Influence of MNC and IPE to Fashion Industry

Fashion has been established since the early 14th century and has always been dominant
in each part of the region. Moreover, the bourgeoisie acquired the “hobby” of collecting fine
wardrobes of their nations made of fine cotton, wool, and leather as they own most of society’s
wealth and means of production. The phenomenon led to a larger and faster commercial
production that became the element of reshaping the domestic and global trades. The economy
keeps on advancing, and globalization happened through this. The demand for fashion items
created companies that will provide consumers with the “fashion needs.” Continuous trading and
exchange of goods led to a much larger global trade and opportunities where companies ventured
out of their home countries to other countries. These companies are now called multinational
corporations.

According to Kim and Milner (2019), Multinational Corporations (MNCs) have a

significant role in shaping the global economy— the food industry, mining industry, fashion
industry, and many more. They influence the government about policies and concerns through
lobbying. In the fashion industry, many companies have emerged and are venturing out to
different countries. Most of these fashion industries brand themselves and adopt “fast fashion” or
trendy clothes. With the emergence of this fast fashion, the effect of this is the union of a rapid
production, likable product style. It eradicates the behavior of the consumers where they wait for
the end clearance of each seasonal collection. Therefore, in this sense, the fashion industry is not
stagnant anymore as it is already accorded to constant replacement of usage by global
consumers.

Bargaining with Multinational Corporations

In most of their host countries, multinational corporations can supply capital, technology,
management, marketing networks, and employment to the business industries (Chazan et al.,
1992). The host countries are not the ones who will be responsible for the capital of the business,
as these are at the expense of the MNC itself. However, MNCs are also harmful to their host
countries because the products they are selling come from their home countries. In fashion
industries such as H&M and Forever21, their products are from their home countries, making the
revenue of these products circulates to the economy of their home countries alone. It is because
the raw products are from there. Moreover, to put a solution to these conflicts, it is the
responsibility of the host country's government to negotiate with the Multinational Corporations
for a policy that will be beneficial to both sides.

It would also be more beneficial to the host countries, especially the developing
countries, to increase the number of Multinational Corporations. As Chazan et al. (1992) stated,
with the advent of increasing numbers of TNCs, the host countries are placed in a better
bargaining position as these MNCs will compete against each other in the host countries. With
these, other companies offer an assessment of the actual market worth of services which allows
governments to maintain stricter control of the pricing by MNCs for the benefit of the host
country. In fast fashion industries, it is essential to have the MNCs lobby the policies and
benefits for the fast fashion retailers in their own home countries to provide a stricter and
regulated policy centered on protecting those in the fashion industry..

References:

Kim, S. and Milner, H. (2019, December 02). Multinational Corporations and their Influence
Through Lobbying on Foreign Policy.
https://www.brookings.edu/wp-content/uploads/2019/12/Kim_Milner_manuscript.pdf

Chazan, N., Mortimer, R., Ravenhill, J., and Rothchild, D. (1992). Politics and Society in
Contemporary Africa. https://link.springer.com/book/10.1007/978-1-349-14490-7