Multinational Corporations - A global economy: the 1990s




With the development of a truly global economy by the 1990s, opinion with respect to the multinational corporations in home and host countries varied considerably. American multinationals have often been viewed abroad as purveyors of technology and business efficiencies and as bearers of products meeting an insatiable appetite for American goods. But a more negative image also developed. The growing competitiveness of the new world economy and a heightened emphasis on cost efficiencies, job reductions, retooling, and relocation led to complaints in home and host nations about declining market shares and lost jobs.

The transnational character of the multinationals proved irksome to the growing legion of laid-off workers and lower-and mid-level managers who felt most victimized by the new competition and the search for cheaper labor markets. Government officials sensed a loss of their sovereignty because of the ability of these corporations to move their operations, transactions, and profits upstream or downstream as their self-interests dictated. Transfers of technology were another issue pitting MNCs and host and home governments against one another, as they jockeyed to maintain or gain control of technological breakthroughs for reasons of national security and profits.

By the beginning of the twenty-first century, the fact that more and more of the world economy seemed to be dominated by a relatively few multinational giants also led to the ringing of alarm bells. (Estimates of U.S. multinational corporations in 2001 ranged around three thousand, but the numbers were declining because of a wave of corporate mergers.) Other problems creating tensions between MNCs, host governments, and home governments included jurisdictional disputes, cultural differences, nontariff barriers to trade, international agreements among the multinational corporations, and conflicting political agendas on such matters of principle as the environment, energy, human rights, accessibility to proper medical treatment and high-cost pharmaceuticals, sweatshops, and child labor laws.

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