Business Guidance and Control Mechanisms

THE EVOLUTION OF MODERN MNES created a mismatch betweentraditional systems for regulating business based on national law and the globespanning reach of MNE operations. The MNE form of organization simply outdistances most national government controls, while international institutions lack the political authority and enforcement capability to pick up where national mechanisms stop at territorial borders. This disparity alarms actors in both the public and the private sectors who perceive growing MNE influence on national economic, social and even political processes.The ensuing search for effective business guidance and control mechanisms covers an array of alternatives, ranging from voluntary through coercive to mandatory.The challenge is to select and activate the best mechanisms to influence MNE actions in ways that maximize benefits and minimize potential harm to the many societies MNEs serve.