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Multilateralism and the Multinational Enterprise

Published online by Cambridge University Press:  20 January 2017

Thomas C. Lawton ,
Johan P. Lindeque  and
Steven M. McGuire
Thomas C. Lawton
Affiliation:
Cranfield University
Johan P. Lindeque
Affiliation:
Queen's University - Belfast
Steven M. McGuire
Affiliation:
University of Bath
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Abstract

How do multilateral institutions influence the strategic choices and actions of international managers? This paper addresses the question by exploring the impact of the World Trade Organization's (WTO) decision-making process on multinational enterprises (MNEs). We discuss the three phases of the WTO decision-making lifecycle - the formulation of trade rules, the implementation of those rules, and the enforcement of the rules – and propose a strategic adjustment framework for understanding how companies alter their strategies and structures in response to the WTO's rules and operations. We argue that the increased relevance of multilateral rules and enforcement mechanisms – embodied in the WTO - is an important influence on MNE strategies and structures because of the increasing embeddedness of the WTO in national levels of regulation. We illustrate this through examples taken from the pharmaceutical, textiles and sugar industries sectors that have witnessed substantial multilateral regulation.

Keywords

multinational enterprisespharmaceuticalstextilessugarWorld Trade Organization
Type
Article
Information
Business and Politics , Volume 11 , Issue 2 , August 2009 , pp. 1 - 26
Copyright
Copyright © V.K. Aggarwal 2009 and published under exclusive license to Cambridge University Press 

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