Legislative attempts to regulate the flow of data have created a multitude of problems for some MNCs, particularly in service industries such as banking, transportation and shipping, and construction, where data processing and information creation and use are essential. Even though new technological developments have or may soon render some legislative constraints obsolete, it behooves the MNC manager to keep them in mind when designing a global information system.
Political and legislative interest in data processing and transmission of data across national borders began with the recognition that information is a vital ingredient in corporate and government decision making. In the words of Louis Joinet, French Magistrate of Justice,
Information is power, and economic information is economic power. Information has an economic value, and the ability to store and process certain types of data may well give one country political and technological advantage over other countries. This, in turn, leads to a loss of national sovereignty through supranational data flows. 1
Legislative efforts were first directed toward ensuring personal privacy and safeguarding the rights of individuals regarding the collection, processing, storage, dissemination, and use of personal data. Grub and Settle recommend that the ten essential principles of privacy listed in PRINCIPLES OF PRIVACY govern an MNC's treatment of data on private citizens.
At the nation-state level, privacy has become a national sovereignty issue. Many countries attribute a loss of the ability to set their own policies and laws to their lack of control over the inflow and outflow of information.
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