Megacorpstate
The most prominent organizations within the structure are OPEC and the Seven Sisters that include Exxon, Mobil, Socal, Royal Dutch-Shell, BP, Texaco and Gulf.
He recognized a strong alliance present between the monopolistically powerful multinational oil corporation groups and nation states.
[1] Stephen Hymer, influential Canadian economist, also researched on the activities relating to multinational corporate firms and their growth.
[5] Through his research, he deduced the growth factors and processes by which small firms evolved into giant multinational organizations.
[6] By taking small United States firms into consideration, Hymer explained the stages a company passed in order to reach hierarchy in the market.
Stephen Hymer observed the historical pattern of those U.S firms which, developed from small workshops to factories to national organizations.
The member organizations Exxon, Mobil, Socal, Royal Dutch-Shell, BP, Texaco and Gulf held dominance over 85% of the petroleum reserves until the 1970s.
It was established in September 1960 in Baghdad by five founder nations, Iran, Iraq, Venezuela, Saudi Arabia and Kuwait.
The initiative was taken to promote economic enrichment and stability among its member nations and to decrease the oil market volatility.
As of May 2017, the organization consists of 14 countries which earn the majority of their income through oil revenues: Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia (the dominant exporter), United Arab Emirates, Venezuela.
According to OPEC, membership is open to any nation that has substantial oil resource and observes the same principles as the organization, subject to approval by the member governments.
One view discusses that OPEC acts as a single entity and makes the final decision on prices after the members have negotiated among themselves.
Another view suggests that a decision is reached after negotiations have been made among small and large shareholders after considering supply restrictions and rationing.
Some have proposed that the intention behind lower prices is to reserve the oil for future investments or as an alternative to generating current revenues.
If the organization decides to adjust supply to increase revenues, the nation states will benefit from temporary gain and simultaneously give rise to macroeconomic variation.
In support of their views, they argued that the organization would become more unstable with expansion and each member would be determined to increase output and discount prices according to its preference.
[1] The Megacorpstate has been successful in manipulating the oil prices around the world due to the relationship between the OPEC and the multinational giant corporations.
