Sovereignty of the State and Multinational Corporations in the Essay

Sovereignty of the State and Multinational Corporations in the Post-Second World War Western Economies - Essay Example MNCs are such that they are subject primarily to the rules of the home state and based on that submission, they are able to gain the credibility and credence to enjoy all the support and benefit the country has in the international community (Bousseba & Morgan, 2014). The Home State has the power and authority to regulate the activities of these MNCs and set up laws that can control and impact upon their affairs both locally and internationally (Scott, 2012). The Home State of an MNC also has the obligation to provide support services and assistance including a properly coordinated chamber of commerce system and all the vital diplomatic support necessary to achieve results in the foreign markets. International regulations have their roots in the 1945 United Nations Charter which gave impetus for the formal recognition of numerous multinational organisations which set up various rules and regulations governing international trade. These rules are not absolute, neither are they strictly enforced. This has given room for most multinational entities to tilt towards a trend of self-regulation (Haufler, 2013). This implies that to a large extent, most of the rules and regulations regarding what MNCs should do in the international front are moral rather than legal. Thus, there are numerous options and opportunities for these MNCs to disregard important regulations and carry out activities on their own accord. In spite of this, the international legal framework is not as non-functional as it might seem. Some authorities argue that in some specific sectors like banking, there is global coordination and international rules are highly advanced and functional (Grubel, 2009). This is due to the fact that these sectors are considered vital and there are effective international community organisations that set up rules that they apply significantly in most contexts and situations (Ruggie, 2014). However, in an overall sense, it can be stated that multinational corporations