Modern Organisation of Multinational Enterprises and Liability Discussions: Critical Analysis of Control Theory

Abstract

The concept of multinational enterprises (MNEs) has been under examination from various disciplines in recent years. However, understandings of the concept in legal and managerial areas are fundamentally distinct from each other. This difference appears in conceptualism of the way control is applied over subsidiaries by parent companies. Theories developed for the liability of corporate groups within law are based on consideration of MNEs as vertical organisation while managerial examination reveals less-hierarchical organization. Due to this misconception of control within law, the liability problems have not been solved. Thus this article aims to identify the conflict and offer solutions to liability discussions based on the business management structure of MNEs.

Keywords: Multinational Enterprises, Limited Liability, Piercing the Veil, Business Organisation, Group Liability