Cable urged to take urgent action to protect British interests.
Dr Cable will next month launch a wide-ranging consultation on "the murky world of corporate behaviour" including take-overs, executive pay and short-term decision making.
The ambitious review was announced as he delivered a stinging speech attacking "laissez-faire" capitalism at the Liberal Democrat conference in Liverpool.
But Birmingham MP Jack Dromey (Lab, Erdington), a member of the Commons Business Committee, said: "Words will not protect workers".
He called on the Government to introduce legislation making it harder for hostile takeovers to succeed, for example by ensuring that two-thirds of shareholders must agree to any deal.
As Deputy General Secretary of Unite before the General Election, Mr Dromey led the campaign against the hostile takeover by Kraft of Cadbury. He said: "Our economy is too open to hostile takeovers not in the public interest or the best long-term interests of successful British companies.
"It was wrong that a debt-laden American multi-national was able to stage a hostile takeover of a successful British icon, dear to the hearts of the people of Birmingham and Britain and with a great tradition of philanthropy."
Dr Cable has previously warned that too many people involved in takeover deals stand to make a profit from sales going ahead - even if the sale is not in the long-term interests of the business involved, or the British economy as a whole.
He told delegates: "Why should good companies be destroyed by short-term investors looking for a speculative killing, while their accomplices in the City make fat fees? Why do directors forget their wider duties when a fat cheque is waved before them? Capitalism takes no prisoners and kills competition."
He added: "Markets are often irrational or rigged. So I am shining a harsh light into the murky world of corporate behaviour."