The relationship between the nature of Macs and State behaviors Conclusions References Introduction world economy at large. They have also served as an engine of growth in many host countries Macs is based on the maxim: the bigger the better. Their huge size and immense resources confer them with the ability to take world markets by storm. Not only that, their tremendous economic power places them in a position of supremacy whereby they can command political institutions and shape cultures. The conquest by Macs has evoked a great deal of controversy.
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Opinions are divided on whether he conquest is beneficial for the vast majority of the world’s population living in the less developed countries (Olds). Whether it has ushered in an era of prosperity for the world at large, or whether it has simply marked the opening of another era of colonialism for the Third World (Said, 2011). One of the most important issues states face is the growing power of the Macs at the expense of state sovereignty. Macs are more bane than a boon to state economies, recent evidence shows that foreign direct investment from Macs can help promote and sustain development in many countries.
Hence states have become reliant on Macs to integrate their economy into the global economy and to encourage development. This reliance explains in large part why Macs have gained so much power over states (Keeper, 2006). The aim of this paper is to validate the notion that Macs are increasingly influencing the nature and conduct of state behavior. The writer will be guided by two objectives namely: to explain the nature of Macs, to relate the nature of Macs to state. The central argument of this paper is that Macs – State relations vary significantly across issue areas in their interaction and outcomes.
The nature of Multinational corporations There is no agreed definition of Multinational Corporation; however different scholars have come with up different definitions. Multinational corporations according to Christofis & Smudge (2000) are a corporation that is registered in more than one country or that has operations in more than one country. While according to Root (1990) Multinational Corporation is seen as a parent company that controls a large cluster of corporations of various nationalities.
These corporations have their nature and features. This section therefore will focus on the nature of Macs. Multinational reparations can be viewed either as independent actors operating in the interstices of state-to-state relations or as an instrument of foreign policy of states within which the parent companies are located. Their sensitivity to global activities makes them adaptive to new policy environments (Walters, 1972). For example Before the asses, environmental regulation in India was almost non-existent.
In pursuit of economic development, the Government of India kept environmental regulation of multinational corporations to a minimum in order to attract foreign direct investment, hence through this the Macs take advantage to control state behavior Ban, 2010). According to Gout & Killable (1994) Macs capitalize on uncertainties such as volatile exchange rates, take advantage of time dependence by investing in two plants in different geographical localities and create managerial practices, this means that Macs invest where they can maximize profits.
For instance the Chinese Macs have had competitive political advantage, which is guided by their foreign policy which states non-interference in domestic affairs, making China to invest in Pariah state and take advantage of influencing the states conduct, I. E. Sudan (Alden & traceries to take advantage of changing state policies, also means that investment can be very unpredictable, that is Macs may quickly do an about face, pulling out investment in one state and investing in another (Stafford, 1999).
For example during the civil wars in Africa, some multinational corporations that have not been dealing with fire arms and other weapons that can be used for wars stay while others that deal with things like oil extraction and mining can withdraw, for instance in Chad during the war in the sass’s and 1995, Macs dealing with oil extraction withdrew cause of the war environment which made investment impossible (Dormant, 2003).
Macs have a tendency to frustrate state economic planning, threatening states ability to effectively pursue national economic and political goals through such standard devices as fiscal policy, monetary policy, investment controls among others (Walters, 1972). ). For example Macs in DRY have not played any positive role to help change the situation in DRY yet they as so many companies, instead most of them fund the rebels to ensure that conflict stays on and this frustrates the state economic landing and also threatens states ability to pursue national economic and political goals (Bennett, 2002).
The following section therefore focuses on the relationship between the nature of Macs and state behavior. The relationship between the nature of Macs and State behavior Blumenthal notes that; the state is a combination or association of men in the form of Government and governed, on a definite territory, united together into a moral organized masculine personality, more shortly person of definite territory. Syncs have been able to exert great power thereby affecting the sovereignty of the state wrought a variety of means.
For instance, the ability of Macs to generate employment, improve the productivity of a state through greater inflow of investment, enable transfer of technology and help the overall health of a state has had a large effect on states and their ability to exercise supreme political authority. For example, in 2002, about 64,000 Macs with a Foreign Direct Investment stock of $7 trillion, controlling one-thirds of global trade in goods and services had generated 53 million jobs. This speaks to one influence that an NC is able to create in a particular state (Raja, 2010).
Macs are uniquely equipped by the global strategies, management practices and organizations to take advantage of opportunities created by differences in state’s policies, such as different labor costs, labor laws, environmental laws, business laws and taxes (Permute, 1972). For example when faced with unfavorable conditions in a host country, Macs can threaten to shift production and future investment plans to other states, which forces states to create favorable investment policies.
For instance Kenya was recently faced with the threat of withdrawal of three mobile service providers namely Safari, Retailer and Orange companies, which arced the President to apologize and ordered the government not to interfere with the running of these companies. Paradoxically, both the extreme right and extreme left are united in their belief that Macs, with an evil intent, are infringing on national sovereignty. They view Macs to be amoral government-manipulating rent-seeking monoliths that exploit the lack of environmental regulations and cheap foreign labor in developing countries (Buchanan, 1995).
For example FEZ companies have taken governments cannot do anything about it. According to Quintal (2001) Profits are ere important to Macs, but their investment decisions are heavily deterred by the presence of economic and political corruption. A UN survey of Macs revealed that the number one reason Macs do not invest in given countries is the presence of extortion and bribery, and not surprisingly, the main source of the corruption is government officials.
Both the International Chamber of Commerce and the International Organization of Employers have established social codes and standards agreed upon by their members that attempt to discourage bribes and extortion and to establish principles for responsible environmental management. According to Patty (2006) Macs have been linked to civil war through the extraction of natural resources such as oil, natural gas, timber, diamond among others. These Macs have played a key role in war ton societies by influencing the conduct of states in several ways.
For instance oil corporations in Sudan have long been connected to the recently ended North -South civil war between the government of Sudan (ASS) and the Sudanese People Liberation Army (SPLASH). This was in an effort to control the natural resources by the Macs. This kind of scenario is also similar in DRY Congo and other African countries with rich natural resources. Moran (2006) notes that Macs pervert or subverts host countries political process by using influence of their home countries to bring pressure to keep the host government in line.
This is true for many Macs in Africa especially the countries that have experienced conflict and are vulnerable. Such countries as Sudan, DRY Congo, and Chad among other have experienced pressure from the home countries of the Macs. A case in point is DRY Congo which has had new partners from South Africa and China who have their own interest hence use the home countries to put pressure on DRY Congo state so as to achieve their economic interests. Macs can pursue non – market Political activities that help them achieve their goals of efficiency.
Government decisions then are a factor in Macs investment and production because they determine the profitability of an investment. Macs therefore are forced to integrate political know-how into their strategies (Brewer, 1992). In order to achieve maximum efficiency, the Macs persuade the host government to favor its investment. This persuasion can take the form of negotiation, lobbying or even outright bribes, which are concealed in order to legitimate Macs investment in a state (Keeper, 2006).
Macs can also target social groups in order to eliminate any opposition to investment; hence political means must be chosen because they are superior to traditional economic ones. They use special groups because they are often important elements in the legislative process (Malay, 2004). Bennett (2002) points that, Macs have influenced the conduct of states in conflict occurring regions through promoting peace and avoiding conflict. These Macs use leveraging skills and impact to promote stability in their areas of operations, not only because it is the right thing to do but also because it makes good equines sense.
They do this through conflict prevention, Crisis management, post conflict reconstruction and peace building. For instance SC Johnson and Stack in agricultural sector in Rwanda provided linkages between communities that were warring against each other and this led to reconciliation and peace (Davis, 2010). Conclusion They have played a key role in creating employment, bring foreign direct investment in these states and have also been active in corporate social responsibility. These Macs because of the advantage they have over states, they have influenced state behavior in both positive and negative ways.
Despite the existence of non-state actors such as the Macs, it is the state that is at the core in most parts of the world. The centrality of states continue in determining, for instance, the kind of economic policies to be adopted and the kind of economic interaction that they want to have with the rest of the world. It is therefore true that Macs have influenced the nature and character of states in both positive and negative ways and this is in line with the liberal perspective in International Relations. References Alden, C. , & Davies, M. (2006). Chinese Multinational Corporations in Africa.