Lecture notes 3.4.3 Controlling MNC’s

3.4.3 Controlling MNC’s

 Factors to consider
o Political influence
 Regulation
 Ensure that the firm is being monitored on its actions
 Laws about waste or environmental damage
 Tariffs
 Quotas
 Subsidies
o Allow domestic firms to compete with MNC
o Legal control
 More effective in a developed country
 Government is less likely to be corrupt and will be a bigger influence
 Employee legislation
 Minimum wage

 Required breaks
 Maximum shift hours per day
o Pressure groups
 Independent 3rd parties which force MNC’s to do the right thing
 Greenpeace
o Protest
o Boycott
o Social media
 Facebook/Twitter enables us to live in an information age and encourages
consumer sovereignty
 Global reach
 Powerful way to raise awareness
o Self-regulation
 A firm monitors its own behaviour regarding ethical or legal standards.
 Act ethically to preserve reputation
 More effective if the laws are weak or missing
 Used mostly in developing countries
 Profit maximisation could harm this