollution, minimum wage and the MNC will HAVE to adapt their business to follow these laws
- however, an MNC may just move to a new host country with less strict laws
Pressure groups
- pressure groups are formed by a group of people who all share an interest in a cause or changing the behaviour of a business
- the power of pressure groups depends on their size
- they can influence government and legislation if they're big and powerful enough
- protests, customer boycotts, damages the MNC's sales and revenues
- boycott= a group agreement to stop buying from a certain business usually to show disapproval of how the business is acting
Social media
- massive reach, potentially global
- can create wide disapproval of a business forcing them to change their ways
- however because of how quickly information can spread it has the potential to cause national panic