MNC Vs Mncs

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The dramatic acceleration of globalisation has been a central feature of world politics in recent decades. Subsequently, the concept of the nation-state becomes less vivid, while new actors such as multinational corporations (MNCs) become more important and influential on the international stage. MNCs are a direct creation of globalisation. The annual sales of these MNCs can exceed the annual gross domestic product of many nations, which suggests that such corporations could indeed be considered actors in the international system in the same way as nations (Brinkman and Brinkman, 2008). This essay aims to assess whether, in the era of globalisation, MNCs are more powerful than nation-states. Firstly this essay will define MNCs and consider the power they hold. This essay will also consider in what ways MNCs are similar to and differ from nation states. Finally this essay will determine whether the power held by MNCs is equivocal or more than that held by nation-states.
Multinational corporations play a captious role in the global economy. Production by MNCs accounts for over one-fourth of the world’s output and over one third of the worlds’ trade (Ritzer, 2011). For the purpose of this essay, a MNC is defined as a cross-border business enterprise which owns and controls income generating assets in more than one country (Tang, 2008). Well recognised examples include Shell, McDonalds, IMB, General Motors, etc. The main aim of these entities is profit and growth. MNCs have emerged due to structural and inherent market imperfections such as unstable exchange rates, restrictions on imports, marketing and distribution costs, excise duties and subsidies and they have grown promptly due to economies of scale and because of their burst t...

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...to develop in the future as the stakes get higher. Due to the virtue of MNCs goals, humanity needs to question whether they can afford to nominate MNCs with the responsibility to be the key actor on the international stage. The activities of MNCs are likely to have future repercussions on culture, society and environment. Some argue that more measures should be put in place to reduce MNCs power, however with MNCs are already undermining sovereignty perhaps the most effective solution would be to strengthen the status of the nation-state (Ku and Yoo, 2013). In conclusion, in the era of globalisation it is clear that MNCs are more powerful than nation states. Not only do MNCs share equivocal power in terms of economic and resource control, marketing and loyalties but MNCs have the power to influence nation’s political decisions which in turn makes them more powerful.

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