4.4.3 Controlling MNCs

• • MEDCs benefit from profits of MNCs, these firms carry significant political influence on government policy.
  • LEDCs often have key decision makers (autocratic rulers) who receive payment for access to the country’s resources.
  • Important to control the activities of MNCs to enhance the benefits and reduce the disadvantages of what they offer.
• Social Media

  • MNCs can use social media to spread awareness and promote their business on a global scale.
  • However, social media enables stakeholders to freely share information about the unethical behaviour of MNCs.
  • MNCs are forced to address the issues raised on social media - there is a high level of public exposure and information can spread rapidly.
• MNC influence on social media may be limited in some countries as they have regulations in place to manage social media power
• • Pressure groups are organisations that operate to influence company and public policy in the interest of a particular cause.
• Pressure groups

  • Pressure groups can take action in different forms:
  • Naming and shaming
  • Direct action
  • Lobbying - taking issues directly to the government.
• Legal control


  • Governments enforce legislation and regulation to control operations of MNCs.
  • EU has the Competition Commission, which protects producers and consumers from anti-competitive or unfair practices.
• Legal control


  • Governments want to attract MNCs to boost their economy, so creating legal control in areas relating to taxes and employment ensures stability for the MNC.
• Political influence


  • When MNCs establish themselves in a new country, they must work within the  institutional framework of that country.
  • MNCs in developed countries are able to exert pressure on national governments through lobbying to create favourable conditions for their business.
  • politicians may occupy roles on board of directors for MNC after retiring in return for reducing political control on the MNC whilst they are in power.
  • MNCs in developing countries can influence governments as they may establish deals which are beneficial to politicians (bribes)