Korean companies 'Samsung' and 'LG' crossed the border and become a global corporation. In addition, there are companies from various countries in one country such as 'Apple', 'ford' of the United States and 'volkswagen' of Germany. We live in a global enterprise world. Economic globalization has already begun to take place since the trading company that emerged in Europe in the 15th century, such as the Hudson's Bay Company.
Global companies operate globally and do not require loyalty to specific countries or communities. In this regard, this article is irresponsible. If a company operates in a variety of countries, it is of course impossible to control it only in one country. Global companies are as powerful as many countries. However, in the geographical range, the majority of the top 100 multinational corporations still maintain more than half of their activities in their own countries. Multinational corporations are offered in various forms and sizes, from global companies operating in many countries or multinational companies operating in only one or two countries outside their home countries. The common point is that they operate in different political, social and cultural environments. ‘Hyundai Motor Company’ and ‘Kia Motors Corporation’ in South Korea had a controversy due to the difference in options when selling cars at the same price in different countries. I think the reason is because it considers the political, social and cultural environment of each country. But Korean companies have sold low quality cars to Koreans, so the perception of Koreans is worse.
TNC activities can be summarized into two categories: market-oriented investment and asset-oriented investment. Both the size and the nature of the market continue to influence the TNC's regional decisions. TNC strives to find new markets that are politically and culturally appropriate to provide efficient services. This is called market-oriented investment in TNC activities. Meanwhile, the assets needed to produce and sell products and services are also geographically dispersed. So the TNC tries to exploit it in the field. Traditionally, the identification of geographical locations where there are many natural resources was the initial development goal of the TNC. However, the development of transportation and communication technology and the production process technology have developed. So the TNC went to places where the labor force was cheaper to replace the more expensive labor rather than the resource center. TNC's activities to find and invest in market resources are called asset-oriented investments.
For example, TNCs such as 'Samsung' and 'LG' in Korea actively used the Korean labor force at the beginning. All of Koreans were working on economic development and it was time to grow the nation more than the wealth of the individual. But over time, workers struggled to find their own rights, one of which was money. Just as Western TNCs made their way to Asia for cheap labor, Korean TNCs also moved factories to China. But now that Chinese wages have risen so much, Korea's TNC is planning a new asset-oriented investment in Southeast Asia.
These companies are not clearly bound, or are inadequate to be considered free organizations. Every business enterprise consists of a highly complex and dynamic production, distribution and consumption network. And these networks are largely geographically controlled by transnational corporations. That is, the TNC can be regarded as a dense network at the center of the relationship.' Due to the geographical nature of the different political, cultural and social environments, TNC is more difficult to coordinate and control than a company operating in a single country.
In recent examples of Japan's "TAKATA", the loss has increased as TAKATA's airbags have been criticized for quality problems. In addition, in 2009, an airbag defect caused more than 10 deaths in the United States, resulting in a class action lawsuit, which was investigated by the US Department of Transportation and Communications (NHTSA) and dismissed by the US federal government. The United States pointed out that corporate production and profits were prioritized over consumer safety and criminal responsibility. And in February 2017, TAKATA acknowledged the problem of selling defective air bags in the United States and agreed to pay a fine of $1 billion. In the end, TAKATA's headquarters, despite being in Japan, suffered great damage and became impossible to recover, and the largest Japanese manufacturer subsequently went bankrupt. TAKATA was not controlled and caused serious problems in Japan. Though TAKATA is an extreme example, I think it showed well that culture and politics in geographical locations should not be ignored.
The geographical scope of a multinational production network varies greatly. Indeed, these networks are not truly 'global'. However, a clear recent trend is that such networks have a network of strong regional dimensions, organized on a multinational scale of market groups. In some cases, such trends are reinforced by regional political structures, as in the case of the EU or NAFTA. Geographical proximity is a powerful stimulus that integrates the operation itself. Regional strategies provide many advantages of globalization while effectively responding to organizational barriers. From a TNC perspective, this regional strategy can be an ideal answer to the competitive pressures of organizational responsiveness and global integration. Recently, a huge transnational FTA such as TPP (Trans-Pacific Partnership) and RCEP (Regional Comprehensive Economic Partnership) have been discussed and are becoming more global.
As mentioned in the article, multinational corporations have a strong influence in the world economy. However, the TNC can also limit the freedom of action. The TNC may be powerful, but it does not possess absolute power. Politically, culturally, and economically, globalization has enabled companies to operate globally. Rather, it seems to have more scope and activity than the state, but international organizations and enterprises can exist because of sanctions by the state. I think that both companies and nations should work together to balance consumer and labor power, both of which should work for global development.
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