The Role of Multinational Corporations (MNC) in Soft Power (Part I)

Multinational Corporation (MNC) is an enterprise that operates in several countries but regulates and manages by one home country and often has one centralised head office. This definition was given by Investopedia (1) and by Business Dictionary (2).
Today there are so many actors in the international relations, therefore the power spread chaotically among these actors. As Joseph Nye states, “world politics today is like a three-dimensional chess game”. The institutions, information providers, governmental and non-governmental organisations, transnational corporations and others are now the main players in the international relations. But reaching to the multitude of actors in the international relations did not happen so smoothly.

In the years of 1960 and 1970, the Congress declared new social regulations towards consumer and environmental safety which at that time business corporations are unable and incapable to stop them. These regulations awoke giant corporations which had no interest in politics. After that process, all corporations and the heads of these companies actively became engaged in politics in the USA.(3) From the beginning second half-year of the 20th century, Western countries engendered the theory of political economy. With Ronald Reagan and Margaret Thatcher, the spectrum of corporations began to become free in their actions and gradually build a monopoly. The theory of neoliberalism gave this action a birth since the neoliberalism is the ideology that promotes a free market for economic growth which believed that human being can progress through economic freedom. It states the minimal intervention of the governments to the free trade and capital.(4) The Western countries used neoliberalism without adding or changing the concept, but some Asian countries, especially, China diluted the concept itself by adding and changing it. For example, Deng Xiaoping began to use market socialism, which merged neoliberal and communist elements in it. However, this step helped to develop the country and transcend the other Asian states.(5) This regulations and enforcement of neoliberalism in the world boosted the emergence of companies and corporations.
Non-governmental players, in particular, business corporations and organisations began to produce and sell their products. After occupying markets in their own countries, they began to spread goods regionally and then globally. Rising of multinational corporations boosted the development of transportation worldwide. Moreover, after this development, companies focused on preserving their public reputations and fortifying their public attraction. Each year the worldwide brands, such as Coca – Cola, MC Donald’s, Adidas and etc. work on soft power in order to attract people to their products. But sometimes the problems occur against the reputation of the corporations which threaten the sales of products in the future. On this occasions, these corporations should try to find out what is the problem, what is the need of the people, how to fix the problem. While using soft power, corporations cannot and should not neglect the needs of people. For instance, nowadays people became aware the setbacks of the MC Donald’s products in terms of “harming the health” and people try not to eat the fast foods. The companies which spread this notion changes the way of people think and it becomes a social trend which shatters the global reputation of the companies such as MC Donald’s junk food serving. Recently, Katie Levans wrote in EcoWatch about the fast food giants and how the tendency of “junk” gradually vaporising from the name of the food. Now, Shake Shack, Panera, Five Guys and Chipotle are the “fast-casual” restaurants that draw the attention of consumers with healthier food and more experienced serving methods.(6) As it was written, “Shake Shack and McDonald’s both serve burgers, but that’s where similarities end.” This shows how soft power is strong that can change the people’s thoughts.

The internet is also a major tool for non-governmental organisations and multinational corporations and which helps them to connect and share the soft powers of corporations. Also, it helps to gather information from people evaluate it and then use again a soft power in order to change it.(7) For example, social networks, namely, Facebook, Twitter, Instagram and others help companies to build data that is collected from audience and customers which afterwards can be measured and evaluated by the workers of the company. It helps to see the gaps, take steps, create new methods, use soft power elements, attract the people, change their mind and also keep the credibility of the company. Therefore, network works as a powerful instrument in a new millennium. The ones who want to maintain power should intensify its means of communication and if there is a problem in a communication, the third part which offers communication becomes powerful because it holds power by connecting the others.(8)

As I mentioned the Soft Power survey by Monocle magazine, the USA made it again the first powerful Soft Power regulator because of the Silicon Valley, free of information and innovation, education and multinational corporations, such as Google, Amazon, Microsoft, Marvel, and Walmart and so on. This could also be called a “neocolonialism”(9) which aims to rule the less developed or dependent countries by the traditionally powerful ones. However, the USA does not occupy any country or use imperial power in order to take lands or territories but it remains the first robust state both economically and culturally. That means today the most effective power can be soft power and the main actors can only be corporations.

 

Bibliography:

1. Investopedia. http://www.investopedia.com/terms/m/multinationalcorporation.asp
2. Business Dictionary. http://www.businessdictionary.com/definition/multinational-corporation-MNC.html
3. Business Insider. How corporations turned into political beasts. http://www.businessinsider.com/how-corporations-turned-into-political-beasts-2015-4 (April 25, 2015)

4. The Encyclopædia Britannica Online https://www.britannica.com/topic/neoliberalism
5. Melissa Nisbett. Who Holds the Power in Soft Power? Arts & Affairs International Journal. (March 13, 2016) https://theartsjournal.net/2016/03/13/nisbett/

6. EcoWatch. Katie Levans: Millennials Drive Sustainable Food Practices at Fast-Casual Restaurants. http://www.ecowatch.com/millennials-drive-sustainable-food-practices-at-fast-casual-restaurant-1882020068.html
7. Joseph Nye: Soft Power – Means to Success (pg. 90)
8. Joseph Nye: The Future of Power 2011 (pg. 39) 27 It is the use of cultural, economic or intangible sort of power in order to control the former dependent country.

9. It is the use of cultural, economic or intangible sort of power in order to control former dependent country.

 

 

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