DVM 1100 B Term Paper

Sam Anderson 5608595

Mahmoud Masaeli

MNC Behavioral Analysis

The practice of international relations has evolved significantly over the past 50 years in ways

that have not been fully digested or even acknowledged by IR theory. The waning of modernity

has seen the rise of new forms of process and new forms of power clustered around globalizing

capital and the multinational corporation. The theoretical approaches of realism and neo-realism

barely recognize this strange new landscape and pay little attention to its central player. More

and more evidence is accumulating, however, to suggest that, in fact, it is the nation state (or its

political elite) that is increasingly under the influence of MNCs. For example, in the United

States, public policy has now virtually ground to a halt as democratic demand for social,

ecological and economic reform is successfully stymied by a political elite awash in corporate

money. The penetration of the political structure operates at multiple levels. To campaign for

political office in the US requires an extremely large sum of money most of which is donated by

wealthy corporations. In addition, there are armies of paid lobbyists working on behalf of these

corporations to influence the policy of elected officials. Furthermore, those occupying dominant

positions in government administration and those holding prominent offices in multinational

corporations are often the same individuals, cycling back and forth despite the conflict of

interest. In the case of weak or failed states, all that is required for a MNC to gain access to

lucrative resources in complete disregard for the rights and needs of the nation’s citizens is a

corrupt, desperate or impoverished “bridgehead” elite.

The MNC is not just relatively new as a major actor on the international stage; it is a radically

different kind of actor operating according to principles that are incomprehensible to an entire

strain of modernist thinking based on premises of a centralizing, standardizing or regimenting

rationality. In defiance of traditional notions of the sovereign, hierarchically organized nation

state, the MNC increasingly seeks to achieve its goals through forms of organizational

heterarchy, relying on a diffuse network of power and cooptation (of the values or symbols) of

opponents. While the MNC is certainly reductionist in its profit motive and in its fundamental

ontological stance (the world as “standing reserve”), it shows an infinite flexibility and

adaptability when it comes to creating innovative technical solutions to previously

unencountered problems. (One excellent example is the disturbing new model of resource

exploitation that responds to chronic political instability through the military-economic

“enclave.”) As well, MNCs are decreasingly inclined to be associated with any particular product

or to be encumbered by structures limited to the extraction, production or distribution of

particular products. More and more MNCs wish to exist as, and exert their influence through, the

symbolic associations of a logo to which they can attach a completely heterogeneous set of

products, lifestyles and values.

None of these radically new behaviors by a growingly dominant international actor can be

understood by traditional IR theoretical approaches like Neo-Realism or Neo-Liberalism.

Focusing on the self-interested behaviors of nation states almost exclusively, these accounts fail

to grasp the level of infiltration of state power structures by MNCs and the new diffuse

configurations of power only now appearing as a result. By creating multiple parallels between

the philosophical postmodern schools of thought and examples of MNC behavior I intend to

demonstrate that the contemporary MNC’s behavioral patterns in our current international

system are best understood through the theoretical approach of philosophical postmodernism.

Postmodernism began neither as an approach to international relations nor as a school of

philosophical thought. It first emerges as a form of literary criticism and as a literary style in

which “conventional expectations of fiction – linear movement, realistic representations, and

closure” – are denied (Russell, 71). As a set of literary techniques, postmodernism’s “ontological

skepticism, foundational indeterminacy, and overwhelming lack of cognitive certainty” (Martin,

10) resolves into an ungainly constellation emphasizing “pastiche, blackness; a sense of

exhaustion; a mixture of levels, forms, styles; a relish for copies and repetition; a knowingness

that dissolves commitment into irony; acute self-consciousness about the formal constructed

nature of the work; pleasure in the play of surfaces; a rejection of history” (Martin, 6). One

example of such technique would be Paul Auster’s post-modernist detective novel City of Glass

in which the author Paul Auster appears as a character in the story playing himself with no

awareness of the paradox. The point is to emphasize that the “unified ego” of western theory and

culture is really a diffusion or system of disconnected presentations.

This unconventional writing style and form of textual criticism is elaborated over the course of

the 60’s and 70’s into a set of philosophical insights by vanguard postmodernist thinkers like

Foucault, Lacan, and Derrida. In the broadest sense, post-modernism is a style of thought that is

“synonymous with […] radical skepticism or anti-foundationalism” (Martin, 2). Its core, that is,

revolves around “…a rejection of the idea that there are foundations to our system of thought or

belief, that lie beyond question, that are necessary to the business of making value judgments”

(Martin, 3). As such, one of its central concerns is to dismantle the Platonic/Christian notion of a

“transcendental signified” from which conclusions about stable origins or presences can derive

(Russell, 72). By contrast, philosophical postmodernism “opts for chaos and a sense of

dislocation” (Martin, 5). Ontological “authority is rejected in favor of the intrusion of the

unpredictable” and the irretrievably different -- difference which opens up a space for “diffusion

of the ego, radical irony, self consuming play, and entropy of meaning” (Martin, 5).

When the insights of literary postmodernism finally cross over into IR theory, a number of

parallels immediately become apparent. Where literary post modernism challenges the traditional

boundaries between fiction and non-fiction and between literature, science and philosophy, post

modernism in IR theory attacks the distinction between IR and political science and between the

domestic and the foreign. Where literary postmodernism challenges the idea of the “text” as a

unified, homogeneous whole with both a determinate structure and foundational thematic,

postmodernism in IR theory assails the concept of the state as providing a similarly

unproblematic and secure starting point for reflection. Finally, where literary post modernism

challenges the idea of the “author” as the source of consistent, dependable and coherent agency,

postmodernism in IR theory exposes the concept of sovereignty as an artificial construct

necessary only as a locus for predictable decision making and for the attribution of moral and

legal responsibility. Now, whether or not any of this translation from the literary to the political

is legitimate at the level of general theory or in the discussion of the state and sovereignty, the

insights of postmodernism do seem to be particularly revealing when applied to understanding

the nature and actions of another international actor – the MNC. MNCs do not seem to

recognize boundaries -- ontological, cultural, linguistic or of any other kind. Unlike the state,

they do not have an inside and an outside or a domestic aspect to be balanced against a foreign

aspect. Again, the MNC does not seem to seek a determinate structure or foundational thematic.

Nor does it seem particularly concerned with the kind of centralized control and command that

would produce an integrated agency making predictable decisions. Hence, if the actions of

MNCs move to the forefront of international interest, it is through postmodernism that the future

of international relations will be properly assessed and understood.

James Ferguson’s article “Seeing Like an Oil Company” attacks the idea that the simplification

and conformity strategies of centrally planned states (such as communist China or Soviet Russia)

find a parallel in the business approach of the multinational corporation. Unified by the profit

motive, the activities of global capitalism are identified, accordingly, as a leading force for

cultural and economic homogenization. Ferguson, in contrast, will argue that it is no longer the

case that global capitalism requires an orderly or stable environment in order to thrive. The

bureaucratic rationality employed by past developing states is no longer an accurate guiding

framework for the activities of contemporary corporations especially in an era of power

transition between the eroding nation state and the numerous non-state actors that so easily

transcend national borders. In fact, with newly developed enclave type resource extraction, the

multinational is capable of thriving more efficiently in chaotic regions by separating the enclave

as much as possible from the nation state geographically and politically. The idea of enclave

extraction is that a nation state (such as Angola) sells the rights to a resource to a corporation that

will set up a walled development around the area of interest flying in all required infrastructure,

machinery, foreign contract workers, and private security (Ferguson, 379). This essentially

bypasses the old colonial model that exploited resources and destroyed natural environments

while creating some jobs and supplying some elements of economic infrastructure and

governmental order for a participant population. Enclave colonialism, in contrast, takes

advantage of the remnants of a failed state which the MNC easily infiltrates through corrupt

elites. These elites prosper while relieving the MNC of any responsibility toward the population

at large. The wealth remains bottled up at the top so that “the result is not the formation of

standardized national grids, but the emergence of huge areas of the continent that are effectively

‘off the grid’” (Ferguson, 380). From the standpoint of postmodernism, one can not think of a

better way to rewrite the ‘text’ of Africa so that it reflects “pastiche, blackness; a sense of

exhaustion; a mixture of levels, forms, styles; a relish for copies and repetition; a knowingness

that dissolves commitment into irony; acute self-consciousness about the formal constructed

nature of the work; a rejection of history” (Martin, 6).

Postmodernist Robert Walker, attacks the theoretical underpinnings of the nation state by

deconstructing the concept of sovereignty. Walker, who focuses on the “discursive construction

of reality,” is influenced by recent sociological thinking. He claims that neither external objects

nor abstract universals have any intrinsic significance or meaning. Meaning depends entirely on

symbols or linguistic signifiers created by social interaction and group expectation. Walker first

criticizes state sovereignty in a theoretical context (a theme reiterated by Lynn Doty), where he

asserts that power is not something that is grounded, centralized and emanating outwards from

its source. Instead authoritative use of power is sanctioned and formulated as a discursive

practice that “… is not traceable to a fixed and stable center, [such as] individual consciousness

or a social collective. Discursive practices that constitute subjects and modes of subjectivity are

dispersed, scattered throughout various locals” (Doty, 302). Hence, the traditional notion of

sovereign authority as something grounded (in God, or reason or nature) and locatable (in

constitutions and institutions) and giving rise, thereby, to the legitimate use of power is, for

Walker, “less an abstract legal claim than an exceptionally dense political practice.”

In David Campbell's book Writing Security: United States Foreign Policy and the Politics of

Identity we find an attack on the traditional ontological premises of state identity. The idea of a

stable, enduring state identity that is defined by its people and significant actions is to be refuted

by Campbell’s appropriation of specifically postmodernist concepts. Campbell argues that the

state’s identity has no subsistence other than through the discursive system of relations in which

it is involved. Campbell writes: the state “... has no ontological status apart from the various acts

that constitute its reality”; “the identity of individual states is not given in some founding act, but

is regularly reproduced and regulated through a discursive economy” (Campbell, 9-10). Hence,

states’ identities are never fully realized and defined; they “...are (and have to be) always in a

process of becoming” (Campbell, 12). Campbell's assessment (that the identity of the state is

subject to infinite revision through external affects) may be substantially correct from the

standpoint of IR theory. But by that very fact, it remains entirely one-sided. Campbell's analysis

does not include any of the internal or domestic structural influences that play a decisive role in

the formation of state identity. Domestic factors such as the structure of the family, ethnicity,

modes of production, religion, language, history, shared symbols, legal and cultural institution,

etc., all contribute to anchoring a state’s identity on the side of ‘what it is’ as opposed to ‘what it

is not yet’. But while Campbell's model of identity formation appears to be deficient when

applied to the nation state, its weakness appears as its true strength when applied to the MNC.

The MNC is much less vulnerable to the characterizing and shaping forces of an ‘inside.’ No

MNC is identified (let alone hampered) by issues of language, ethnicity or religion. These

elements sit in perpetual suspension as the MNC continually reinvents itself within the global

marketplace. The MNC, then, is a much better fit for Campbell’s theory and Campbell’s theory

an excellent explanation of the MNC’s unconventional identity.

In Naomi Klein’s book No Logo, we encounter an exploration of the evolution of product

marketing. At the beginning, marketing existed only as the branding of a product with a logo or

mascot. Over the course of the 20th century, however, we see a progression toward the marketing

of meaning itself in the form of an idea or lifestyle images completely divorced from any

particular product (Klein, 37). When observing some of the wealthiest and most well-known

MNCs, we see a kind of free-floating transcendence into a sphere where the material commodity

is no longer of concern. In the case of Nike, for example, the major focus is only on intellectual

property (the Nike lifestyle) for the corporation no longer owns any physical factories or

distribution networks. All Nike products (or should we call them avatars or simulacra of the

logo) are manufactured in foreign, enclave style sweat shops where factory owners compete to

supply the Nike brand. It is through these foreign, dispersed and ever-shifting contractors (who

in turn hire their own subcontractors) that North American is supplied with Nike simulacra

(Klein, 203). From the standpoint of postmodernism, one can not think of a more illustrative (or

more unfortunate) instance of the withering away of determinate structures of production in

favour of discursive practices that “are dispersed, [fluid and] scattered throughout various locals”

(Doty, 302).

In Anne-Marie Scheidegger’s article “Organizational Structures in Multinational Corporations

from the Perspective of Global Communication Networks” we find a discussion of the

inadequacies of bureaucratic hierarchies in light of telecommunications advancements –

advances that are increasingly moving enterprises toward network based, “adhococratic” and

“heterarchical” forms of organization. As the world’s interconnectedness increases through

social networking and a free flowing internet, the bureaucratic organization is being undermined

because it “…relies on restricted communication and the monopoly of knowledge, whereas

computer-mediated communication networks facilitate communication and distribute knowledge

across the entire organization” (Scheidegger, 6). According to Scheidegger, “bureaucracy is

based on hierarchical chains of command, specialization, uniform rules, standard procedures, a

career of advancing up the ladder, impersonal relations, and coordination through the boss”

(Scheidegger, 15). These principles are now in jeopardy because “corporations have to cut

product development time in half to survive in the market [and] hierarchical chains of command

take too much time.” This, in Scheidegger’s opinion, is pushing MNCs toward forms of

organization that are flexible and “efficiently redundant” in the sense that each branch, node or

sector possesses the information necessary to reconstruct the whole and can thereby decide

where, how and with whom it can make the best contribution to solving group problems

(Scheidegger, 16, 42). Scheidegger’s case study for her argument is the Swiss pharmaceutical

giant Roche. This is a perfect Janus-faced model for both the emancipator and relativizing

aspects of postmodernism. Scheidegger may celebrate Roche as a new bastion of heterarchical

creativity, but Roche’s public record for breaking anti-competition laws and for harassing

dissident employees illustrates how “efficient redundancy” it still ultimately subject to the

singular goal of economic profit.

Work Cited

Russell, Alison. “Deconstructing The New York Trilogy: Paul Auster’s Anti-Detective Fiction.” Critique 31 (Winter 1990): 71-84

Martin, Brendan. Paul Auster’s Postmodernity. New York: Routledge, 2008.

Campbell, David. Writing Security: United States Foreign Policy and the Politics of Identity, revised (edn), Minneapolis, Minnesota, University of Minnesota Press, 1998.

Doty, Lynn.‘Foreign policy as social construction’, International Studies Quarterly 37 (1992).

Walker, R.B.J. Inside/outside: International Relations as Political Theory,Cambridge, Cambridge University Press, 1993.

Ferguson, James. “Seeing Like an Oil Company: Space, Security, and Global Capital in Neoliberal Africa”, American Anthropologist 107, 3 (2005).

Klein, Naomi. “No Logo”, Great Britain: The Flamingo, 2000.

Scheidegger, Anne-Marie. “Organizational structures in multinational corporations from the perspective of global communication networks: Postmodern literature analysis and case study”, Institut für Organisation und Personal, Matr.-Nr.: 91–104–638, Bern, 20. Mai 1997.