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Assess whether legal controls are the most effective way of controlling the actions of multinational companies in countries, such as Brazil. - Edexcel - A-Level Business - Question 2 - 2022 - Paper 1
Question 2
Assess whether legal controls are the most effective way of controlling the actions of multinational companies in countries, such as Brazil.
Worked Solution & Example Answer:Assess whether legal controls are the most effective way of controlling the actions of multinational companies in countries, such as Brazil. - Edexcel - A-Level Business - Question 2 - 2022 - Paper 1
Step 1
Legal controls include the use of legislation and government policies
Answer
Legal controls play a significant role in managing the operations of multinational companies. These controls can include regulations regarding advertising and the sale of unhealthy products, influencing how companies like KFC and Pepsi market their items. This regulatory framework is essential to ensure that these companies adhere to local laws and ethical standards, thus protecting public health.
Step 2
Counterbalance of potential enforcement and effectiveness
Answer
It is crucial to note that legal controls are only effective if they are enforced. With Brazil having a history of regulatory challenges, enforcement can be inconsistent. Multinationals may exploit these gaps, undermining the benefits of legal frameworks designed to control their actions.
Step 3
Evaluation of other forms of control
Answer
Alternatives to legal controls also deserve consideration. Activism and public pressure, for instance, can lead to significant changes in corporate behavior. Social media has amplified consumer voices, enabling customers to hold brands accountable, as seen in cases of health and environmental issues.
Step 4
Potential limitations of legal controls
Answer
Legal controls might not be the most effective if multinationals can shift their focus to other markets, especially when they face pressure in Brazil. Consumers might perceive these brands as aspirational, thus diminishing the impact of regulatory measures aimed at curbing their influence. Ultimately, legal controls alone may insufficiently address the broader actions of multinational companies.