Extra Posting / UN - United States / Minjeong Lee

Q. How should UN be reformed?: United States

A. The United States of America is a charter member of the United Nations and one of five permanent members of the UN Security Council. The United States is the host of the headquarters of the United Nations, which includes the usual meeting place of the General Assembly in New York City, the seat of the Security Council and several bodies of the United Nations. The United States is the largest provider of financial contributions to the United Nations, providing 22 percent of the entire UN budget in 2017 (in comparison the next biggest contributor is China with 12.5 percent, while EU countries pay a total of above 30 percent). From July 2016 to June 2017, 28.6 percent of the budget used for peacekeeping operations was provided by the United States. The United States had a pivotal role in establishing the UN.

Since 1991, the United States has been the world's dominant military, economic, social, and political power (not to mention hosting the UN Headquarters itself in New York City); the United Nations was not designed for such a unipolar world with a single superpower, and conflicts between an ascendant U.S. and other UN members have increased.

The UN has always had problems with members refusing to pay the assessment levied upon them under the United Nations Charter,[citation needed] but the most significant refusal in recent times has been that of the United States.

Further conflict between the U.S. and some UN members arose in 2002 and 2003 over the issue of Iraq. George W. Bush maintained that Iraqi President Saddam Hussein had not fulfilled the obligations he had entered into at the end of the Gulf War in 1991, namely to rid Iraq of all weapons of mass destruction (WMDs) and to renounce their further use. A series of inspections by the IAEA failed to find conclusive evidence that proved allegations that Iraq was continuing to develop or harbour such weapons.

On June 17, 2005, the United States House of Representatives passed the United Nations Reform Act of 2005 to slash funds to the UN in half by 2008 if it does not meet certain criteria. This reflects years of complaints about anti-American and anti-Israeli bias in the UN, particularly the exclusion of Israel from many decision-making organizations. The U.S. is estimated to contribute about 22% of the UN's yearly budget due to the UN's ability-to-pay scale, making this bill potentially devastating to the United Nations. The Bush administration and several former U.S. ambassadors to the UN have warned that this may only strengthen anti-American sentiment around the world and serve to hurt current UN reform movements.

In the US, complaints about the UN surface regularly in the domestic mainstream media. Some critics who oppose international constraints on US foreign policy contend that the US should withdraw from the UN, claiming that the United States is better equipped to manage the global order unilaterally.

While the relationship may be uncomfortable, both our friends and foes agree that the U.S. and the U.N. need each other. There is no denying that the United States is a leading superpower today, and I hope that the U.S., which has already been widely acknowledged as a fait accompli, will also realize that multilateralism is in U.S. interests, says Eliasson. He also says he thinks the experience of the war in Iraq is already becoming self-evident, unlike in Afghanistan, and he hopes the United States will revert to its past tradition of being a faithful partner in international efforts to resolve international issues.

Despite criticisms, the majority of Americans (88%) support active engagement in the United Nations, as evidenced by a non-partisan poll conducted after the 2016 election.

Noam Chomsky, a leading critic of U.S. foreign policy, proposes that measures such as the US relinquishing its veto power in the Security Council and submitting to the rulings of the International Court of Justice could significantly improve the UN's ability to foster the growth of democracy and promote global peace and the protection of human rights.

When the United States Government released its National Security Strategy.pdf for 2010 in May 2010, this quote was found embedded on the 46th page in regards to the United Nations: Enhance Cooperation with and Strengthen the United Nations: We are enhancing our coordination with the U.N. and its agencies. We need a U.N. capable of fulfilling its founding purpose—maintaining international peace and security, promoting global cooperation, and advancing human rights.

Economic Globalization---Ma Shang

1.Summary

As the main participant of global economy, TNC has a great influence in the process of economic globalization. So in this article, the author makes a more detailed description and explanation of the nature and importance of transnational corporations in the process of economic globalization through five parts.

THE SCALE AND GEOGRAPHICAL DISTRIBUTION OF TRANSNATIONAL CORPORATIONS :

In this part, the author explains the definition of transnational corporation, which is "a company that has the right to coordinate and control its business in more than one country, even if it does not own such business".TNC operate globally but are not loyal to any particular country or community. At the same time, the author explains the current situation of transnational corporations. In the past 50 years, the number of transnational corporations in the world economy has grown exponentially. And，FDI growth has consistently outpaced growth of world trade，a clear indicator of the increasing significance of TNCs as the leading integrating force in the global economy. Less than one-third of the world FDI total is in developing countries. Indeed, the vast majority of FDI consists of cross investment between developed countries.However, there is no doubt that the number of TNCs from major developing countries is increasing. The diversity of transnational corporations in the global economy is increasing.

WHY (AND HOW) FIRMS ‘TRANSNATIONALIZE’ :

The author believes that there are two motives and reasons for commercial companies to expand their business abroad, one is market-oriented investment, the other is asset-oriented investment. First of all, most of the investment of multinational companies is still market-oriented. When a company has reached the saturation point in the domestic market, the improvement of its profitability is likely to depend on whether it can expand its market beyond its home country. Secondly, the assets required for the products and services produced and sold by the company are also very unevenly distributed geographically, so local exploitation of resources (especially energy and industrial companies) may be required.

There are two major ways in which firms develop transnational activities: one is through what is known as ‘greenfield’ investment; the other is through engagement with other firms, through either merger and acquisition or some form of strategic collaboration. 

GEOGRAPHY MATTERS: THE EMBEDDEDNESS OF TRANSNATIONAL CORPORATIONS :

According to the author，place and geography still matter fundamentally in the ways in which firms are produced and in how they behave.TNCs interact with the local characteristics of their countries and communities and produce a series of unique results. And the domestic structures within which a firm initially develops leave a permanent imprint on its strategic behavior.

‘WEBS OF ENTERPRISE’: TRANSNATIONAL PRODUCTION NETWORKS :

The author points out that the difficulty of coordination and control of transnational corporations is far greater than that of corporations whose activities are limited to a single national space because of their scattered geographical distribution in different political, cultural and social environments. Multinational companies need more complex organizational structure. The geographical structure of production activities of MNCs can be divided into four types: One option is to concentrate production at a single location. Such globally concentrated production generates economies of scale in production but increases transportation costs and lessens the firm’s knowledge of distant markets. A second option is to produce specifically for a local/national market. Here economies of scale are limited by the size of the market. A third option is to create a structure of specialized production for a regional market (such as the European Union). A fourth possibility is to segment the production process and to locate each part in different locations: a form of transnational vertical integration of production. 

The power relationships between TNCs and other actors in the global economy：

The author believes that TNCs do not always have the power to act in their own way, and that countries still have a great deal of power over TNCs, such as controlling access to their territories and establishing business rules. Therefore, it is wrong to say that the state is generally powerless in the face of so-called "global companies". All the elements in the transnational production network are regulated in a certain political structure with the country as the basic unit, and the organization and geographical situation of the transnational production network are extremely complex. This inevitably creates tensions between TNCs and other important actors in the global economy: States, local communities, labour, consumers, civil society organizations. Therefore, the freedom of movement of transnational corporations may be greatly restricted.

2.What was interesting/what did you learn:

I think many of the author's views are very special and interesting, breaking my previous views and understanding of TNCs. For a long time, people have ignored the real relationship between TNCs and their countries. TNCs have undoubted power and influence in the global economy, but perhaps we need to avoid the simple view that TNCs always prevail.

Economic Globalization

Summary

Economic globalization is an inevitable trend of socialized mass production, it marks an advanced mode of production and is the economic foundation of future society. We can analyze from four aspects. First, global resources can be allocated most effectively and rationally. Effective division of labor and cooperation on a global scale can generate huge new productivity, and the rational allocation of resources makes possible the sustainable development of the global economy. Secondly, the company's production factors are optimally configured globally, so that the most advanced products can be developed, the most economical cost and the closest market can be obtained, thereby having the greatest competitiveness. Third, a person can receive education and information on a global scale, compete on a global scale, and thereby maximize his or her own potential. At the same time, through global selection and practical testing, people's talents can be fully self-fulfilled. Finally, whether it is to meet the needs of material life or spiritual and cultural needs, people have the opportunity to obtain the most advanced and cheapest consumption from the world, and at the same time, it is the most suitable for their individual needs. It can be seen that economic globalization is not only a space-advanced method, but has also opened the way for more advanced production methods by mankind. As far as the nature of economic globalization is concerned, it is the market economy worldwide. It advocates minimizing the intervention of ZF in the world, giving full play to the role of prices and profits in the market, and establishing a completely competitive market model. The global economy, through the "invisible hand" of the market economy, allows various production factors or resources to flow freely around the world, thereby achieving the optimal allocation of production factors or resources worldwide.

Interesting points and discussion

However, economic globalization has recently stagnated. The reason is that the income distribution of different groups within a country has deteriorated. In the booming stage of economic globalization, the Gini coefficients of major developed countries have increased to varying degrees, which is closely related to the deepening of the international division of labor: compared with those who are more disadvantaged, those who are in more advantageous industries The benefits will be greater. It is also to be seen more deeply that this deterioration in income distribution is largely related to government inaction. And international economic rules cannot adapt to the requirements of labor movement across countries. As a factor of production, theoretically, the labor force should realize the free cross-border flow as well as capital and technology. But in fact, this kind of movement has never really been realized. The root cause is the lack of multilateral rules that guarantee the free movement of labor across countries

How to solve such problems well is also worth thinking about.

What is Globalization? - Sunghokyoung

What is Globalization? - Sunghoykoung

SUMMARY
What is globalization? There are no definitions or scholars that explain this precisely in common and in differences. The term globalization has spread worldwide since 1989 when communism collapsed. From this point on, the concept of globalization begins to emerge as a one-dimensional concept of economics by the rise of capitalism. It becomes a symbol of what people think of as a 'bad' aspect of globalization. However, when many sociological factors were ignored while concentrating on the capitalist concept of globalization, the anti-globalization movement took place in the 1990s, resulting in a multidimensional approach of development developed in the late 1970s and early 1980s, resulting in a lot of research on globalization.
Against this backdrop of globalization theory, many sociologists define economics, politics and culture as the three main dimensions of globalization. These three things are very closely linked. McDonald's, a concept created by Reacher, allows transnational companies in the West to do business for economic benefits, but cultural adaptation is made to promote sales in each country. This kind of problem is expressed in the concept of globularization. Sociologists also tend to underestimate the social dimension of globalization, and the spread of social interaction and communication represented by the Internet or mobile phones is also an important aspect of globalization. Communication is an indispensable element in the social aspects of globalization.

Looking at another aspect, totalitarian ideas such as imperialism and fascism also emerge on the issue of world unification. These ideas may be seen as first-rate ideas, but they have become an important issue as attempts to combine the imperialist movement with modern society to recognize protozoic uniformity took place.
The concept of a nation-state, which has constituted a human society for centuries, does not decline, but is also part of globalization," the author explains. Rather, the reason for globalization has become a nation-state, and it has also played a role in establishing the identity of migrants on the issue of multicultural society and refugees, a problem derived from globalization.
The general patterns that appear in the globalization process are the international system aspects, the concept of humanity, the individual self and the state. First of all, a national nation must be included in globalization. Through massive migration, the world is turning into a multicultural society. Multiculturalism has spawned many problems and concerns, but it is gradually becoming a global benchmark.



Next, including the ego in the framework of globalization cannot be excluded from the scope of globalization either. We must realize that our daily lives are also part of the globalization process. We should also be interested in the international system.

Individualism taking place around the world isolates individuals and gradually increases responsibility for their actions. This phenomenon, in which society relies on individual efforts, is very dangerous because it can turn into a manipulation of one's identity. Globalization has its advantages, but it should continue to be noted. Critical analysis is also needed. The injustice and exploitation of globalization must be solved by us, thereby preventing it from becoming a negative word.

INTERESTING POINT
It was interesting that we could not clearly define globalization.

Discussion
Do countries or businesses that drive globalization and reap huge profits see globalization negatively? 
Can't globalization be seen as a bad influence only for countries or businesses that don't have strong revenue channels or cultures?

Political Globalization - Sunghoykoung

Political Globalization - Sunghoykoung

SUMMARY
Political globalization takes into account the approach to the social world that emphasizes the national and transnational process. The process of political globalization opens up the possibility of a new liberation to some, but it is also accepted by others as a loss of autonomy and a fragmentation of the social world.

The most common form of political globalization is similar to democracy. This is a kind of territorial-based globalization, limited to the political form of the nation's state. After the fall of communism, democracy becomes a universally accepted form of government. In this sense, globalization implies the global acceptability of democracy.

Global norm culture is an example of global norm culture by global geopolitics, human rights and fem This cannot be restricted by local problems.

With this influence, political communication becomes the basis of the world's standard culture. Today, there is a global normative culture that goes beyond the national system. However, this is sometimes called imperialism or cultural apocalypse. To sum up, political globalization would give someone new freedom, but would lose autonomy to others.
So the author creates new opportunities for autonomy that he thinks is best. Global civil society can be used in a good way, but this is also likely to be controlled by the 'dark side.'

INTERESTING POINT
I thought that his political globalization, the international flow of democracy and did not think he looks like. This view is interesting.
In terms of political globalization, develop even more countries through the thought. But this is toadyism culture can make that interesting.

Discussion
In terms of political globalization, the profit each country, intent may be. Purely positive basis this can only be looking at?

There is no possibility of political globalization is divisive dispute or of each country?

Economic Globalization - Sunghoykoung

Economic Globalization - Sunghoykoung

SUMMARY
Transnational corporations that violate autonomy and push national boundaries are three-dimensional state enterprises, and it is stereotypes made of misunderstanding that violate autonomy and push national boundaries. In the past, authorized trading companies such as East India Company and Hudson Bay Company were interconnected, which was an important point for economic development around the world. But over the past 50 years, the number of tnc has increased exponentially. TNC (TNC) refers to "a company that has the authority to coordinate and control operations in one or more countries." The TNC accounts for about one-tenth of the world's GDP and generates one-third of its total exports. The majority of the world's top 100 tnc still maintain more than half of its output. TNCs exist in various forms, but they interact with each other in common as a combination of political, social and cultural settings.

The activities of the TNC can be summarized in two ways: market-oriented investment and asset-oriented investment. Like most companies, TNCs can be considered central network density. There are many different ways the TNC's internal network is organized and geographically organized, and the way customers connect to external networks. Diversity is affected by some industrial environments run by the company, such as its specific history, cultural and administrative legacies in the form of recognized practices built over a period of time, competition in character and complexity, and technical and regulatory structures. Depending on the nature of geographical distribution dispersed in different political, cultural and social environments, the TNC is much more difficult to coordinate and control than the brass enterprises limited to a single ethnic space. More sophisticated organizational structures are needed. Without a sophisticated organizational structure, 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 markets in regions and countries. The economy of scale is limited by the size of the market.
For this reason, the localised nature of the TNC may make effective negotiation of labor difficult. Rather, CSOs will be able to overcome geographical constraints of local workers and consumers by utilizing Internet media. We should avoid simple arguments in favor of the TNC, recognizing the strong power and impact it has. The TNC can be powerful but has no absolute force.

INTERESTING POINT
It is an interesting point how companies have expanded their reach among transnational countries.

It is impressive that the government can have many limitations in controlling TNCs due to the characteristics of TNCs, and CSOs can have a great impact on TNCs through Internet media.

DISCUSSION
What is the most important situation for beginners and companies to consider when coming to Korea? Can transnational companies win each other when they come to Korea?

Blog Assignment 4 - Economic Globalization / Minjeong Lee

1. Summary

 Transnational corporation(TNC) is contributed to economic globalization. We live in a world of transnational corporations that have a lot of impact on the whole world, regardless of nationality. Therefore, it is very important to know the nature and influence of TNC in the process of economic globalization. 

 What we have to discuss is:  (1) the scale and geographical distribution of TNCs in the global economy; (2) why and how corporations engage in transnational activities; (3) the geographical embeddedness of TNCs; (4) the ‘webs of enterprise’ manifested in transnational production networks; (5) the power relationships between TNCs and other actors in the global economy. 

(1) The scale and geographical distribution of TNCs in the global economy

 By the end of the 19th century, no one had been involved in manufacturing and production outside the country. But in 1914, just before World War I, a significant number of manufacturing firm in the United States, the United Kingdom, and the European continent have gradually became transnational. For the last 50 years, the number of TNC has increased geometrically. The most comprehensive definition of TNC is 'Companies with the power to coordinate and control businesses in more than one country'. Currently, about 61,000 TNCs are estimated to be producing international products from more than 900,000 foreign subsidiaries. It accounts for about one-tenth of the world's gross domestic product, accounting for one-third of the world's exports.

(2) Why and how corporations engage in transnational activities

 From a market-oriented perspective, it is possible that a company has already reached saturation in a country's domestic market. Therefore, to increase profitability, the market must be able to extend beyond its own territory.

 Asset-oriented investment stems from the fact that assets (resources) required by an entity to produce and sell products and services also need to be used in the present state because they are highly unequal geographical distribution. However, advances in transportation and communication technologies and production process technologies have made companies more able to access other unequal resources of a broader geographical size. In particular, the importance of human capital has become very important, and the value of highly skilled workers located in quality communities has greatly increased.

(3) The geographical embeddedness of TNCs

 Places and geography are still fundamentally important in the way companies produce and operate. All businesses produce their goods through a complex process in which a country's cognitive,  social, cultural, political and economic characteristics dominate. So TNC interact with the local characteristics of the nation and the community.

(4) The ‘webs of enterprise’ manifested in transnational production networks

 It is not enough to regard companies as free, clearly bounded entities in some ways. Conversely, all businesses are composed of very complex and dynamic forms. So as a business in general, TNC can be considered as dense networks at the heart of the relationship. But because of the geographical nature of the different political, cultural and social environments, TNC is far more difficult to coordinate and control than the general firms limited to a single national space, which means they need a more sophisticated organizational structure.

(5) The power relationships between TNCs and other actors in the global economy

 Inevitably this creates tensions between TNC and other significant actors in the global economy: states, local communities, labor, consumers, and civil society organizations.International regulators such as the WTO, which is part of the global government, have a huge impact on the transnational production network.

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2. New/Interesting things I learned

  In the modern world, the influence of TNCs is powerful. Companies such as Microsoft and Apple have had tremendous global influence and are perhaps more powerful than countries. It is interesting that for the first time in the 15th century, a multinational company appeared. I think it has played a pioneering role in the discussion of transnational discussions since then. Also, as each country has a variety of preferences and different cultures and languages, TNCs cannot maintain the same strategy globally and will have to consider their respective cultural differences.

3. Discussion Point

 In a rapidly changing society, TNC have too much uncertainty and instability. There is no such thing as absolute strength, and it is uncertain that the company that met with the unexpected crisis could be the number one again. What can solve the instability of TNC?

Economic Globalization-Bongnyoung Heo

1. Summary

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?

Economic Globalization - Park chanyoung

1.     Summary

The boundaries of the nation are being broken through transnational companies and the nation's autonomy is being violated. But this is a stereotype that makes a misunderstanding.

The chartersd trading companies such as East India Company and Hudson Bay Company were increasingly interconnected and played an important role in economic development. As a civilian and merchant capitalist, they created a huge corporate empire on a global scale. The main purpose was trade and exchange, and they are the ancestors of today's world trade and service companies. However, it was not until the late 19th century that the first company to engage in manufacturing and production abroad emerged. Until the eve of World War I in 1914, a number of U.S., British, and European continental manufacturers were gradually becoming transnational. Over the past 50 years, the number of TNCs in the global economy has increased exponentially.

The most comprehensive definition of a modern TNC is 'an entity with the power to coordinate and control operations in more than one country even if it does not own them'. It is impossible to quantify and define in comprehensive terms because it contains many qualitative attributes related to complex relationships between companies operating across national boundaries. TNC is approximately one tenth of the world's total gross domestic product the world and generate one-third of total exports. The majority of the world's top 100 TNCs still maintain more than half of their activities in their home countries. TNCs come in many forms and sizes, from so-called global companies operating in several countries to TNCs operating outside of their home country only in one or two countries. What they all have in common is that they operate in different political, social, and cultural environments. The reasons why businesses expand their businesses abroad, and how they do so, are complex and highly dependent on specific situations. However, while there may be various reasons for TNC activities, we can summarize this into two broad categories: market-oriented investment and asset-oriented investment. Both size and specific characteristics of the market of Firm Relocation in the TNC to continue affecting. Specific market specificities may require direct presence to understand and respond to specific situations. The geographical imbalance in the market is one of the main reasons why companies participate in transnational investment. The second reason is that the assets that an entity needs to produce and sell products and services are also geographically very unevenly distributed. There are two main ways for companies to develop transnational activities. One is a 'greenfield' investment, the other through mergers and acquisitions with other companies, or through some form of strategic cooperation. Greenfield investment is simply the construction of a whole new facility. Add to the productive inventory of the enterprise itself and the countries and communities in which it occurs. Therefore, it is generally the most favored type of investment by the host countries. However, greenfield investment is hardly the most common way to expand abroad. It is dangerous to build a completely new facility, especially one on a considerable scale. That is why an entity may prefer to enter a foreign country through collaboration with an existing firm.

The general TNC development sequence is as follows. First, it is serviced overseas by direct exports by utilizing independent domestic sales agents. Second, as domestic demand increases, TNC exercises close control over overseas markets by establishing its own overseas sales outlets. Can be carried out by establishing entirely new facilities or by taking over local companies.

Places and geography are still fundamentally important in the way companies are produced and how they behave. All business companies, including geographically broad TNCs, are 'produced' through complex embedding processes in which cognitive, cultural, social, political and economic characteristics of the national home base play a dominant role. The TNC is therefore the 'owner' of these characteristics, which interacts with the location-specific characteristics of national and local communities to achieve unique results.

So, like most companies, TNCs can be regarded as dense networks at the heart of the network. There is a wide variety of ways that TNC's internal networks are organized and geographically configured, and how they connect to vendors and customers' external networks. Diversity is affected by some of the industry environments in which the company operates, including specific history of the enterprise, cultural and administrative legacy in the form of accepted practices built over a 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 companies with activities limited to a single national space: require more sophisticated organizational structures. The TNC has many geographical options for production activities. One is to focus production in a single location. While globally focused production creates economies of scale, it increases transportation costs and reduces corporate knowledge of distant markets. Secondly, specifically to produce for local and national markets. The economies of scale are limited by the size of the market. The third is to create a professional production structure for the local market. Finally, the production process is subdivided and each part is placed in a different location. It's a transnational vertical production integration.

Transnational corporations are undoubtedly the most important factor in the modern world economy. There is no doubt that their importance is increasing. More companies are becoming transnational in the early stages of development. Both the TNC and the organizational and geographic areas of the transnational production network are very complex and dynamic.

International regulatory agencies such as the WTO have a huge impact on the geographic impact of transnational production networks. Similarly, international institutions that establish technical standards play an important role. In some cases, they help operate transnational networks by introducing coding standards.

2.     Interesting point

It was interesting how companies expanded their reach across the transnationals. One was the Greenfield investment and the way to take over or merge existing companies. Depending on the situation and purpose of each country trying to advance, the two methods had their own advantages and disadvantages.

3.     Discussion point

What way should transnational companies want to enter Korea? Why is the method effective?

Economic globalization - Jang Yerim

1. summary
 The business corporation – specifically the transnational corporation (TNC) – is the central actor in economic globalization.
 (1) the scale and geographical distribution of TNCs in the global economy .
 As essentially colonial and merchant capitalists, the East India Company and the Hudson’s Bay Company, created vast business empires at a world scale. However, the first firms to engage in manufacturing production outside their home country did not emerge until the second half of the nineteenth century. by the eve of World War I, in 1914, considerable numbers of US, UK and some continental European manufacturing companies were becoming increasingly transnationalized.
 Using a more restrictive definition, based on ownership criteria alone, UNCTAD (2004: 8) estimates that around 61,000 TNCs currently carry out international production in over 900,000 foreign affiliates. These operations represent roughly one-tenth of total world gross domestic product and generate one-third of total world exports. And the top 100 (less than 0.2% of the total number of TNCs worldwide) accounted for 14% of the sales of foreign affiliates worldwide, 12% of their assets and 13% of their employment in 2002.
 (2) why and how corporations engage in transnational activities.
①MARKET-ORIENTED INVESTMENT
 A firm may have reached saturation point in its domestic market.
 Increasing profitability may well depend, therefore, on being able to expand its market beyond its home territory.
②ASSET-ORIENTED INVESTMENT
 Traditionally, it was the geographical localization of many natural resources that drove much of the early development of TNCs. Firms in the natural resource industries must, of necessity, locate at the source of supply. And there are human resources or assets. The skills and knowledge embodied in people in a particular regional environment with specific social and cultural composition. It includes the intention of using cheap, unorganized labour in developing countries. Such assets are geographically very unevenly distributed.  But it is not only labour costs that are the major driving force. Except in those industries where unskilled – and, therefore, cheap – labour is important, it is other attributes of human capital that have become more significant. In particular, it is increasingly the availability of well-educated, highly skilled and strongly motivated workers located in ‘quality’ communities that are exerting a very strong influence on TNCs.
 (3) the geographical embeddedness of transnational corporations.
 Contrary to much of the received wisdom on the global economy, place and geography still matter fundamentally in the ways in which firms are produced and in how they behave. All business firms, including the most geographically extensive TNCs, are ‘produced’ through an intricate process of embedding in which the cognitive, cultural, social, political and economic characteristics of the national home base play a dominant part.
 (4) the ‘webs of enterprise’ manifested in transnational production networks.
 All business firms are constituted as, and embedded within, highly complex and dynamic networks of production, distribution and consumption. Such networks have become increasingly extensive geographically and controlled. TNCs, therefore, like firms in general, can best be considered as ‘a dense network at the centre of a web of relationships’ (Badaracco 1991: 314). By the very nature of their dispersed geographical spread across different political, cultural and social environments, TNCs are far more difficult to coordinate and control than firms whose activities are confined to a single national space.
 Characteristically, the corporate headquarters of TNCs invariably remain in the firm’s home country (often in the community in which the firm originated).
 Compared with corporate headquarters and R&D facilities, there is no doubt that production activities have become more dispersed geographically in the search for key assets and/or proximity to markets.
 A number of geographical configurations of TNC production activities are apparent (Dicken 2003a: 246–50). One option is to concentrate production at a single location. Such globally concentrated production generates economies of scale in production but increases transportation costs and lessens the firm’s knowledge of distant markets. A second option is to produce specifically for a local/national market. Here economies of scale are limited by the size of the market. A third option is to create a structure of specialized production for a regional market (such as the European Union). A fourth possibility is to segment the production process and to locate each part in different locations: a form of transnational vertical integration of production.
2. interesting point & Discussion
 Now that globalization is going faster than ever, I often wonder, who is the real driver of the global community? As the boundaries of a country fade away, and as the government's grip is significantly weakened, Transnational Corporations are stepping in.
 There have often been cases of Transnational Corporation dominating state power, and now there is even concern that the global community's main player may be a TNCs.
And, TNCs are increasingly acting like countries all over the world. Will this trend proceed faster? Is there an appropriate alternative to preventing the tyranny of TNCs?

Economic Globalization

Summary:

Peter Dicken, the writer of Economic Globalization: Corporations, explains depiction and explanation of the nature and significance of transnational corporation(TNC) in the era of economic globalization in five categories.

 

THE SCALE AND GEOGRAPHICAL DISTRIBUTION OF TRANSNATIONAL CORPORATIONS

 

The ancestors of today's global trading and service companies are chartered trading companies like the East India Company and the Hudson's Bay Company, which emerged in Europe after 15th century.

However, the first company which engage in manufacturing production was emerged in the latter half of the 19th century. After the World War I, especially during past 50 years, the number of TNCs in the world economy has grown exponentially. The most comprehensive definition of a modern TNC is ‘a firm which has the power to coordinate and control operations in more than one country, even if it does not own them’. These are global corporations, the 'placeless' giants whose operations span the globe and which owe no allegiance to any particular country or community. TNC has all forms from global corporations operating in scores of countries to TNCs operating in only one or two countries outside their home base. Their common feature is that they operate in different political, social and cultural environments.

TNC activity is conventionally measured using statistics on foreign direct investment (FDI). ‘Direct’ investment is an investment by one firm in another with the intention of gaining control over that firm’s operations. During the past two decades, FDI has grown at an accelerating pace and it's growth has consistently outpaced growth of world trade. This is a clear indicator of the increasing significance of TNCs as the leading integrating force in the global economy. There is an increasing diversity of TNCs in the global economy.

WHY (AND HOW) FIRMS ‘TRANSNATIONALIZE’

1. MARKET-ORIENTED INVESTMENT

Much of their investment continues to be market-oriented. A firm may have reached saturation point in its domestic market. Or it may have identified new markets that require a direct presence in order to serve them efficiently. Like this both the size and the particular characteristics of markets continue to influence the locational decisions of TNCs.

2. ASSET-ORIENTED INVESTMENT

The assets that firms need to produce and sell their products and services are also geographically very unevenly distributed and, therefore, may need to be exploited in situ. Assets like human resources are very unevenly distributed geographically. It is really only in the past 50 years or so that these kinds of assets have come to play a significant role in transnational investment. n particular, it is increasingly the availability of well-educated, highly skilled and strongly motivated workers located in ‘quality’ communities that are exerting a very strong influence on TNCs.

3. Modes

There are two major ways in which firms develop transnational activities: one is through what is known as ‘greenfield’ investment; the other is through engagement with other firms, through either merger and acquisition or some form of strategic collaboration. Many firms, especially US and UK firms (though not only these) have preferred to merge with, or to acquire, another firm to establish, or to expand, their presence in a particular overseas location. Another widely used mode of TNC expansion is to enter into a strategic collaboration with one or more other firms. Many companies are forming not just single alliances but networks of alliances, in which relationships between partner firms are increasingly multilateral, rather than bilateral, polygamous rather than monogamous. Advocates of strategic alliances claim that by cooperating, firms can combine their capabilities in mutually beneficial ways. Critics point to the potential risk of losing key technologies to competitors. 

A sequence of TNC development?

First, overseas markets are served by direct exports, normally utilizing local independent sales agents.

Second, as local demand grows, it may become desirable for the TNC to exert closer control over its foreign markets by setting up overseas sales outlets of its own. This may be achieved either by setting up an entirely new (greenfield) facility or by acquiring a local firm (possibly the previously used sales agent itself).

The nature of TNC networks in general is a critical influence on the potential for development of firms seeking to operate beyond their home territories.

GEOGRAPHY MATTERS: THE EMBEDDEDNESS OF TRANSNATIONAL CORPORATIONS

Contrary to much of the received wisdom on the global economy, place and geography still matter fundamentally in the ways in which firms are produced and in how they behave. All business firms, including the most geographically extensive TNCs, are ‘produced’ through an intricate process of embedding in which the cognitive, cultural, social, political and economic characteristics of the national home base play a dominant part. TNCs, therefore, are ‘bearers’ of such characteristics, which then interact with the place-specific characteristics of the countries and communities in which they operate to produce a set of distinctive outcomes. There are inherent obstacles to convergence among social systems of production of different societies, for where a system is at any one point in time is influenced by its initial state. Systems having quite different initial states are unlikely to converge with one another’s institutional practices.

‘WEBS OF ENTERPRISE’: TRANSNATIONAL PRODUCTION NETWORKS

All business firms are constituted as, and embedded within, highly complex and dynamic networks of production, distribution and consumption. Such networks have become increasingly extensive geographically and controlled – or, at least, coordinated – primarily by transnational corporations. By the very nature of their dispersed geographical spread across different political, cultural and social environments, TNCs are far more difficult to coordinate and control than firms whose activities are confined to a single national space.
In addition to the question of a TNC’s organizational architecture there is the related, though not identical, issue of the geographical configuration of its activities. Developments in transportation and communications technologies, as well as in production process technologies, have facilitated the transformation of the geographical extent over which a TNC can separate out its different functions as well as their precise geographical configuration. Because different functions – administration, R&D, production, marketing, sales – have different locational requirements, and because these requirements can be satisfied in different types of location, TNCs tend to develop distinctive spatial patterns for each function. Hence, their internal corporate division of labour is expressed in a distinctive external division of labour, although such patterns show enormous variation between different types of TNC and also between different industries.
Changes to a firm’s geographical configuration often occur as a result of the firm’s decision on what to produce for itself, in-house, and what to externalize to independent suppliers. The ‘make or buy’ decision has become particularly critical as competition has intensified and as firms strive to increase their efficiency to enhance or maintain profitability. TNCs, therefore, are highly dependent on other firms for many of their needs.
All the elements in transnational production networks are regulated within some kind of political structure whose basic unit is the national state. International institutions exist only because they are sanctioned by national states; sub-national institutions are commonly subservient to the national level, although, of course, the situation is more complex in federal political systems.
TNCs do not always possess the power to get their own way, as some writers continue to assert. States still have significant power vis-à-vis TNCs, for example to control access to their territories and to define rules of operation. In collaboration with other states, that power is increased (the EU is an example of this). So, the claim that states are universally powerless in the face of the supposedly unstoppable juggernaut of the ‘global corporation’ is nonsense; the question is an empirical one. TNCs may be powerful – but they do not possess absolute power.

What was interesting/what did you learn:
It was interesting to explain why the TNC came up. It was also impressive that the beginning of the TNC appeared earlier than I expected.

I have a perception that the TNC was an international company, so it was interesting that the TNC was also geographically constrained.

Discussion Point:
What are some examples of political structures that regulate TNC?