The Developing Countries,Development,and the Multinational Corporation

Abstract

The point of departure is an explicit discussion of the nature of nationalism in terms of resource allocational priorities. For a variety of reasons the priorities differ from nation to nation. In that the penetration by an alien firm always requires the commitment of local resources, conflict is possible. The corporation's overall profit-maximizing objective pushes in the direction of centralizing control external to the host country, which in fact also causes conflict. It is suggested that a time limit on foreign ownership may be an appropriate response, as may be a higher level of sophistication with respect to environmental analysis on the part of the foreign corporation. Given the instabilities built into the multinational firm, two possible future scenarios are seen: (1) the transnational firm—a multinational corporation that is owned and managed multinationally—and (2) the multinational or transnational association—a corporation linked internationally essentially by contract. The latter is seen as possibly serving the best interests of the less developed countries.