W14 Economic Globalization Lee Dakyeong

Economic Globalization

Information Sociology

2015048859

Lee Dakyeong

1. Summarize

          Economic globalization doesn’t have a clear consensus because there is a lot of conflicting opinions. However, that many people agree that TNCs are the key players. It is the trading company that played the most important role in the early development of economic globalization. Authorized trading companies have played a very important role in the evolution of an increasingly interconnected political economy. Since the very beginning of the First World War, companies have undergone a process of change. Over the last 50 years, the number of multinationals has increased exponentially. To define a multinational corporation, it is a company that has the authority to coordinate and control operations in many countries, even if it is not currently owned. However, this definition contains a lot of qualitative attributes, so it is difficult to quantify them collectively. Multinational companies account for about a tenth of world gross domestic product, but most of that activity is generated by a very small number of large TNCs. This has been called irresponsible large corporations that operate globally and do not require loyalty to specific countries or communities. TNC activities are generally measured using statistics on foreign direct investment (FDI). 'Foreigners' Direct investment is a direct investment that occurs beyond a country boundary, where one company in one country invests in one company in another country or operates a branch or subsidiary in another country. Over the past two decades, especially FDI has grown at an accelerating pace (at least to the global economic slowdown in 2001). Most of the FDI consists of cross-investment between developed countries. Of course, there is a significant increase in FDI in developing countries.

          Like TNC, the reasons and methods for expanding business outside the home are complex and very complex in certain situations. Divide this into two categories: market-oriented and asset-oriented. Investment to expand the market is investment to improve profitability. Investment in asset growth involves the development of production process technologies such as transportation and communication technologies. There are two main ways in which companies develop transnational activities.

          There are two types of FDI: Greenfield investment and Grayfield investment. Greenfield investment is simply building entirely new facilities (management offices, factories, research and development facilities, sales and distribution centers, etc.). Companies may prefer to build their presence in overseas offices through relationships with existing companies. It is added to the productive stock of both the company itself and the country / community in which it occurs. For this reason, host countries are generally the most preferred type of investment.

          Another widely used method of TNC expansion is strategic alliances with one or more other companies. The point is that size, proliferation and many companies are at the heart of the transnational strategy. Most surprisingly, most strategic alliances are among fierce competitors. In other words, it reflects new forms of business relationships, namely, new competition in the way of collaboration and competition.

          TNC accepts the domestic market first, develops it, then enters the overseas market. It is important to understand the place when entering the overseas market. All business entities, including the most geographically large multinationals, are 'produced' through a complex embedding process that is the dominant part of the country's cognition, culture, social, political and economic characteristics. TNCs, therefore, have these characteristics and interact with specific local characteristics of the area and community to create a series of unique results. In summary, like any other company, TNC can be considered a "dense network at the heart of relationships".   


2. Interesting Point

          "Strategic alliances" played an important role in the expansion of the TNC. What I was interested in is that this strategic alliance is among the fiercest competitors. To me, collaboration was to work together. I thought it was collaborative to work happily with my friends. However, it was very interesting that having a partnership and working together eventually became a new competition. And I made this idea. As we go to school and work on a team together, it is a kind of alliance and collaboration, but when it comes to individual students, it has come to my mind that they are competing. It was interesting that the relationship to multinational companies could be applied to our students as well.

3. Discuss Point

          I would like to discuss the interesting part that I felt. I want to discuss the meaning of true collaboration. It is an era that competition is overheated, so many people got exhausted. In Korea, there are various words that call young people in their twenties who are tired of competition. The fourth industrial revolution is underway in the 21st century. A lot of technologies are developing around the keyword "super connective age". Many people in this era emphasize that globalization can connect and be together anytime and anywhere. But in the end, like multinational corporations and our students people have become who are not free from competition. In this economic globalization trend, I would like to discuss whether real collaboration is possible or not, except fear of relational problems such as betrayal.