W14. Econimic Globalization / Sunbo Sim

1.Summary

The author explained what is TNC, how it is organized, and how it interacts with other firm or states and international organization. The author described the TNC through five chapters.

First Author talked about the size and geographic distribution of transnational corporations. In economic globalization, TNC is part of the early development of the national economy. Before World War I, U.S. companies in the United States and Britain turned into TNC. As the TNCs have increased in various areas, the precise criteria for TNCs have become difficult. Only a few hundred companies can be regarded as super corporations. Companies that are still leading the world include their activities in their own countries. However, TNCs are operating in different political, social, and cultural environments.

There are two main reasons why companies turned into TNC. The first is the market-oriented reason. Many companies reached saturation points in their own markets. So they could expand the reach of businesses with increased profitability. So they began to understand the new market. Because access to the market could be constrained by the political regulatory framework, businesses had to consider the size and nature of the new market.

The first is the asset-oriented reason. The geographic disparity of markets is the main reason companies invest in transnational markets. Companies have begun to look for new territories to meet corporate goals because asset what they need are not geographically distributed. Also, the new and important assets of labor and knowledge emerged and became a crucial factor in choosing new areas.

Second, Author taked about How TNC perform their activities. The TNCs are ‘greenfield ' investment and strategic collaboration or merging.

Greenfield investment is building new facilities in new areas. Building a completely new facility, especially building a sizeable new facility, is a risky adventure. For that reason, companies may prefer to establish a foothold in overseas branches through their relationships with established companies. In the United States, it preferred to merge with other companies to expand their businesses. The expansion of the new type of TNC has entered into strategic collaboration with several companies. Companies that cooperated have centered on their proliferation and the transnational strategy of many companies. Collaboration with rivals and their formats continue to change and occur in various areas.

Third, I can learned about how TNC is organized. It was common in the international business literature that TNC began its position in the local market, starting with its starting point and becoming TNC only after entering overseas markets.

Aside from this sequence of orders, the advent of the new TNC has created a new development sequence that does not necessarily constitute a large or dominant domestic market before businesses begin operating overseas. These companies have been internationally inclined from the outset and those companies must rely on various channels, such as the Internet, as well as the networks of other TNCs.

Next, I can understand a description of the TNCs ’ architecture. The tendency of TNC features is characterized by the presence of the nation's influence on the founding of the country.
Therefore, it is difficult to become a complete placeless TNC. That is why they want to develop a unique way to organize their economies. Companies will have their own culture. Companies try to act strategically through corporate culture. The process of becoming a company's TNC is a joint evolution process whereby the business system extends and divides the company's territory into another country.

Finally The writer continues to say that the TNC continues to grow. It inevitably causes tension between TNCs and other important actors for growing up. TNCs are also included in various regulatory systems. Organisations such as WTO greatly affect these TNC networks. All elements of the TNC production network are regulated within a sort of political framework that forms a fundamental unit. As a result, TNCs and states continue to be involved in a complex negotiation process.

2.Interesting Point

I felt the most interesting part of reading was the activity of transnational companies and the new regional selection method. Before reading this article, I already knew I was in TNC. We just remembered that we were only internationally renowned companies. However, such companies have expanded their businesses to expand their businesses and did not know what the new criteria were. Among them, strategic collaboration was the most exciting. Recently, we have been able to see the collaboration of companies, this article explain reason to me so I read carefully.

3.Discussion Point.

The Discussion Point I think is the justification for TNC. I think TNC has a lot of good functions, but it's also has dysfunction. A company in the form of TNCs plays a good role in creating free competition and creating new services without states’ regulation. But in view of dysfunction, I think that expanding their businesses and merging businesses in other fields can cause imbalances in businesses Therefore, it is necessary to discuss situations that can cause such imbalances.