Question

Some assume that multinational corporations increasingly being held accountable to constituencies other than traditional investor groups is due to the fact that the local legal system should protect the constituencies hence the regulation for full disclosure. Can you explain further?

Answer 1

There are various reasons due to which multinational corporations are increasingly being held accountable to constituencies other than traditional investor group. They are as follows-

1. The increasing concern over social and economic impact of multinational corporation in host countries.

2. The growing implications of trade unions all across the world

3. The growing consciousness due to which those who suffer the most will also influence the most.

4. The rejection by many government of classical economic premises such as beliefs that related pursuit of private gain maximizes social welfare.