International Relations: Analysis of Corporate Power Dynamics

This report provides an analysis of the key attributes of powerful companies operating in the global commercial framework, including market dominance, brand presence, and merger activities. It delves into criticisms of their power, such as lobbying and political influence, and explores the transition of these companies from market operations to exerting significant influence on economic, political, and social aspects. The report also examines the theorization of corporate political power, emphasizing the growing impact of multinational companies on public policies and services, and the need to understand corporate social responsibility and governance in this context. The document references the article from The Economist to support the analysis.

Running head: INTERNATIONAL RELATIONS
International Relations
Name of the Student
Name of the University
Author Note

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Table of Contents
Key attributes of powerful companies.......................................................................................2
Criticisms of the power possessed by big companies................................................................3
Relationship with the conceptual framework.............................................................................4
From Market to Political Power.............................................................................................4
Theorisation of Corporate Political Power.............................................................................5
References..................................................................................................................................6

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Key attributes of powerful companies
In the current period, the global commercial framework is highly oligopolistic and is
mainly dominated by a handful of immensely powerful and large companies, with
considerable resources, market dominance, clientele, competitiveness, profitability and global
presence (Popescu 2013). The main and common attributes of these companies are as
follows:
Compelling vision- The primary attribute behind the formation of most of the powerful
brands across the globe, is the presence of a well-established mission, vision and also value
statements (Doz 2017).
Strong brand presence- Most of the “Superstar” companies, have strong and global brand
presence and their brand is easily recognised by majority of the population of different
countries.
Huge market dominance- Most of the powerful companies, like Google, Apple and others, in
the current period, can be seen to mostly operate in oligopolistic or nearly monopolistic
market, with low level of competition and most of these companies enjoy huge market share,
loyal clientele and considerable dominance in the market (Heidenreich 2012).
Huge merger and acquisition activities- Most of the influential companies and global
business giants can be seen to be expanding their domain of operations and businesses in
different parts of the globe, as well as in different markets, through merger and acquisition
activities with different companies and related individuals.
Anti-competitive and predatory pricing activities- The big companies commonly pose
immense entry barriers to new comers in the markets, by utilising their economies of scale

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and efficiencies in production, which enable them to use the techniques of predatory pricing
and other non-competitive measures (Gammeltoft, Filatotchev and Hobdari 2012).
Criticisms of the power possessed by big companies
The immense power and dominance of the big companies, have also been criticised
substantially, over the years, by customers and population across the globe, of which the
primary ones are as follows:
Lobbying and political influences- One of the primary criticisms which is endured by most
of the big companies across the globe, is that many times to gain more power as well as to
achieve their own goals and personal interests, these companies engage in lobbying with
similar firms or often illegally with government officials, with considerable power and
capabilities, which in turn, creates an anti-competitive market structure, where these
companies enjoy special benefits and protections, which in turn hampers the small producers
as well as welfare of the customers in a society (Hill et al. 2013).
In response to the same, the government can engage in creating monitoring and strict
vigilance framework to eradicate any kind of adverse lobbying activities in the economies. It
can also be taken into consideration, to build a policy framework, where protection can be
provided to the small businesses, for them to sustain the level of competition faced by them
from the big companies.
Hiring of high profile politicians- One of the habits and operations of the big companies,
which have been facing tremendous criticisms across the globe, especially in the
contemporary period, is that of hiring of lobbyists as well as employment of prominent
politicians across the globe, with immensely high profile, in important posts or as advisories
in the companies (Blau, Brough and Thomas 2013). The primary reason behind the huge
criticism of this particular activity of the multi-national and big companies, is that hiring

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these prominent politicians help the concerned companies to immediately get access to
immensely crucial aspects like that of policymaking and other confidential aspects. Hiring of
such high-profile personnel with political backgrounds also help the companies to influence
the existing political parties, thereby gaining non-uniform advantages.
The same can be prevented by the governments, especially for those companies which
do not contribute to the increase in the social and economic welfare of the populations of the
countries, in any way, by imposing restrictions in the aspects of employment of the political
and ex-government officials of high responsibilities and posts in private and multi-national
companies (Economist.com 2018). However, the big companies, often counter these negative
criticisms, by providing the argument that employing these officials with huge knowledge
and political as well as policy-framing frameworks, not only benefit the companies
themselves, but also helps them in designing their product and pricing in such a way that the
overall population and their customers are benefitted considerably (Mathur et al. 2013).
Relationship with the conceptual framework
From Market to Political Power
The above discussion of the criticisms and responses to the same regarding the
different activities in the operational framework of the big and globally dominant companies
can be viewed in the aspects of the transition of the operations of the companies from sole
market operations to being more than that. In the contemporary period, the globally dominant
huge companies and multinationals, not only remain content by expanding their business
domains and market operations, thereby gaining higher number of customers, but also exert
their impacts and influence on the overall economic, political and social aspects of the
regions and countries where they usually venture (Mathur et al. 2013). The huge operational
base of the companies, along with large number of customers, huge capacity to invest and

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robust commercial and political tie-ups, help the companies to make a considerable impact on
the political dynamics of the countries. The political officials are influenced and monetarily
or non-monetarily incentivised by these companies, which in turn indicates towards the entry
and significant presence of these big and dominant companies, not only in the markets, but
also in terms of influencing the political power dynamics and operations of the countries or
regions where they venture.
Theorisation of Corporate Political Power
The above discussion about the traits of the large business organizations and their
operational frameworks, across the globe, indicates towards the fact that in the contemporary
period, the big companies and MNCs have been entering different domains except that of
market operations and one such significant aspect is that of the power of these organizations,
to influence the political domains and operations like that of public policies, deliveries of
public services considerably, often by entering into some kind of partnership with the
governments of the different countries (Julio and Yook 2012). This in turn, indicates towards
the growth of corporate states and also of political powers of the corporates, which in
comprised of corporate social responsibility, corporate governance, dominance and similar
aspects, thereby indicating towards the need to theorise corporate political powers.

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References
Blau, B.M., Brough, T.J. and Thomas, D.W., 2013. Corporate lobbying, political
connections, and the bailout of banks. Journal of Banking & Finance, 37(8), pp.3007-3017.
Doz, Y.L., 2017. Strategic management in multinational companies. In International
Business (pp. 229-248). Routledge.
Economist.com 2018. The rise of the superstars. [online] The Economist. Available at:
https://www.economist.com/special-report/2016/09/17/the-rise-of-the-superstars [Accessed 3
Oct. 2018].
Gammeltoft, P., Filatotchev, I. and Hobdari, B., 2012. Emerging multinational companies and
strategic fit: a contingency framework and future research agenda. European Management
Journal, 30(3), pp.175-188.
Heidenreich, M., 2012. The social embeddedness of multinational companies: a literature
review. Socio-Economic Review, 10(3), pp.549-579.
Hill, M.D., Kelly, G.W., Lockhart, G.B. and Van Ness, R.A., 2013. Determinants and effects
of corporate lobbying. Financial Management, 42(4), pp.931-957.
Julio, B. and Yook, Y., 2012. Political uncertainty and corporate investment cycles. The
Journal of Finance, 67(1), pp.45-83.
Mathur, I., Singh, M., Thompson, F. and Nejadmalayeri, A., 2013. Corporate governance and
lobbying strategies. Journal of Business Research, 66(4), pp.547-553.

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Popescu, G.H., 2013. Macroeconomics, effective leadership, and the global business
environment. Contemporary Readings in Law and Social Justice, 5(2), p.170.