We live in a world today that is somewhat dominated by capitalism and consumerism, and so we rely heavily on MNCs and the products they produce to go by our daily lives, with products such as gas, food products, clothing, etc. Looking at the top 25 MNCs that are more powerful than many countries, mentioned according to Foreign Policy, you see Walmart as the top company. I personally visit Walmart at least twice weekly because of its convenient location and prices, and I suspect thousands of others do so too. So how is it that an MNC or a company, that is a retailer, becomes stronger, or more powerful, than several other countries? Would such a scary phenomena change the world indefinitely?

Parag Khanna makes an interesting argument that sovereignty and government laws are not the only thing that matters anymore, but we are mostly more controlled by supply and demand, which indicates that the power of globalization and capitalism has shifted power from countries to MNCs. And the reason is, because of that, some MNCs, such as Apple and Walmart, are worth more than some countries. For example, Khanna mentions that “the cash that Apple has on hand exceeds the GDPs of two-thirds of the world’s countries” (Khanna, 2016). Moreover, MNCs do not only gain power because of its consumers, but because of their political agenda. For example, Google, in 2017, spent around US$18 million lobbying politicians and lawmakers, which got them to be the number one lobbyer in the world (Green, 2018). Therefore, it is not exactly just an economic factor that strengthens MNCs, but political ones as well.

My question here is, should we be worried about such a phenomena? Is it okay for us to be living somewhere and know that MNCs have more power than such country? Are MNCs taking over the world? Again, I raise the importance of the rise of globalization, and how it is affecting all of us daily. Globalization has paved the way for capitalism, and the rise of capitalism has made it very easy for MNCs to climb the ladder of power. Corporations are becoming more central players in global affairs, and are getting more involved politically, rather than just economically. If MNCs are able to lobby politicians, and one company can have more money than the GDP of two-thirds of the world combined, then they have enough power to take over the world. MNCs are already becoming stateless, so is it possible that at one point, us – citizens – become stateless, or have our laws put by MNCs?

References:

Green, A. (2018, September 18). Are multinationals now more powerful than the nation state?). ‘ Retrieved from https://www.spectator.com.au/2018/09/are-multinationals-now-more-powerful-than-the-nation-state/

Khanna, P., & Francis, D. (2016, March 15). These 25 Companies Are More Powerful Than Many Countries. Retrieved from https://foreignpolicy.com/2016/03/15/these-25-companies-are-more-powerful-than-many-countries-multinational-corporate-wealth-power/

Throughout the whole term, we’ve been talking religiously on what MNCs were and how they started, and what they’re doing to the world. Multinational corporations are not just private business actors, but also became a big part of overall global governance. This has resulted in making them not only economic actors, but also political. (1). We seem to have this understanding that for most multinational corporations, profit is the main motive and key, and so putting business stakeholders first. However, it is important to understand that this expectation we have of MNCs are “socially shared expectations” (11). However, with CSR, new expectations have risen, leading to my thoughts about the article. To be fair, before reading this article, the opinion that has been formed in my head was that MNCs only care about profit, and nothing else.

The authors of the article, however, have concluded a different argument. Instead of thinking of corporations in this rational way, why not think there is more to them than profit and selfish behaviour, stating that “MNEs are influenced by emerging norms as ideational aspects of social interaction instead of static rationality” (20). What they mean by this is that CSR practices are, in fact, taken seriously within corporations, and that includes the social responsibility being given to them through the emergence of norms, and basic social interaction.

I would be lying if I said this article did not – slightly – change my mind on motives of CSR practices within MNCs. It still baffles me how MNCs in this capitalist, globalized world, would care about anything else other than the profit they get out of consumerist practices. But I guess as Political Science and IR students, we should keep our minds open, and maybe welcome other ideas. The article was very well put, because it did outline some different arguments that could appear, and their answer to it, such as the public relations idea mentioned. For an MNC to fully announce that they will be involved in CSR practices comes great responsibility, and so if they do not follow this statement, they will receive backlash.

With that being said, I still believe that MNCs have a long way to go when it comes to bettering their practices, and making them more ethical. There are problems and scandals that arise daily from companies being caught being unethical (after claiming they were). I’m keeping an open mind, and I believe there is hope. But there is also a long road ahead for the authors’ arguments to be 100% true.

References:

Matthias Hofferberth et. al. (2011)“Multinational Enterprises as “Social Actors”—Constructivist Explanations for Corporate Social Responsibility”Global Society25, 2: 205-226