As the world globalized and many aspects of Society
has been globalized too. Politics, economy, culture seem to show similar
pattern. The boundary between countries are disappearing and world’s economy
linked into one large framework. This article focused on this phenomenon and
analyzed Transnational corporation to understand this phenomenon.
The definition
of Transnational corporation(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’.
The emergence of Transnational corporations are not that old. Sinc1914,
considerable numbers of companies in United kingdom and United stats of America
manufactured product outside of their country. And after, many other country’s
company has been transnationalized. These countries have been overcome
geographical, cultural environmental extents. TNC activity is conventionally
measured using statistics on foreign direct investment(FDI). FDI has been
radically increased since two decades ago. FDI is important because this can be
the indicator of world trade. As the unification between countries and
disappearance of global boundaries are emerging, TNC has a important role in
Global economy. But there is a problem of leaning. The country who invests are
confined to a small number of countries. It is important to increase the diversity
of invest channels.
There are two main reason why companies go transnational. First is market-oriented investment. market has reached saturation and it is almost mandatory to go out for the company's profit. and second is the asset-oriented investment. The resources are uneven around the world and company's may go outside at the first time. And attraction of cheap and unoraginzed labour resources made company's to go abroad. The sequence of TNC starts with achieving a position of strength in country's domestic market. and by merging domestic company, the control of market may increase. as the demand grows, TNC may get easier control over its foreign markets.
Geography is important aspect which influences culture, politics and economy. Geography still influences firms. The geographic characteristics are embedded in cognitive cultural, social, political and economic characteristics of the target nation. The native land's influence is quite strong that it may remain in consumer, domestic company. within this essentially dialectical relationship, TNC seem to remain it's dominant influence.
The companys which seeks profit and generate profits in the marek form networks. This network is dynamic and highly complex. Firms are constituted into dynamic web and TNC therefore can be considered as ' a dense network at the conter of a web relationships' TNC are not geographically confined so it is hard to control firms activity. so the organizational architecture is required.
And TNC networks are interested in organizing and reconstructing. as the time passes, TNC's dependence grows, as the variance of circumstances and demnads are changing. to fulfill their demand, TNC depends on other company. TNC seems to have much power because they are not confined to geopgraphy unlike other companies and benefits from other countries resources like labour, but it is not true that TNC has the absolute power. But still, it is true that TNC has the power in global economy.
INTERSTING POINT
In these days, all the companies which I know seem to be transnational. As I see in the street, starbucks, Samsung, mcdonalds, H&M, and every products I consume Marlboro, BIC, coke is transnational. There are no local products and transnational coporation's influence is getting powerful than the past. because the network between companies and markets are strengthened as the internet and global network has been spread abroad. By this phenomenon company's which seek for go abroad increases. they seek for cheaper labour and resources. Company seeks for profit and domestic geographical environment may not be the answer to company. So, we can see that there are many products from transnational company that are made in china, Indonesia, Vietnam which has the cheap labor resources.
But the interesting I focus on is that Donald trump's anti global policy. Trump said in his speech that he will make factories in china and other countries should come back to the united states with his promises. By doing so, he said he could create jobs and revive the economy in the united states. It claims that the U.S. economy has worsened and jobs have gone away because of relocating factories overseas. This anti Transnational movement of Trump is arguing. From the standpoint of the company, it is important for them to reduce expenses and increase profit. so Trump's idea may not fit with company mind. But for the job seekers in US, they may get a job due to relocation of company factories. It is question that Does this idea can make Us economy revive?. or is it just a temporary expedient and a short-sighted viewpoint?.
CONCLUSION
TNC's power lies in their advantage of geographical differernces in the availability and cost of resources in state policies and to switch and re-switch between locations. As I read on this article, there are no doubt that TNC has the power in Global economy and can control many aspects of world economy. they create tensions in many aspects of economy. they form network each other and constitutes much influences. But as i mentioned ealier, the regulations on multinational corporations seem to appear and they may lose control and power. unlike old days, TNC can not hold absoulute power on domestic country. But TNC can effect country's small business companies and start-ups. so it is important to set legal and rational regulations and make balance between each other.
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