Maxwell Chipulu and Udechukwu Ojiako Mapping the Perception of Abuse of Economic Power by Multinational Companies (MNCs) in Asymmetric Partnerships across the Globe Maxwell Chipulu and Udechukwu Ojiako

Background This paper is taken from a larger project: The core project aim is to establish the effect of level of information about unethical behaviour of MNCs on consumer behaviour across the globe

This Paper: Research Questions What is the extent of the perception of MNC abuse of power around the globe? Is the perception of MNC abuse of power related to activism/boycott against MNCs?

Asymmetric Relationships: The Power of MNCs A ranking order of the 2010 gross domestic product outputs of countries (World-Bank 2011) alongside the annual turnover of large corporations (Forbes- Magazine 2011) shows that, of the top 100 countries/corporations, 41% were corporations By World Bank gross national product (GNP) classification, the home countries of the world’s 100 largest corporations were ‘high’ income countries, with three exceptions: China, Russia and Brazil. But all top-100 corporations were multinational. They all run operations in ‘low’ and ‘lower-middle’ income countries

An Instructive Example of MNC Abuse of Power In 2006, a ship owned by the Amsterdam-based MNC Trafigura was reported to have dumped toxic waste off the coast of the Ivory Coast (Polgreen 2006); Trafigura’s lawyers obtained a super-injunction in the UK courts to stop the press reporting the incident Trafigura is little known by the UK consumer. It is, however, listed in the FTSE in the London

What Drives Protest? Literature The key driver (and moderator of other factors) of willingness to protest against corporate behaviour is the perceived level of the egregiousness of the corporate’s behaviour Klein, J. G., C. N. Smith, et al. (2004). "Why We Boycott: Consumer Motivations for Boycott Participation." Journal of Marketing 68 (July 2004): 92-109.

Data Collection Between March 2010 and December 2011, survey data were collected from randomly selected people via two channels : A web-based survey Direct distribution of hard-copy surveys in Brazil, Kenya, Nigeria, India, China, Taiwan and the UK. 1601 responses used for this paper, of which 596 were collected from the web-based survey and 1005 from direct distribution A total of 80 countries represented in the survey

Survey Variables Survey Item Variable Extracted Please state your gender Gender Please state your age (number of years at your last birthday) Age Please state your nationality (country of birth or if not living in country of birth, the country where you have lived for the majority of your life) Country I am concerned about the effect of globalisation on developing countries Items summated ( α =0.82 ) to form 'MNC_concern' I often wonder if multinational companies treat their business partners in developing countries fairly I often wonder if multinational companies treat workers in developing countries fairly I have boycotted the products of multinational companies that have been found to have behaved irresponsibly Items summated (α = 0.74) to form 'militancy' I have taken part in online protests (e.g. on Facebook) against multinational companies that have been found to have behaved irresponsibly I have personally taken part in protest marches against multinational companies that have been found to have behaved irresponsibly

Model Hierarchical log-linear model Variable Description Militancy Activism/boycott against MNCs perceived to have behaved at least asocially; 0 = disagrees; 1 = 'agrees' MNC_Concern Concern about how MNCs relate with local partners in the developing countries; 0 = disagrees; 1 = 'agrees' GNI_Group World bank income group of country: 1 = Low or lowwer middle; 2 = upper middle; 3 = high Gender Male or Female Final model: All two-way interactions significant

Results Everything else being equal: Twice as many people as would have been expected had taken part in activism/protest against MNCs But less than half as would have been expected were ‘concerned’ about the behaviour of MNCs Differences between men and women were statistically significant but marginal People from ‘upper-middle’ and ‘high’ income economies were more likely to be both concerned about the behaviour of MNCs and to have taken part in activism/protest against MNCs

Discussion… What do you think are the implications of these results?