| Description |
This honors project seeks to explain how a state can avoid the negative consequences that can arise when its corporations leave its borders to establish operations in another state. When a corporation invests abroad it becomes multinational. Multinational corporations tend to cause much chaos for the power structure in the international system. Specifically, it is prone to diffusing technology around the world and allowing others to utilize the technology that was so difficult to create. This paper contends that only through a careful program of fusing the interests of the multinational corporation with the interests of other domestic firms and the state itself, will a state be able to avoid loss of relative power that occurs through technology transfer. This project is organized in the following manner. It describes the nature of the international world, how anarchy drives states actions, and what power means to states. It also describes how multinational corporations can be a power resource, and how they conduct operations around the world. It addresses the ways by which the home and host state can benefit from foreign direct investment and associated activities of multinational corporations. The paper details how the Japanese system is unique from all other multinational corporations, and how this provides specific benefits and consequences for Japanese multinational corporations. It contends that the keiretsu system, which conglomerates many firms into one umbrella organization, is the main reason behind Japan's ability to guard its technology and secrets. The keiretsu protects technology by limiting access to it by outside sources. It keeps technology and knowhow within the confines of Japanese controlled firms. The conclusion addresses how, specifically, the Japanese keiretsu system is able to avoid the levels of diffusion of technology that are more common to other states' multinational corporations. It advocates a move to a more Japanese-styled system for any state that wishes to limit technology transfer, which has a great impact on the relative; power that a state possesses. |
