Multinational enterprises date back to the era of merchant-adventurers, when the Dutch East India Company and the Massachusetts Bay Company traversed the world to extract resources and agricultural products from colonies (Gilpin 278-79). While contemporary multinational corporations (MNCs) do not command the armies and territories their colonial counterparts did, they are nevertheless highly influential actors in today’s increasingly globalized world. Gilpin discussed the MNC’s evolution through the lenses of a number of business economic theories. Using Raymond Vernon’s Product Cycle Theory, the overseas expansion of American companies until the 1960s was shown as a means of preempting foreign competition and preserving monopoly positions, which was possible then because of the wealth and technology gaps that existed between the US and the rest of the world (282-83). Following the closing of such gaps, Dunning and the Reading School’s Eclectic Theory explained the next stage of the MNC’s evolution as propelled by the great leaps made in technology and communication, which made internationalized management both possible and viable (283). Michael Porter’s Strategy Theory, meanwhile, asserted that the MNC is now in the era of strategic management, wherein activities and capabilities spanning borders allow it to “tap into the value chain” in the most advantageous positions (285-85). Gilpin made an interesting point, however, that MNCs are oftentimes the result of market imperfections and unique corporate situations. In many instances, the decision to expand a firm’s operations in another country was a means of circumventing protectionist measures and trade barriers, or simply to curry favor with governments, as practiced by IBM (280... ... middle of paper ... ...e citizenry of negotiating nations (locations 3523-27). The negative externalities caused by MNCs are most visible in the damage that has been inflicted on the environment. The Exxon Valdez oil spill and the Oki Tedi toxic waste dumping are just two examples of MNCs causing serious harm to the environment, whether by accident or as a business strategy. Environmental damage can have devastating effects not just on the community an MNC has situated itself in but also potentially on the rest of the world as the effects of environmental degradation, much like globalization, spans borders and territories, as well. Bibliography Gilpin, Robert. Global Political Economy: Understanding the International Economic Order. Princeton: Princeton University Press, 2001. Print. Stiglitz, Joseph E. Making Globalization Work. New York: Norton & Company, Inc., 2007. Kindle ebook file.
Dennis Pirages and Christine Sylvester (eds.), Transformations in the Global Political Economy (London: Macmillan, 1989).
Rugman, A. M. & Verbeke, A. (2004). A Perspective on Regional and Global Strategies of Multinational Enterprises. Journal of International Business Studies, 35(1), 3-18.
A multinational corporation is an entity that its headquarters is based in one country and incorporates a group of organizations that are geographically distant and have various goals. "Such an entity can be conceptualized as an inter-organizational network that is embedded in an external network consisting of all other organizations such as managers, customers, suppliers and regulators"(Ghoshal & Barlett, 1990). As the organizations develop and find their way into significant growth they are inclined to identify the goals, perspectives, assimilation, and rules of their framework. The role of the managers in such entities is to coordinate organizations that work in various cultures and environments, in which the levels of involvement, diversity,
The Globalization Reader. 2011. Fourth Edition. Frank J. Lechner and John Boli, eds. Malden MA: Blackwell Publishing.
Multinational Corporations (MNCs) can be defined as a business organization in which the production activities, the distribution facilities, and the other assets are located at least in more than one country. The activities of MNCs also play important roles in supporting economic in this globalization era. In this current globalization trends, it can be accounted for by developed economies integrating with developing economies by means of Foreign Direct Investment (FDI), the reduction of trade barriers, and also the other economic reforms. Economic globalization can be referred as the
(MNCs of multinational corporations) can operate `geocentrically', planning the location of their production and the pattern of their investment according to the balance of advantage across the whole capitalist world economy. For example, in the short-term these geocentric MNCs have the ability to increase the level of production in one country at the expense of another and in the longer term they could even shift the entire balance of their production between countries.
Multinational enterprise (MNE) is “a company that is headquartered in one country but has operations in one or more other countries” (Rugman and Collinson 2012, p.38) that has at least one office in different countries but centralised home office. These offices coordinate global management in the context of international business. MNEs have increasingly essential influence on the development of the global economy and coordinate with other companies in different business environments. However, there are many issues involved with how MNEs operate well overseas, especially in emerging markets (EMs) (Cavusgil et al., 2013, p.5).
According to Hodgetts and Luthans, a multinational corporation (MNC) is "a firm that has operations in more than one country, international sales, and a nationality mix of managers and owners (2003)." When dealing with multinational corporations and the field of international business management there are four primary areas that must be taken into consideration; they are the following: country environment, culture, organizational strategy, and organizational behavior (Hodgetts, 2003). All companies seeking to establish operations on a global or multinational level must be aware of these four areas and be prepared to make allowances and adapt to the incessant and constantly changing demands of the international business world (Hodgetts, 2003).
Crane, George T., and Abla Amawi. The Theoretical Evolution of International Political Economy: a Reader. New York: Oxford UP, 1997. Print.
Multinational business enterprises have had a big impact on the global economy over the years because of their operations in many countries. This has meant that these businesses have had a major influence on investment patterns and economic activities globally because of their wide branches of networks that defy geographical and political boundaries (Meteer, 2004). The multinationals have been forced to improve their business processes within the locations they operate in collaboration with their employees at designated locations.
.... Gilpin, Robert. (2003). International Political Economy. Part1, Contending views of International Political Economy. Lynne Rienner Publishers, Inc. Colorado.
Whether globalization is a force of good or evil has become a highly contested issue throughout the world. The proliferation of economic globalization has been advocated for with the claim that a greater socioeconomic integration and collaboration among countries will increase the living standards of both the rich and the poor. However, as Stiglitz indicates in the book Making Globalization Work, while it is true that globalization has enormous potential to make the world a better place, what is problematic is the amalgam between politics and economics that has shaped globalization resulting many losers and few winners. This paper will aim to show that on the one hand economic and corporate globalization are not the great evil portrayed by Wayne Ellwood in The No-Nonsense Guide to Gobalization, but neither can globalization and free trade be equated with increased living standards for all. Instead, the potential of globalization must be acknowledged, though one must take into account the negative impact it has had on the world and look for ways in which it can be improved as argued by Joseph Stiglitz.
Cohn, Theodore H. Global Political Economy: Theory and Practice. New York: Pearson Longman, 2008. Print.
Firstly, let us examine the statement of Nolan to gain a broader view on today’s international business. In this statement, Nolan argues that firms from developing countries have less power to change the situation of the world business and cannot fully involved in significant changes in the global market. However, this does not take into account the fact that the global market is actually changing. This is the main reason why I cannot agree with Noran’s statement fully, and by changing it means the global landscape is no longer only consisted of multinational companies from developed countries, it is also of domestic market leaders from emerging economies. According to Mathews (2002), by the end of 1990s, there were over 60,000 firms operating internationally. These firms of course include traditional multinational enterprises (MNEs) such as the GMs, IBMs, Siemens and Unilevers which have vast resources and operations in more than 100 countries. However, also they do include smaller firms from developing countries which have passionately pursued internationalization over the past decade and gradually acquired global reach. There are several firms from late-developing countries such as Li&Fung from Hong Kong or the Hon Leong Group from Singapore and Southeast Asia that could be good examples, and let us focus on Acer from Taiwan
According to Robert J. Carbaugh (2011), the high degree of economic interdependence among today’s economics reflects the historical evolution of the world’s economic and political order. At the end of World War II, the United States was economically and politically the most powerful nation in the world, a situation expressed in the saying, “When the United States sneezes, the economies of other nations catch a cold.” But with passage of time, the U.S. economy has become increasingly integrated into the economic activities of foreign countries.