Multinational capitalism dictates the system while the latter comply for fear of instability. It is the reason, that the Japanese government pumped billions of pounds into its economy over the last five years. Since it feared the consequences that the collapse of Mitsubishi would be disastrous for the Japanese economy. The move against Microsoft has created real problems as the share price of Microsoft dropped 45 percent which would affect future investment in the dot. com companies [Morgan (2000)]. These incidents certainly do not indicate the end of state government control over the activities of MNCs.
But there certainly is a lack of will to do so. According to WDM [(2000)], the globalization has two components. There are the advances in technology which are not undesirable and then there is liberalization which has given free markets to power and thus the governments’ ability to social improvements has hampered. It was conceived that free trade should do welfare to all rather it is doing welfare of the select few. On the contrary, liberalization is diverting away ensuring that every aspect of society contributes to MNCs’ quest of corporate profit.
Though governments are expected to make rules for corporations, it is, actually, another way round as the corporations are dictating the rules to governments. The challenge is to overturn this trend since economic activity should serve the needs of the community. Enforcement of such regulations is the most likely way of restraining biased corporate activity. National and international legal systems should modify to bring corporate activity under the rule of law so that it does not create adverse consequences for communities. Twenty years ago, the Brandt report received great commendation.
It’ s recommended that "effective national laws and international codes of conduct are needed to provide a framework for the activities of transnational corporations" is even truer today.
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