What Caused the Global Economic Crisis ?
The previous article in the module introduced the global economic crisis with a brief overview of the causes. This article looks at the causes of the global economic crisis in depth. For starters, the global economic crisis carries a distinct “Made in the USA” tag which means that the origins of the crisis are to […]
How Firms and Corporates Grow in any Economy
The rules of economics and business are such that in any economy, old or new, recession or boom, the basic rules governing growth are the same. Indeed, ever since the modern day capitalist model of business emerged, growth at any cost and in any economy has been the driving force behind all the decisions that […]
Inventory Turnover As Indicator of Health of Inventory and Business
Inventory management as well as Supply chain operations are often overlapping and hold the key to the success of sales operations. In all of the businesses be in automobile, manufacturing, pharma or retail industry, status of inventory reflects the health of the business. Inventory operations have two key elements namely Inventory System and Physical operations. […]
All You Need to Know about Data Security and How to Protect yourself Online
Data Security in the News for All the Wrong Reasons The issue of data security has been in the news in recent months. First, there were reports of hacking of computers in the Presidential Election of 2016 where Russian hackers were alleged to have hacked into the computers of the Democratic Party and reveal insider […]
Business Process Improvement – Project Implementation
Business Process Improvement projects are undertaken by Organizations from time to time to improve their internal performance and operational efficiencies. Success of BPI project depends largely upon two factors: First and foremost, the BPI project depends upon its sponsors who should ideally be drawn from the Management and the Business Unit Heads. Sponsorship and facilitation […]
Of the many criticisms of globalization, the prominent critique relates to the fact that globalization erodes national sovereignty and takes away the power of governments. By allowing international corporations and multinational businesses to set the economic (and often, the political agenda), critics argue that the nation state becomes irrelevant.
The point to be noted is that if global corporations can set the agenda, there is nothing inherently wrong about that. Just that capitalism runs on the profit motive to the exclusion of everything else and hence, businesses simply cannot be allowed to set the terms of the political and economic discourse because the nation state is answerable to all citizens and not just to the wealthy and privileged.
It needs to be mentioned that nation states exist for welfare of the citizens and not for making profits alone. By usurping the powers of the nation state, the corporations reduce everything to money and profits and this has a corrosive effect on the welfare of the citizens.
Ever since the 1990s, it has become fashionable for corporations to demand global rules of doing business that are uniform across the world.
In other words, international businesses want the same set of rules and procedures in all countries i.e. the right to repatriate profits, the right to exploit natural resources, uniform taxes, and tax structures, the removal of barriers on entry and exit, among other things.
This means that the notion of a global marketplace that is consistent across nations and one that is friendly to the corporations is the aim of this endeavor. This is definitely a plan to take away the power of the governments to set the rules and though there are many experts who point to the enabling features of globalization especially where lifting billions of people out of poverty is concerned, critics are aghast that the poor and underprivileged who are already suffering would be hit by a double whammy.
Given the fact that some multinationals have more revenues than some countries entire economic output, the power of these companies is indeed deep and wide.
Hence, the temptation to override national governments and instead, set supranational rules to be followed results in the ceding of sovereignty by the governments. As has been discussed in the previous sections, this results in the notion of profits before people and does away with the basic humanitarian impulse that is behind the modern concept of democratic states.
The supranational economic order does not have allegiance to nations or nationalities but to super elite whose interests span across countries and whose loyalties lie to the economic principles that are devoid of humane and social objectives.
Finally, global corporations have grown in power in recent decades and this trend while contributing to global growth has also produced sharp inequalities and led to exacerbation of ethnic and social tensions between the haves and the have-nots.
Hence, there needs to be a moderation in the way global corporations are allowed to usurp the power of national governments and the way in which national sovereignty is ceded to the international businesses.
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Cross Border Mergers and Acquisitions and Some Recent Trends in this Field
February 12, 2025
