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INTERNATIONAL RELATIONS

INTERNTIONAL
RELATIONS

INTERNATIONAL RELATIONS

RELATIONS
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INTERNATIONAL RELATIONS

IMPACT OF MNCS ON
INTERNATIONAL

INTERNATIONAL RELATIONS

INTERNATIONAL RELATIONS

INTERNATIONAL RELATIONS

INTERNATIONAL RELATIONS

INTERNATIONAL RELATIONS

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Anza

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MERITS & DEMERITS OF


MNCS

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INTERNATIONAL POWERS OF MNC


Tax break
A deduction in tax that is given in order to encourage a
certain economic activity or a social objective.
Economic Imperialism
The geopolitical practice of using capitalism, business
globalization, and cultural imperialism to control a
country, in lieu of either direct military control or indirect
political control.
Market Withdrawal
The act or threat of removing one's goods or services from
the consumer market, potentially reducing the supply of
a product, or of jobs.
Direct control
over foreign affiliates/subsidiaries

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ROLE OF MULTI-NATIONAL CORPORATIONS IN


INTERNATIONAL SYSTEM
Multinational corporations have grown and developed
on a large scale in 20th century.

Today multinational corporations are not only


production centers that supply crucial and commercial
goods to us.

Their integrating economic power evolves to an


influence that can even effect political and economic
relations between nation states.

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CHARACTERISTICS OF A MULTINATIONAL
CORPORATION
A MNC tends to be an oligopolistic corporation in which
ownership, management, production and sales activities
extend over several national jurisdictions.

It is composed of a head office in one country with a


cluster of subsidiaries in other countries.

It can use many kinds of instruments to create business


areas.
They frequently do this by Foreign Direct Investment
(FDI).

MNCs not only have multinational investments but also


multinational human resources.

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Daniyal

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INTERNATIONAL RELATIONS

IMPACTS OF MNCS

THE IMPACT OF MULTINATIONAL CORPORATIONS ON


INTERNATIONAL RELATIONS

MNCs have become massive in scale and have


come to exercise a major influence over political,
economic and social developments throughout
the world.

The un-stoppable rise of multinationals gave them


both an economic and political power to manipulate
state actions.

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IMPACTS
The emerging global order is spearheaded by a few
hundred corporate giants, many of them are bigger
than most sovereign nations.

The new giant firms of the 21st century have


achieved something that no other nation could
manage today. They have reached millions of
people through different kind of global webs like
shopping, culture, workforce and finance.

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IMPACTS

rise of multinationals has threatened


the absolute power of nation states.

Nowadays

it seems that the sovereign


states are feeling naked. Concepts such as
national sovereignty and national economic
strength appear curiously drained of
meaning.

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The

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IMPACTS
Both domestically and internationally, states
start to share their political and economic
power with institutions like MNCs.

While they were crossing the border they did


not only interact with the host governments but
they are also cooperated with their home
governments.

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Aqeel

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GLOBALIZATION AND
MNCS

GLOBALIZATION AND MNCS


When multinationals broadened their businesses,
they became great political and economic tools for
their home governments to interfere in domestic
affairs of their neighbors.

Globalization and interdependence between states


and firms came to a point to affect our social,
political, economic and cultural lives.

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GLOBALIZATION AND MNCS


The world had become more like a global village
where people could meet, trade, interact and effect
each other more than ever.

Nation states, even the wealthiest or the most


powerful ones like U.S, cannot stand alone
anymore in front of multinational corporations in
economic and political arenas.

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Governments promote market friendly policies in order


to take the advantage of the new globalized economy
and in order to cope with the multinationals.

American leadership brought globalization and


globalization brought the multinationals to be one of the
leading actors not only on the economic platform but
also, eventually on the political platform.

The multinational corporation not only promises the


most efficient use of the world resources but as an
institution it poses the greatest challenge to the power of
a nation-state.

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CHALLENGES BY MNCS

Economic sovereignty reflects the ability of a


government to choose how to best to manage its
resources for wealth creating activities.
Cultural sovereignty reflects the freedom of a country
to determine its own way of life, ideologies and values
of other societies.
Legal sovereignty defines a countrys authority to
devise its own laws and regulations, independent of any
outside interference.
Political sovereignty embraces economic, cultural and
legal sovereignty.

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The challenge that MNEs pose against the


sovereignty of the nation state have different
degrees.

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Momina

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INTERNATIONAL RELATIONS

DIPLOMACY

INTERDEPENDENCE AND TRIANGULAR


DIPLOMACY
Multinational firms are becoming more like
statesmen as they seek corporate alliances to
enhance their capacities to compete with others for
world market shares.

These structural changes in international political


economy have altered the nature of the game thus
affecting the actions and responses among firms
and states.

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TRIADS OF RELATIONSHIPS
States are losing their power to pursue independent
policies and now must master the new game of
triangular bargaining.

The new game is about keeping relations at a level


which please everyone at the same time.

States are now in the middle of a Bermuda triangle.

Governments need to manage a series of difficult tradeoffs among competing internal and external objectives.

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NEW DIPLOMACY

Bargaining among states for power and influence.

The competition among firms contesting the world


market and the specific bargaining between states
and firms for the use or creation of wealthproducing resources.

Finance and knowledge.

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New diplomacy has three critical ingredients:

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NEW DIPLOMACY
Changes in these structures throughout in the last
century and in this century have also created new
possibilities for obtaining wealth.

States and multinational corporations adjust


themselves to these changes in order to take the
best advantages from the triangular diplomacy of
world affairs.

Not only in the international arena but also in


domestic politics the influence of state-firm
bargaining has proportionally grown.

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FUTURE OF
MNCS

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CONCLUSION
From the daily products we use to gigantic power plants,
military aircrafts and petroleum refineries we have seen
the footprints of giant multinational corporations in all
parts of life. Multinationals have become an
undeniable part of our lives.

As the citizens of nation states we have accepted their


existence and are being benefitted from them.

The influence of multinational corporations on


international relations and mainly the effect of American
multinationals on American foreign policy are well
known and accepted issues.

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THANK YOU

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