What Are the Sources and Limits of Mnc Power

1627 Words Mar 18th, 2014 7 Pages
What are the sources and limits of MNC power?
Multinational Corporations in a Global Economy
IR 120 - 201136597 - Catharina Knobloch

1. Introduction

As MNCs are getting increasingly important as actors in political bargaining, the purpose of this essay is to provide a (more or less) detailed overview over the sources and limits of the power of multinational corporations (MNCs).
In the first section, I am going to lead into this topic by giving some definitions. In addition to that, I am also going to explain the role of MNCs in the international governance based on the typology of regime types. Then I am going to examine the most important sources and forms of business power, before taking into account the limits and the
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I think that it is of essential importance to give a definition of the concept of power. ‘Power’ in the international context has a multidimensional essence. A state might possess military, diplomatic, political or economic power. All of these refer to the ability to influence the course of action in one way or another. Considering these aspects of power, a multinational corporation is most likely to hold economic and probably, to a certain extent, political powers.
To explain why MNCs are important for the world’s development, I want to point out that MNCs can in fact help countries by transferring technology and modern professional management. Another important factor is that they gain money through employment and investment. So they have served as an engine of growth in many host countries. This is also why particularly developing countries are to a large extent dependent upon them economically. Nevertheless, MNCs can also have negative impacts, because they can be responsible for pollution or human rights abuse, as they are exploiting cheap local labour in developing countries.Moreover I would like to point out, that MNCs from different sectors and with different competitive positions rarely speak in unison on issues of supranational governance. Besides, it can

generally be said that MNCs tend to support the creation of markets enabling regimes at the international level, and, if are under pressure, to approve
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