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Multinational Executives and Their Influence on Global Governments

Updated on November 16, 2016

Mulitnational Executives and Their Increasing Power

“In a 2011 Harris poll, a large majority of those polled believed that big companies had too much political power (88 percent)…What is the group perceived as having the least amount of power in politics? The answer is small businesses; only 5 percent of those surveyed felt that they had too much political power. In the 18 years that the Harris Poll has been asking these questions, people have become increasingly concerned about big companies...” (“Big Companies, PACs, Banks, Financial Institutions and Lobbyists Seen by Strong Majorities as Having Too Much Power and Influence in DC,” 2011). Since 2011, those numbers have only grown, and the executives of these large companies not only have major political influence here, but globally. Most of the products that we use on a regular basis, without even thinking, are produced by a handful of companies. Some examples are Kimberly-Clark, Fed-Ex, etc.

As these major companies continue to grow at such rapid rates, they’re beginning to break ground in new regions. Kimberly-Clark’s headquarters is at Irving, Texas, United States, but there are locations all over the world including Brazil, Bolivia, Chile, Central America, Equator, Colombia, Peru, France, and Venezuela. As these companies expand to these new regions, they begin to form bonds with higher government officials. Some companies who break ground in lesser developed countries do so due to the less strict regulations on many aspects such as labor hours and wages. As these companies continue to grow and prosper in these areas their bond becomes thicker with government officials.

The government officials in these areas are more likely to engage in bribery, to an extent. These executives are able to employ such a large number of citizens that the governments in these areas almost have no choice but to comply with what these companies want. For it is very easy for a large corporation with a massive amount of capital to simply up and leave a location and find one in another region of the world that will be more willing to comply with what they want. Sometimes, companies can use their government influence for good and other times for bad.

Chiquita Brands is a wonderful example of how multinational executives having major political influence/power in a country could go horribly wrong. The company operates heavily in Colombia and in the early 2000’s they were confronted by a paramilitary group, the United Defense Forces of Colombia. The company asked for money in order to fund operations and they made it very clear to Chiquita that if the company refused to make regular payments to the paramilitary group that their employees would be at risk. In order to keep their employees safe, they made regular payments to the group; however, what kind of “operations” were they funding? Yes, they were able to keep their employees safe, but this paramilitary group has officially been declared a terrorist organization since 2001. Although Chiquita had been informed that the payment they were making were illegal, they continued to make payments as high as an additional $825,000 to the paramilitary group, and instead of moving operations to keep everybody safe and stop funding the group they also agreed to pay the fine for making these payments and continued to do so. Many lawsuits have been filed up to as recently as 2011 and the names of 4,000 victims were submitted, targeting Chiquita for its undeniable “support” to the paramilitary group.

Nike is an example of a company who went internationally to use child labor in their favor. Wal-Mart went to Mexico in order to use cheap facilities and labor. The executives of these companies are able to become associated and rather friendly with high government officials and entice them to do as they please.

As time goes on these companies are only growing and expanding their horizons. As these companies break ground in new regions with less stable governments the executives of these companies are able to sway elections with financial contributions. This is done in the United States as well, but this way these elected government officials are acting as puppets for their contributors. In order to keep the financial support from these executives, government officials are asked to be more lenient about many laws and regulations such as labor hours, wages, age, etc.

Not all executives use their political power/influence in other countries negatively. There are plenty of situations in which these large corporations take on social responsibility and donate funds to help the many regions they’re located in globally. They have donated to build infrastructure, help the environment, encourage education, etc.

The bottom line here is how much power is too much? Global expansion is a wonderful thing and that helps the economy continue to grow, but the power is in the hands of so few people. These executives have this immense amount of power and from there it’s completely up to them to decide how to use it. Will they use it negatively and continue to seek only profit? Or will they use it positively to help develop many underdeveloped regions and economies of the world? It’s up to them, and their power is only increasing.

Sources:

“Big Companies, PACs, Banks, Financial Institutions and Lobbyists Seen by Strong Majorities as Having Too Much Power and Influence in DC,” Harrisinteractive, June 1, 2011, www.harrisinteractive.com

Lawrence, & Weber. (n.d.). Business and Society (14th ed.). McGraw-Hill.

Roach, B. (n.d.). Corporate Power in a Global Economy - Tufts University. Retrieved November 10, 2016, from http://www.ase.tufts.edu/gdae/education_materials/modules/Corporate_Power_in_a_Global_Economy.pdf

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