The rise of multinational corporations

During the latter years the governmental prerogatives and the nation-state sovereignty seemed to be threatening by the rise of multinational corporations (MNCs). 

MNCs are significant parties in the international system, despite of they do not count with certain characteristics, that governments absolutely have like independent, territorial definition and sovereignty, but their international influences really concern. However government and social groups have put MNCs in a place where they can do community services, basically when they assumed basic governance functions and responsibilities in response to external pressures.

The foreign direct investment may foreign companies far more deeply into host economies; giving MNC’s a greater and better impact on domestic production, employment and other socioeconomic indicators. Because of the use of subsidiaries, they also a relationship with this entities and their impact on national interests, increasing the relation with countries’ sovereignty

Traditional multinational corporations have evolved into transnational corps (TNC’s), with some moving toward a global corporation concept. These include substantial changes in business interests, strategies and operations. As MNC’s become more diverse and diffuse, are less restricted by the political limitations of state boundaries. Changes in relationships between nation-states and MNC’s rely in a broader system described by concepts such as interdependence and globalization.

MNC’s made strategic transformations that reduced their potential challenges to national governments, and through decentralized and dispersed operations, it would limit a total control of a central MNC headquarters, this could help to narrow territorial ties and commitments to states.

MNCs as levers: corporations are bounded to human rights and labor relations, due to that civil society use MNC’s as levers for change in their country.

MNCs as surrogates: when MNC’s provide a range of public services in local communities primarily in poorer developing countries, taking some governmental work.

Question

As a legal organizational model, how does the rise of corporations influence the aspects of culture in pursuing profit?

The rise of MNCs produced a big impact in national cultures, because those corporations that crossed borders, it is supposed that they are not related territorially, politically or culturally to a specific type of country or land, so that their coming into a place, the way the handle their business, they way manage people maybe it does not agree on the customs, manners, and citizens profiles, due to this it could affect the welfare of a certain group of people in country.

On the other hand, those MNCs that are really aware and with cultural knowledge of countries’ situations and issues could indeed improve many cultural and economic aspects. This has been demonstrated for several companies that have taken many basic government responsibilities, most of them related to favor the community. That’s why MNCs are one of the most important actors in the international system, and good, profitable, and constant relations between those and government would lead a development for the world citizens.

1) Image took from: http://trashi.lacoctelera.net

2) image took from: http://www.brookhavencollege.edu

3) Corporation definition. Retrieved from: http://www.investorwords.com/1140/corporation.html

4) La empresa como psicópata. Retrieved from: http://trashi.lacoctelera.net/post/2005/05/14/la-empresa-como-psicopata