W14 Economic Globalization/ jinsol Park/2015048304

1. Summary

With disagreement over economic globalization, the multinational corporation is a key topic. This chapter discusses the nature and importance of TNCs. And focus on five issues. (1) How is the geographic distribution of multi-national corporations / (2) and why enterprises are involved in the global economy?/(3) The relationship between the geographic location of a multinational corporation and (4) a multinational production network / (5) power of a web company.

Companies in Europe, the East India Company and the Hudson Bay Company, which emerged in Europe since the 15th century, are the trading companies of global trade and services today, with increasingly interconnected economies. Since 1914, a number of Western firms have become increasingly transnational, and the number has risen dramatically since then.
TNC is called a global company in terms of geographic coverage and is run across the globe. That means they operate in different political, social, and cultural environments. Direct investments in TNC activities have taken control of the company by investing in other companies. And in the developing world, there was a sizable increase in FDI.

Market-oriented investments are constantly being used in markets. Second, asset oriented investments are also being used. The geographic disparity of markets is one of the main reasons companies work in multinational corporations. For example, investment centered on natural resources has a long history. And the workforce has become a major driver.

There are two main ways companies can develop transnational activities. One is investment in green fields, the second is a form of underwriting or strategic cooperation through a contract. Greenfield Investment invests in investing in foreign capital to invest in investment targets and build new businesses. The latter reflects new forms of business relationships. The automobile industry could be an example. That is, it focuses on a particular business. Those who support them point out that they risk losing core technologies to their competitors.

The following is the sequence of TNCs development. First of all, overseas markets are generally provided by direct exports by using local independent sales agents. And as local demand increases, the TNC itself controls the demand. There is plenty of evidence in this development process. The Calog Corporation, which we know well, has gradually expanded overseas. What is unusual is that businesses do not necessarily own large and dominant domestic market positions before entering large markets.

Geography is still important in the global economy. It is fundamentally related to the way businesses produce and how they behave. And economic coordination and governance can not be easily transferred from one society to another. That is because it is implicit in the social structure of production specific to their particular societies. For example, Japan's business group keiretsu.

The TNC is generally considered to be ‘ high-density networks ’ as a corporate enterprise. In a politically diverse, culturally diverse environment, TNCs are much more difficult to control than others. There is something peculiar about it. The headquarters of TNC remained unchanged at the company.

Cultural differences play an important role in the needs of goods and services. East Asia does not have the same kind of political framework as the EU or NAFTA, but there is very strong evidence of the presence of regional production.

2. Interesting Point

First of all, it is a great advantage to the development of the company, which can contribute to the development of the industries. To attract foreign investment, Nations offer various benefits to local governments and countries. Disadvantages may suffer from corporate governance if foreign capital flows rapidly and spills out. The so-called " hot money " fund, which is risky for investment in the capital. This is because it is not all healthy and long-term.
The greenfield investment is a type of FDI (FDI), that invests in overseas markets and companies directly into investment targets. Companies can control their production facilities directly, gain access to local sales networks, and capitalize on the latest production techniques and management techniques. In addition, the position of the investment target can be achieved by creating new jobs, transferring technology, etc. However, there is a disadvantage of establishing a new production facility and taking a long time to establish a normal operation because it requires new production facilities. In contrast to greenfield investment, there is an investment in brownfield securities that occupy overseas markets by acquiring companies that already exist in foreign countries or factories.

3. Discussion Point

I would like to discuss the issue of ' Liability ' in this context. The problem with this responsibility is that it is a matter of corporate ethics, so it seems to be a very important issue. It is subdivided into economic responsibility and ethical responsibility. The economic responsibility is, " Who pays for the losses? " MultI-ductions are very powerful within the region. Therefore, they may need to reorganize the relevant bills. And secondly, it's the moral responsibility. For example, improving the environment for workers. Since everyone has the right to work in a fair and healthy environment, multinational companies must always listen to the stories of workers.