Restraints multinationals are subject to
- Created by: tanja soulsby
- Created on: 05-06-17 11:38
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- Political, Economic & Legal Restrains Multinationals are Subject to
- Legal
- As multinationals operate in many different countries, each with its own laws etc. governments sometimes co-ordinate approaches to manage activities of the multinational
- European Union has tried to standardise employment law
- E.g. equal opportunities and safety standards
- Multinationals in the EU have to meet minimum standards wherever they locate
- Known as harmonisation
- Untitled
- Political
- Governments sometimes use protectionist policies to protect their own economies
- E.g. Tariffs
- E.g. Quotas
- Pressure groups sometimes try to influence government policy on multinational organisations
- They try to persuade governments to put tighter controls on how multinationals operate in different countries
- E.g. stop them from using child labour in foreign countries etc.
- They try to persuade governments to put tighter controls on how multinationals operate in different countries
- Governments sometimes use protectionist policies to protect their own economies
- Economic
- Transfer Pricing
- When a multinational buys and sells products between parts of the company based on different countries
- Can make it very hard for governments to control taxes a multinational pays
- Can be used to make all profits appear to belong in a country with very low tax rates
- Reduces the amount of tax a multinational pays
- Might conflict with any CSR the business has
- When a multinational buys and sells products between parts of the company based on different countries
- Transfer Pricing
- Legal
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