TransNational and Multinational Corporations in Global Politics

In today's globalized world, TransNational Corporations (TNCs) and Multinational Corporations

(MNCs) have become powerful non-state actors in global politics. These corporations operate on
a global scale, spanning multiple countries and exerting significant influence over policies and
international affairs.

What are TransNational Corporations (TNCs)?

TransNational Corporations (TNCs) are companies that operate in multiple countries, with
headquarters in one country and branches or subsidiaries in others. They engage in various
economic activities, such as production, marketing, and distribution of goods and services.

What are Multinational Corporations (MNCs)?

Multinational Corporations (MNCs) are similar to TNCs in that they operate in multiple countries.
However, MNCs are typically characterized by having a central headquarters and subsidiaries that
are more independent in their decision-making processes.

Why are TNCs and MNCs Powerful Non-State Actors in Global Politics?
TNCs and MNCs possess significant economic power, which translates into political influence.
They have immense financial resources, advanced technologies, and extensive global networks.
This enables them to shape policies and influence decision-making processes at both national and
international levels.

What Type of Power Do TNCs and MNCs Exercise?

TNCs and MNCs exercise corporate power, which can be both hard and soft power.
• Corporate Power: refers to the influence and control that large TNCs and MNCs can exert
over economic, political, and social affairs due to their size, wealth, and global reach. For
example, a tech giant like Apple can impact global market trends and influence
international trade policies through its vast network of products, services, and lobbying
efforts
• Hard Power: TNCs and MNCs can exert hard power through economic coercion, market
dominance, influencing policies in their favor.
• Soft Power: TNCs and MNCs also exercise soft power through their ability to shape public
opinion, create positive brand images, and influence societal values and norms.

What Gives TNCs and MNCs Legitimacy?

TNCs and MNCs gain legitimacy through their economic contributions, job creation, technological
advancements, and corporate social responsibility initiatives. However, their actions and behaviors
are subject to scrutiny and criticism.

How Do TNCs and MNCs Influence Global Politics?

TNCs and MNCs influence global politics through various ways:
 • They contribute to global issues, such as climate change, human rights, and sustainable
development, by participating in international initiatives and implementing corporate
policies aligned with global goals.
• They shape global policies by lobbying governments and international organizations to
adopt regulations that are favorable to their business interests.
• They influence international laws through their involvement in global trade agreements
and negotiations.

How Do TNCs and MNCs Challenge State Sovereignty?

TNCs and MNCs challenge state sovereignty by operating across national borders and influencing
policies that traditionally fall under the jurisdiction of states. Here are some relevant case studies
and examples:
• Case Study 1: In 2010, BP's Deepwater Horizon oil spill in the Gulf of Mexico had severe
environmental and economic consequences. The incident highlighted how a multinational
corporation's actions can transcend national boundaries and impact multiple countries.
• Case Study 2: The global tax practices of multinational corporations, such as Apple and
Google, have raised concerns about their ability to evade taxes, challenging countries'
ability to collect revenue effectively. Challenging a state’s economic sovereignty.

What Are the Criticisms of TNCs and MNCs?

TNCs and MNCs face criticisms in various areas:
• Human Rights Concerns: Some corporations have been accused of human rights abuses,
such as exploitative labor practices and complicity in human rights violations in countries
where they operate.
• Environmental Concerns: TNCs/MNCs involved in industries like mining, oil, and
manufacturing have faced criticism for their environmental impact, including pollution,
deforestation, and carbon emissions.
• Governance: TNCs and MNCs have been criticized for their lack of transparency,
inadequate corporate governance, and excessive influence over regulatory mechanisms.
• Labor and Child Rights Issues: Certain corporations have faced accusations of poor
working conditions, child labor exploitation, and violations of labor rights in their global
supply chains. E.g. Glancore, a mining MNC in the Congo.

Tasks
1. Identify one TransNational Corporation (TNC) and one Multinational Corporation (MNC) by researching and
provide a brief overview of their activities.

2. Discuss an instance where a TNC or MNC has faced criticism related to human rights or environmental concerns
in the past 15 years.

3. Consider the challenges TNCs and MNCs pose to state sovereignty. Analyze a case study where a multinational
corporation's actions have had transnational implications.

4. Reflect on the power and influence of TNCs and MNCs. Do you believe they should be held more accountable for
their actions? Explain your reasoning.