Introduction

Multinational corporations manage relations with governments at different levels – in the home country, at the regional (supranational) level, in host countries, and, from time to time, in a coordinated fashion at the global level (see figure 14.1). The IB literature is quite extensive on MNC relations with host governments but relatively thin on how MNCs manage government relations globally (e.g., Mahini, 1988), even though MNCs have become much more proactive at working through home and host governments to change the context of control, rather than just working within a given context (e.g., see Ramamurti, 2001). In this paper, I focus on one such area, intellectual property (IP) rights, and analyze how one MNC, Pfizer, worked to change the global regulatory environment. Influencing public policy at the global level is for MNCs the ultimate challenge in business–government relations. With global economic interdependence growing, there are stronger incentives for MNCs to seek harmonized global regulations in international trade and investment, and in fields such as accounting, corporate governance, health and safety, and anti-trust.

MNCs pursue global strategies and operate in global industries but the regulations governing their operations are often national or regional in scope. Regulatory heterogeneity demands matching complexity in MNCs' strategies and operations. Just as convergence in tastes worldwide creates opportunities for MNCs to produce globally standardized products, so too convergence of regulations allows MNCs to adopt globally standardized methods of operation, which can lower costs and reduce policy uncertainty.