Question

IPE: Has there been a "power shift" away from states and towards multinational corporations? Word Limit: 1000

Answer 1

The rapid and untramelled engulfment of economic and cultural globalization all over the world has interestengingly led to a shift in the global power dynamics away from the individual nation states to the large-scale international and multinational business organizations or companies. This entire power dynamics essentially includes various dimensions or aspects of global power such as economic power, diplomatic authority, global political dominance. The international and multinational business organizations or companies play a comprehensively influential role in the global economy thereby exercising universal economic power and its involvement in political decision making in many countries around the world pertaining to government policies mainly on industrialization and capital and business investment. The operational functioning and the economic interests of the MNCS and international organizations in different countries also influence the outcome or results of the political elections in those countries essentially implying that these organizations or companies literally can determine the political future and fortune of any country in the world based on their operational and business presence.

The economic globalization has fundamentally enabled many of the MNCs and international business organizations to enter the international market for various goods and services by gradually popularizing their respective products and services capitalizing on the rise of global consumerism. In this regard, various advertising, promotional, and marketing strategies adopted by these companies played a major role in various countries which mainly exploits and utilizes the impacts of cultural globalization to generate consumer awareness and attraction towards their respective products and services. Furthermore, the rapid spread of digital technological tools such as social media platforms, website promotions, digital marketing, etc. have collectively enabled the international companies and MNCs to generate positive brand publicity and a global commercial reputation around the world which has significantly contributed to the expansion of their global market share and commercial success and growth. Therefore, successful and effective advertsising/promotional strategies and favorable exploitation of various digital technological tools have collectively enabled these organizations and companies to gain a worldwide commercial success/growth and thereby establish a massive economic dominance and power around the world which often evidently surpasses the economic authority of the individual nation states. In this respect, it can be said that the modern world economy is strategically dictated by many of the successful and internationally renowned large-scale corporations and international business entities. Additionally, the opening up of international trade among various small and big nation states around the world also largely contribute to the economic dominance of these organizations as it essentially enables them to dictate the international market for various goods and services through global exports and imports. Many of the MNCs and international organizations also operate or function as export companies or entities which provides them the opportunity to enhance their market share by exploiting various internal and external economies of scale and through bulk export of various goods and services in various countries around the world.

The growth and operational expansion of MNCs and international business organizations in various countries are also essential for the economic growth and development of those respective countries which often compels the political administration or government in these countries to incorporate the business and operational aspects or agendas of these MNCs and international companies into their economic policy or decision-making framework. The inflow of FDI and MNC operations can induce potential economic growth through higher production of goods and services, business or capital investment projects and initiatives, domestic employment growth, mobilizing aggregate consumption expenditure on various goods and services, and so forth. Therefore, the domestic or internal policy framework in many countries has to consider the FDI and operational inflow of the MNCs as a serious concern. Morover, considering the massive global economic dominance and influence of these MNCs and international business organizations, the political governance or administrations in many countries are literally compelled to safeguard the economic interests or commercial incentives of these companies and abide by their operational decisions and agendas. Hence, it is evidently true that many of the large-scale MNCs and international corporations do influence the political policy mechanism and decision-making framework in many countries across the world. In this context, these companies or organizations can also exercise their global power and dominance to influence the results or outcome of domestic or internal political elections in many countries through political lobbying, constituting and mobilizing pressure/interest groups, and sometimes corruptive means and practices as ensuring a relatively suitable or favorable political incumbency in any country would subsequently facilitate the attainment of their desired economic and commercial interests and incentives possibly through business and operational expansion in that particular country. Therefore, an overall shift in the power dynamics towards these MNCs and international corporate entities is very much evidently and is increasingly gaining momentum with the rapid and unstoppable spread of globalization.