International Organizations and the Multinational Corporation: An Overview and Observations

Abstract

Multinational corporations can be viewed either as independent actors operating in the interstices of state-to-state relations or as an instrument of foreign policy of states within which the parent companies are located. In either case these enterprises pose a threat to the sovereignty of states, and international organizations have been employed to deal with these challenges. The advanced industrial states of the West have found international organizations useful in attempts to harmonize national policies to avoid potential trade and investment disequilibria, to deal with problems of overlapping jurisdiction, and to encourage the development of multinational corporations. Labor unions in the West have found functionally specific nongovernmental organizations valuable in enhancing their bargaining position vis-à-vis enterprises organized multinationally. In general, these activities reflect a view of the multinational corporation as an independent actor very sensitive to global opportunities. Less developed countries are typically very wary of multinational corporations and tend to view them as instruments through which they could be subjugated to the West. These states have shown an interest in using universal and regional organizations to coordinate and buttress their position in negotiations with the multinational firms. Most international organizations are only beginning to deal explicitly with the multinational corporation phenomenon, but while these activities should increase, it is doubtful that we will soon see the emergence of a new global international organization to focus states' attempts to oversee the behavior of these enterprises as they affect international relations.