Transnational corporations to infringe on the autonomy and
push the boundaries of the country is stereotypes created as a
misunderstanding. Authorized trading companies in the past, such as East India
Company and Hudson Bay Company, have been interconnected and made important
contributions to economic development around the world. They are today an
international scale, the ancestor of companies. However, the last 50 years the
number of tnc increased exponentially. ‘Even if you don't own more than one
power that can control and adjust the operating companies in the country’ is
the most comprehensive definition of the tnc. Due to the complex relationship
between business and qualitative properties in comprehensive terms, it is
impossible to define. The TNC accounts for about one-tenth of the world's GDP,
and generates one-third of the total exports. The majority of the world's 100
biggest tnc still maintains more than half of its production. TNCs exist in
various forms, but in common they interact with each other in a combination of
political, social and cultural settings.
The activities of the TNC can be summarized into two
categories: market-oriented investment and asset-oriented investment. The size
and nature of TNC's corporate realignment market continue to influence. The
specificity of a particular market may require a direct presence to understand
and respond to certain situations. Geographic imbalances in the market are one
of the main reasons why companies participate in multinational investments.
There are two main ways for a company to carve out a multinational market. One
is a 'Greenfield' investment and the other is a method through acquisition with
another company or through some form of strategic cooperation. Greenfield
investment simply refers to the construction of a completely new facility. The
inventory of the production of the enterprise itself and the addition of it to
the countries and communities in which it occurs. This is generally the most
preferred type of investment by the host country, but greenfield investment is
not the usual way for TNCs to expand abroad. Building a completely new,
substantial facility is a way for businesses to take risks. That is why
companies prefer to enter foreign countries through cooperation with companies
that dominate the existing market.
The order of market development of a typical tnc as follows
: First, an independent domestic sales overseas export directly using an agency
services. Second, domestic demand tnc as its overseas sales to overseas markets
by establishing a control. The location and area is still in behaviour and the
company's production still important. All geographically broad range of every
business, including the company has cognitive and cultural, social, political
and economic complex embedded attributes the dominant role.Produced through the
process. As a result, tnc is unique as the owner of these characteristics to
achieve the results of the national and regional specific characteristics of
the position of the society and interaction.
So, like most companies, TNCs can be considered a network
dense in the center. There is a wide variety of ways in which the internal
network of the TNC is organized and geographically constructed, and how
customers connect to the external network. Diversity is affected by some
industrial environments run by the company, such as a specific history of the
company, cultural and administrative legacies in the form of recognized
practices built over a certain period of time, competition in character and
complexity, technology and regulatory structure. Depending on the nature of
geographical distribution dispersed in different political, cultural and social
environments, TNCs are much more difficult to coordinate and control than
enterprises with limited brass in a single national space. In other words, more
sophisticated organizational structures are needed. The TNC has many
geographical options for production activities. One is to focus production in
one place. Concentrated production worldwide creates economies of scale, but it
increases transportation costs and reduces corporate knowledge of distant
markets. Second, it is produced especially for the markets of regions and
countries. The economy of scale is limited by market size. Third, make a
professional production structure for the domestic market. Finally, the
production process is subdivided and each part is placed in a different
location. transnational vertical production integration.
Transnational corporations are undoubtedly the most
important factor in the modern world economy. There is no dispute that their
importance is increasing. More companies are becoming transnational, both the
TNC and the organizational and geographic areas of the transnational production
network are very complex and dynamic.
2. Interesting point
The history of transnational companies that serve as
vanguard in economic globalization, how they pioneer or enter new markets and
how to engage in economic activities by building networks, were very
interesting and learned a lot.
3. Discussion Point
How can transnational companies reduce the adverse impact
on the domestic market, on the networks of companies and small sellers? What is
the best way to regulate them?
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