SUBJECT: POLITICAL SCIENCE III

COURSE: BA LLB SEMESTER III

TEACHER: MS. DEEPIKA GAHATRAJ
MODULE: MODULE III, ACTORS IN INTERNATIONAL RELATIONS

Topic:
Role of Transnational organisations in International Relations
Role of Multinational Companies in International Relations

ROLE OF NON-STATE ACTORS IN INTERNATIONAL RELATIONS

At the International scene, there are many players engaged in what is regarded as the game
of international Politics. One of the oldest and universally acknowledged actors on the
modern world stage is the state. A state is a type of polity that is an organized political
community living under a single system of government. A Political community is referred to
as a government responsible for the citizens under the government. It has been earlier
assumed that international relations are made up of the relations between states.
International relations can be likened to a series of actions that promote interactions
between states. Actors are entities that participate in or promote international relations. The
two types of actors involved in international relations include State and non-state actors.
State actors represent a government while non-state actors do not. However, they have
impact on the state actors.
A definition of world politics involving only states as the actors has been challenged since
the late 1960s and the early 1970s, since many other actors have become way more involved
in the process of international political. Due to this, international relations promotes
International pluralism fostering national interactions. The forces of globalization and
liberalization in the last three decades of the twentieth century have resulted in a
transformation in the world economic structure, thereby undermining the ability of states to
govern in full capacity. These great global transformations have had a major influence and
have modified the traditional paradigm and theories of international relations, most
especially the school of thought of realism due to its basic proposition that actors represent
the states, and the states operate a system of anarchy. The realist school of thought has
however been criticized for its focus on the state view of international relations and its
shallow focus on the problems of war and peace.

(a) Role of Transnational Organisation

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Transnational relations are usually defined as regular cross-border interactions in which
non-state actors play a significant role. This opens a wide research area in the context of
globalisation where a great variety of actors participate in growing global exchanges. Of
particular importance for international relations are transnational actors that wield
considerable influence on politics across borders, such as nongovernmental organizations
(NGOs), multinational corporations (MNCs), religious actors, terrorism rebels, criminal
actors, and diasporas and ethnic actors. Transnational organizations have existed before in
history. Armies and navies, churches and joint stock companies, as well as other types of
organizations have been involved in transnational operations in the past. During the twenty-
five years after World War II, however, transnational organizations: (a) proliferated in
number far beyond anything remotely existing in the past; (b) individually grew in size far
beyond anything existing in the past; (c) performed functions which they never performed
in the past; and (d) operated on a truly global scale such as was never possible in the past.
The increase in the number, size, scope, and variety of transnational organizations after
World War II makes it possible, useful, and sensible to speak of a transnational
organizational revolution in world politics.
Transnational organizations are designed to facilitate the pursuit of a single interest within
many national units. The transnational organization requires access to nations. The restraints
on a transnational organization are largely external, stemming from its need to gain
operating authority in different sovereign states. In this sense the emergence of transnational
organizations on the world scene involves a pattern of cross-cutting cleavages and
associations over- laying those associated with the nation-state.
A distinctive characteristic of the transnational organization is its broader-than-national
perspective with respect to the pursuit of highly specialized objectives through a central
optimizing strategy across national boundaries.

(c) Multinational Corporations (MNCs)

The most prominent contemporary NGOs are multinational corporations (MNCs) They are
huge firms that own and control plants and offices in at least more than one country and sell
their goods and services around the world. They are large corporations having branches and
subsidiaries operating on a worldwide basis in many countries simultaneously. MNCs are
"major driver of global economic integration" and "establish unprecedented linkages
among economies worldwide". MNCs can be classified according to the kinds of business
activities they pursue such as extractive resources, agriculture, industrial products,
transportation, banking, and tourism. The most notable MNCs are industrial and financial
corporations (the most important being banks). Naturally the primary objective of MNCs is
profit maximisation. They are very effective in directing foreign policy of states, including

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that of the most powerful ones, and they set agenda for international politics. They have
become a major factor in national economic decision making process.
MNCs may be considered as instruments of economic development for less developed
countries. However, when we look at the functions they perform in host countries, we see
that they have a very strong bond with the home government which becomes a source of
concern for host countries. MNCs challenge the state sovereignty of host countries. Host
countries may lose control over their economies. They create political and social division
and prevent the development of domestic industries in host countries. They may produce
specialized products of which the buyer is usually the parent company. They may
manipulate prices of imports and exports in host countries. However, there are many
conflicts between MNCs and their home countries over taxation, trade policies, and
economic sanctions. MNCs may not want to follow national policies pursued by their home
governments. That is, trade (MNCs) may not always follow 'flag' (state policies).
In order to minimise the negative impact of MNCs, we witness government interventions
through nationalisation, government participation and government initiation of joint
development projects. Furthermore, governments have to maintain control over tax
revenues, inflation rate, credit policies, trade balances, balance of payments, trade
restrictions, monetary values, employment, and economic planning to decrease their
dependence on MNCs. Host countries may place restrictions on the ownership and
behaviour of subsidiaries and on the freedom of businesses. Because only by controlling
these fields a host country may have an upper hand vis-a-vis MNCs.
Multinational Corporations (MNCs) in advanced industrial countries with a free enterprise
system have been operating on the basis of mutual infiltration or interpenetration . “In the
case of underdeveloped countries, there is widespread apprehension about the dangerous
implications of the amalgam of the power economics of the multinational corporations and
power politics . The long term primary interest is nothing but the maximization of profits for
“home” through the subsidiaries, whose innovations are also used not for the host countries,
but ‘home’. The movement for international regulation of MNCs arose from the inability of
individual countries, particularly the developing ones, to control the activities of the
corporations within their territories.
The globalization process has led to a configuration of the ways in which MNCs pursue
their resource seeking, market seeking and efficiency seeking objectives. Globalization
polices of firm require following complex integration strategies under which firm split up
the production process into various specific activities or segments of these activities with
each of them carried out by subsidiaries in locations best suited to the particular activity.
This process creates an international intra-form division of labour and a growing integration
of international production networks. But on the whole MNCs are phenomenon of the
twenty century and to a large extent latter of the second half of the twentieth century.
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REFERNCES:
- Lake David A., The State and International Relations
- Huntington Samuel P. ( 1973), Transnational Organizations in World Politics, World
Politics, Vol. 25, No. 3, p. 333-368
- https://dergipark.org.tr/tr/download/article-file/19401
- https://shodhganga.inflibnet.ac.in/bitstream/10603/219772/7/07_chapter%201.pdf
- https://shodhganga.inflibnet.ac.in/bitstream/10603/148918/9/09_chapter%202.pdf