Assignment Sample on Multinational Corporations
1. Introduction
Power resources are one of the important factors for the local government and multinational corporations. Based on this, both entities get the opportunity to enhance their efficiency and performance. Also it helps to increase the pertinent of the organization in an efficient manner. Therefore, it can be stated that based on this resources, Multinational Corporation and States government get the chance to enhance the wellbeing of the individuals and quality of life as well. This assignment will shed light on identifying the power resources pertinent to the States’ and multinational corporations’ bargaining connection and its impact on the both entities. The “lifespan theory of sustainable finance” and the “priority theory of sustainable finance” are going to be illustrated in this report for ensuring sustainable financial investment.
2. Identify and outline power resources pertinent to the States-MNC bargaining relationship
The connection between multinational corporations and local or state governments regarding the resources of power and foreign direct investment are becoming the most essential topic in the Global. As per the views of Dicken (2007), geographical economy, school of development and people wellbeing are the main factors for the power resources. Based on this local governments and Multinational corporations are trying to enhance their efficiency in an effective manner which helps to increase their efficiency as well. It is highly essential because most of the countries have incorporated policies of decentralization. It has outcomes in many numerous stages of government now being associated with organising or highly managing the foreign direct investment with the starting procedure between Multinational Corporation and States government being unavoidable to make sure the advantages of the foreign direct investment flow to the citizens of local in the respective country. Therefore, the significant contributions of foreign direct investment to the development remain more ambiguous.
On the other hand, foreign direct investment has the ability that it can enhance growth of the economy of the host country or respective countries that will assist to enhance the quality of the life of the individual of the respective country or the host country. The primary determinants of the availability of electricity resources are the regional economy, schools of development, and human welfare. On the basis of this, local governments and multinational corporations work to improve their efficiency in a way that contributes to overall efficiency growth. It is absolutely necessary because decentralisation policies are present in the majority of the world’s nations. With the beginning process between multinational corporations and States government being necessary to ensure that the benefits of the foreign direct investment flow to the local citizens in the respective country, it has resulted in many numerous stages of government now being associated with organising or highly managing the foreign direct investment. As opined by Ozili (2022), the “priority theory of sustainable finance” refers to the relevant financial contribution of an organisation at a particular time. Implementation of this theory can be effective for making a successful foreign direct investment and achieving sustainable financial goals. Therefore, it is still unclear to what extent foreign direct investment has contributed significantly to the development. On the other hand, foreign direct investment has the potential to boost economic development in the host country or relevant countries, which will help improve the living standard for those countries or the host country.
3. Critically assess the main power resources relevant to the bargaining relationship between States and multinational corporation
3.1 What resources do States have that MNCs want? Conversely what resources do MNCs have that states want?
As stated by Chowdhury and Chakraborty (2021), a multinational corporation always wants a cheaper labour and make sure that they provide best skills and knowledge to achieve the organizational objective in an efficient manner. Based on this, the management team of the multinational corporation gets the opportunity to increase the profitability of the company in an effective way. Apart from this, the security of energy is one of the most essential resources for the Multinational Corporation of the oil industry. On a similar note, raw materials also is one of the essential resources for the Multinational corporation which helps to reduce the cost of the transportation and it helps the company to generate more revenue streamlining. Also, companies get the opportunity to enhance their supply chain management system as well which helps improve the logistics as well. On the other hand, flexible working and robust rules and regulations helps to provide the high motivation to the employees and it helps to increase the productivity of the staff members of the multinational corporation.
Based on the all resources, it can be stated that local government or the states government wants the cheap rate of employees who give their best skills and knowledge to gain the goals of the organisation in an efficient manner. Aside from this, one of the most important resources for the state government of the oil industry is energy security. In a similar vein, raw materials are one of the key resources for state governments, which lower the cost of transportation and increases revenue streamlining for businesses. Additionally, businesses have the chance to strengthen their supply chain management system, which contributes to better logistics. On the other hand, flexible scheduling and strict rules and regulations help to boost employee enthusiasm and raise the output of state government personnel.
3.2 How can States use their resources to exert power over MNCs and vice versa?
As opined by Osabohien et al. (2019), cheap rate of employees gives the opportunity or the benefits to the states government to improve the GDP of the country in an efficient manner. Based on the available information, it can be concluded that local governments and state governments prefer to pay low wages to workers who contribute their best abilities and expertise to achieving the organization’s objectives effectively. In addition to this, energy security is one of the most crucial resources for the state government of the oil sector. Similar to how raw materials are one of the most important resources for state governments, which reduces transportation costs and improves revenue streamlining for businesses. Businesses also have the ability to improve their supply chain management system, which helps with logistics. The output of state government employees is increased by flexible scheduling and tight rules and regulations. On the other hand, selling market is the thing that is used by the multinational corporations and the State government to try to use it efficient way. It helps increase the profitability of the government and helps to boost the GDP in an effective way. Selling markets is another tool that multinational firms and state governments use to try to make the most of it. It effectively raises the GDP and aids in boosting the government’s profitability.
3.3 Under what circumstances do these resources generate the most power?
Multinational corporations (MNCs) and nations have complicated power relationships that can change considerably based on a number of variables. But for certain reasons, some nations are more likely to have more control over MNCs than others. As opined by Brennan and Vecchi (2021), states with substantial economies and worldwide clout are more likely to control MNCs. According to the study of Liu et al. (2021), the lifespan theory of sustainable finance elaborates on the difference between secondary and primary control including spending habits. application of this theory helps in maintaining smooth consumption in both situations when income is high or low.
3.3.1 Which States are likely to have the most power in this regard and why?
The global market is significantly impacted by nations like the United States, China, Japan, Germany, and other large economies. These nations can use the size of their markets as leverage to affect the operations and choices of MNCs. States that have strong and strict regulatory frameworks are better able to oversee multinational corporations (MNCs) operating inside their boundaries. These states can influence MNCs’ commercial practices, environmental standards, labour rights, and taxation by enacting laws and regulations in these areas (Kourula et al. 2019). States tend to have more influence over MNCs when their political situations are stable. Political stability offers predictability and lowers the possibility of abrupt policy shifts or instability that can have an impact on the operations of MNCs.
Natural resource-rich nations can exert influence over MNCs through their strategic importance and abundance (Redmond and Nasir, 2020). These nations may have considerable negotiating influence over businesses that depend on essential resources like oil, minerals, or rare earth metals thanks to their access to these resources. States with a dominant role in international geopolitics may have more sway over MNCs. As opined by Li et al. (2022), decisions about international commerce and investment, for instance, might be influenced by nations that act as important trade centres or that are strategically important. It’s crucial to remember that the power relationships between governments and MNCs are dynamic and susceptible to shifts in the political, economic, and technical environments. Additionally, the power connection may be reciprocal since MNCs, particularly those with significant resources and a worldwide presence, can influence nations by taking use of their economic potential and providing chances for investments and employment.
3.4 What constraints do States and MNCs face in their bargaining relationship?
In the bargaining procedure, the connection between the local government or states government and the multinational is conditioned by the both entities power to identify or assessed the distribution of the foreign direct investment costs and advantages. Therefore, it is still unclear to what extent foreign direct investment has contributed significantly to the development. On the other hand, foreign direct investment has the potential to boost economic development in the host country or relevant countries, which will help to improve the standard of living for people living in those countries or the host country. As suggested by Dicken (2007), the local economy, development trends, and welfare of people are the main factors of the availability of power supplies. On the basis of this, regional authorities and multinational businesses aim to increase their efficiency in a way that supports an increase in efficiency as a whole. Decentralisation policies are present in the majority of the nations in the world, hence it is vitally required. Due to the necessity of the initial process between multinational corporations and States government to ensure that the benefits of the foreign direct investment flow to the local citizens in the respective country, many different levels of government are now involved in organising or highly managing the foreign direct investment. Thus, it is yet unknown how much foreign direct investment has significantly influenced the development. Foreign direct investment, on the other hand, has the ability to accelerate economic growth in the host nation or other pertinent nations, which will serve to raise the standard of living for citizens of both the host nation and the relevant nations.
3.5 Does the power of States and MNCs vary over time?
The power of states and different MNCs has varied over time with the increased level of competition in the market. This will have a negative impact on the overall economic perspective of the nation. It can be ensured that during the time of emergency, the power level of different states and multinational organizations are effectively varied which can be considered to ensure the effective approaches. As opined by Olson et al. (2021), finding out the power metrics between two important elements is the most significant perspective to ensure the overall controlling process. In this context, the business organizations have the responsibility to deal with individual responsible bodies of different states. These will be supportive factors to enhance the overall business process and develop the overall economy. It will be most effective technique to deliver the best possible solutions and strengthen the overall economy of the country. With changing technology and market trends, the power is varied significantly based on which MNCs are able to enhance their operational efficiency. As opined by Dang et al. (2020), significant way of delivering business process and enhancing the overall operational procedure could be supportive tactics to deliver the best possible elements. This will further support in developing the business process and managing the overall business perspective.
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Conclusion
The relationship between local or state governments and multinational firms with regard to power resources and foreign direct investment is quickly overtaking other global issues as being of utmost importance. The primary determinants of the availability of electricity resources are the regional economy, schools of development, and human welfare. On the basis of this, local governments and multinational corporations work to improve their efficiency in a way that contributes to overall efficiency growth. It is absolutely necessary because decentralization policies are present in the majority of the world’s nations. The state government has the ability or advantages due to the low cost of labour to effectively raise the GDP of the nation. Based on the evidence at hand, it can be deduced that local and state governments prefer to pay low wages to employees who give their best skills and knowledge to successfully fulfilling the organization’s goals. Additionally, one of the most important resources for the state government of the oil industry is energy security. In a manner similar to how raw materials are one of the most crucial resources for state governments, lowering transportation costs and enhancing corporate income efficiency. Businesses can also enhance the logistics support provided by their supply chain management system.
References
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Dang, Q.T., Jasovska, P. and Rammal, H.G., 2020. International business-government relations: The risk management strategies of MNEs in emerging economies. Journal of World Business, 55(1), p.101042.
Dicken, P., 2007. Global shift: Mapping the changing contours of the world economy. SAGE Publications Ltd.
Kourula, A., Moon, J., Salles-Djelic, M.L. and Wickert, C., 2019. New roles of government in the governance of business conduct: Implications for management and organizational research. Organization Studies, 40(8), pp.1101-1123.
Li, J., Van Assche, A., Li, L. and Qian, G., 2022. Foreign direct investment along the Belt and Road: A political economy perspective. Journal of International Business Studies, 53(5), pp.902-919.
Liu, Z., Venkatesh, S., Murphy, S.E. and Riggio, R.E., 2021. Leader development across the lifespan: A dynamic experiences-grounded approach. The Leadership Quarterly, 32(5), p.101382.
Olson, E.M., Olson, K.M., Czaplewski, A.J. and Key, T.M., 2021. Business strategy and the management of digital marketing. Business horizons, 64(2), pp.285-293.
Osabohien, R., Matthew, O., Gershon, O., Ogunbiyi, T. and Nwosu, E., 2019. Agriculture development, employment generation and poverty reduction in West Africa. The Open Agriculture Journal, 13(1).
Ozili, P.K., 2022. Theories of sustainable finance. Managing Global Transitions, March.
Redmond, T. and Nasir, M.A., 2020. Role of natural resource abundance, international trade and financial development in the economic development of selected countries. Resources Policy, 66, p.101591.
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