“The largest TNCs have greater global power then national government” discuss this statement

A transnational company (TNC) is an organization that operates in a number of countries. Generally, TNC

headquarters are in HIC cites, with research and development and decision-making concentrated in growth

areas of HICs (core) and assembly and production located in LICs and NICs, and depressed parts of the hits

(the periphery). A global power is the state with a dominant position characterized by its extensive ability to

exert influence or project power on a global scale. This is done through the combined means of economic,

military, technological and cultural strength as well as diplomatic and soft power influence. Powers can

range from soft power (ability of a nation to exert control by economic, political, moral or cultural means)

and hard power (when a country uses military coercion to influence the interests or behaviors of other coun-

tries or political bodies). National governments are government with members from more than one political

party. Both TNCs and national governments have varying degrees of power. This essay will examine which

is more powerful than the other.

The sheer scale of the economic transactions that TNCs make around the world and the effect they have on

urban, regional and national economics give them tremendous power. Thus TNCs have become planned

economies with vast internal markets. Internal transfer of TNCs produces money for the government via

taxes and levies. Economic power comes from the ownership of assets. Although many governments in de-

veloped countries own their own resources TNCs still control the marketing and transport of goods. Reduced

demand and increased competition create unfavorable economic conditions. Globalization has brought much

employment and economic growth to low-wage countries. The transfer of employment from HICs has led to

declining wages and increased job insecurity in HICs. Nevertheless they have been a number of campaigns

to improve worker rights and employment conditions and TNCs have been reminded of their responsibilities

to their worker sand to the environment. Sustainable management of supply chain means improving workers

conditions, ensuring safe anvioenental practices and making long-term economic improvement sin the com-

panies involved. Critics argue hat TNCs in nICs and LICs have been too concerned with he exploitation to

workers to be truly sustainable. However, many NICs are increasingly aware of their corporate social respon-

sibility (CSR) The Global Production Network (GPN), which is a chain of connected supplies of parts and

materials that contribute to the manufacturing or assembly of consumer goods, serves the needs of TNC to

meet the demands of many different worldwide markets. As globalization has accelerated, the size and den-
sity of GPN has increased with TNC hub companies outsourcing manufacturing to other countries with their

Owen supply chains and administrative functions to sub-contractors. An example of TNCs and their global

strategies and supply chains include the Tata group, which comprises over 100 companies, encompassing

consultancy, software, steel, tea and transport, chemicals and hotels, many of their respective branches being

the largest in Asia or India. Tata operates in over 80 countries and employs about 600000 people, with 60%

of revenue

In contrast, global organizations (including global leading institutions and global groups of nations play an

important role as well. National governments include powerful global groups such as the OECD, which is

the Organization for Economic cooperation and Development, which is a grouping of high income nations-

and middle income countries like Mexico. The OECD mission is to promote policies that will improve the

economic and social well-being of people around the world. Members states have signed formal agreements

on protecting the environment. They have also agreed to work together to tackle the challenge of aging popu-

lation. The OECD made good progress towards clamping down on tax envisions by TNCs. Rules to stop

companies using compels tax arrangements to avoid paying corporate tax have been agreed by 31 members.

They will make it harder for firms to hide money in tax havens in the future. However, OECD economists

failed utterly to predict the slowdown in the world economy which began in 2008, which was a huge over-

sight. Another IGO includes the Organization of Petroleum Exporting Countries (OPEC), a healthy and im-

portant global grouping of countries like Saudi Arabia and Qatar. As demand for oil has grown, OPEC na-

tions have gained enormous wealth. However, several OPEC countries have suffered the destabilizing effect

off civil war, insurgency or internal national conflict, including Kuwait, Nigeria, and Iraq. Global leading in-

stitutions have a significant role in global governance. An example includes the International Monetary Fund

(IMF) which monitors thee economic development of countries. They lend money to states in financial diffi-

culty which have applied for assistance. Help is provided across the development spectrum when they en-

counter financial difficulty. IMF rules and regulations are controversial, especially the strict conditions im-

posed on borrowing government. In return for help, recipients agree to run free market economies open to in-

vestment by TNCs.
To summarize, both transnational corporations and national governments hold a significant amount of power.

However, transnational corporations constitute the most influential economic power on the globe as a whole,