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Chapter 13 Political and Economic Institutions
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Some multinationals are so successful that their products are widely (and illegally) copied. Here, a “faked” Nike athletic shoe is readied for sale in Shanghai, China.
amount of income inequality. Multinationals, these critics note, rely on inex- pensive labor or abundant raw materials in developing nations while returning their profits to corporate headquarters and shareholders in rich nations. Multinationals’ domination of their industries has made it difficult for the eco- nomically developing nations to establish new companies that can compete with the multinationals. As a result, multinationals may slow rather than pro- mote economic development in these nations.
Section 4 Assessment
1. Discuss limited liability and limited control in relation to the modern corporation.
2. Describe the influence of the corporation in the world today. Identify some of the benefits and negative consequences for society.
Critical Thinking
3. Drawing Conclusions Would you rather work for a large,
“The modern corporation is a political institution; its purpose is the
creation of legitimate power in the industrial hemisphere.
Peter Drucker management author
multinational corporation or for yourself as an independent businessperson? Explain your choice.
“
