Economic globalization

1.Summary

 

Like we studied from our class in this semester, the whole world are becoming more and more interdependent. Globalization is now running in the political section, cultural section and also in economic section. It is definitely the most powerful influences of all the shape of many globalization form. Economic influences are very obvious to each individual. In 16th century, there are the first transnational corporation as a matter of fact, such as the East India Company and the Hudson’s Bay Company. They actually initiate the global trading and service like the one of today’s. But after them, there were no companies like them untill the 20th century. In 1914, there are created many global companies. After World War 1, many other corporations were roused and became more popular and their influences over the whole world became stronger. Currently, Transnational corporation as a firm that has the influence over the world has been created. Many firms has been became transnational. It is very complex to explain why they developed. We can classify the phenomenon about two categories. It is ‘Market-oriented investment’ and ‘Asset-oriented investment’. There are two major ways that corporations control the transnational activities. First, there is investment. People or corporations invest their profit to the uprising company. It is called Greenfield investment. Second, Corporations merge or collaboration as a engagement. Greenfield investment can name as a new facility. They build a factory to distribute some part of stock to do their task. Next, many transnational Corporation do Engagement with other corporations to go abroad.

TNC is the most important facter that runs the economic globalization nowadays. As we studied already, the world is becoming more and more interdependent and complex. In modern society, corporation never exist just alone. Nowadays, TNC is connecting to even local town and nations. In these sense, TNC became to have a power within the global world. Tha basis of power of TNC lies in the potential ability to take advantage of geographical differences in the availability and cost of law materials or resources in state policies. But, the power of TNC causes very hasty generalizations because it does not mean the TNC always have positive side. It may creates the inequality of global economic distribution of power

2. Interesting thing I learned

 

I learned about the brief history of TNC. I thought that TNC is only matter of things between country to country. But actually, TNC are connected to the local town and even nations. So TNC’s scale is much bigger than I thought. In globalized world, the role of TNC will be much more important Because of their influences over the whole world. TNC have to consider the side effects of global economy and then appreciate their role inside the global economy.

3.Discussion point

 

After reading this article, I think the power of globalization is really strong. Especially, the economic factors are very close to each people like me. Everything around us has affected by the economy. In this sense, the emerge of the TNC is maybe causes some problem to the local economy. There is a term called economy of scale. TNC’s scale is very huge so it’s influences are much more broad. TNC may control the local economy by trade. Or, maybe, TNC could put the local small corporation into danger. How do you think about the side effects of TNC?

Economic Globalization

Summary

The globalization which was caused by advance of technology affects to economical areas. The world has become more interdependent as rising of international trade and their specialization. People can use some goods as a cheaper price that cannot produce in their own nation in the past time. Our world make WTO(World Trade Organization) for operating these trade. It means that the economy has become globalization.

This article focus on the TNCs(TransNational Corporations). TNC is a corporation that do a global commercial activities based on their own country. They grow in the period of World War 1 that was occurred in 1914. The global-scale war needed many war supplies so some firms can grow largely. Now, they have powerful economical abilities than the nation-state. It is caused by geographical extent.

Despite TNC develops these days, their investment continues to be market-oriented. And second reason of firms engage in transnational investment is assets that firms need to produce and sell products are also geographically very unevenly distributed. TNCs has complex process to embedding in society. The complex process includes some interaction and place-specific characteristics.

For these reasons, TNCs form the dynamic networks. Despite of dynamic networks the maintenance of TNC is much harder than the normal firms. TNC's headquarter is located in their own country, even the functions of headquarters may be handled by their branches in other countries. So the transnational networks is the essential one. Also TNCs is related largely to other firms. They have relationship as supplier and consumer.

In case of Europe, EU(European Union) maintains the oldest economic cooperation. In fact, the EU forms the political, social bonds as well as economy. In economical aspects, Economic cooperation, such as tariff elimination, seeks to cooperate not only in economics but also in other social factor's unification. However, the EU faces conflicting interests in terms of unity among different nations. The differences in culture, language, race and currency occur some conflicts in EU.

 

Interesting Things

Before I learned this lecture, I didn't know that what is TNC. TNC is very familiar things such as Korean conglomerate firms(Samsung, Hyundai,..). TNC affect to their country and the whole world.

It has come to the situation where people interact with each other wherever they live. The advent of large corporations has expanded the choice of people's spending. So I think the world economy is unified and the interests of the nations are becoming clearer. The side effect of this globalization is conflicts of interest within the national interests of the nation, as described in article. It is quite interesting to note that this phenomenon is a real phenomenon called the "BREXIT"

 

Discussion Point

After reading this article, we learned that the economic globalization give us many conveniences but there is also adverse effects. Now countries around the world have an economic agreement with other countries that match their interests. But in 2008, people opposed the nation's plan to hold a large-scale candlelight rally in Korea. Also, in 2016, farmers held rallies for the price of rice. During the repressive process, one person died from a police crackdown on water cannons. As such, the nation which is deputy of the public can not represent all the people. In particular, the economic agreement is a cautious matter in terms of having a direct impact on individuals. How should the nation reconcile the public opinion of the opposing people?

Economic Globalization

1. Summary

There is a clear consensus that the business corporation is the central actor on economic globalization – specifically the transnational corporation (TNC). The development of companies outside their home country was part of the early development of early international economy such as the East India Company and the Hudson’s Bay company. they are the ancestors of today’s global trading and service company

 

However, the first firms to engage in manufacturing production outside their home country did not emerge until the world war 1. In 1914 US and many European manufacturing companies were becoming increasingly transnationalized. since then, the number of TNCs in the world economy has grown.

 

The ‘placeless’ giants global corporations like General Motors, Royal Dutch Shell, IBM, Toyota, Unilever and others are being more powerful than many nation-states. But the vast majority of the world’s leading TNCs still retain more than half of their activities in their home country. What they all have in common is they operate in different political, social and cultural environment.

 

Then why and how firms ‘transnationalize’? The reasons why TNCs extend their operation are complex. But we can boil these down to two broad categories. Market-oriented investment and asset-oriented investment.

 

Market-orientated investment

a firm may have reached saturation point in it’s domestic market. Access to the market can be restricted because of political regulatory structures or cultural reason.

 

Asset-oriented investment

The geographical unevenness of market is one major set of reasons why firms engage in transnational investment. Firms in the natural resource industries have to locate at the source of supply. labour cost is other factor. Many types of transnational investment have been very sensitive to geographical variations in labour cost.

rld. EU also has made considerable reorganization of existing corporate networks by existing and new TNCs. WTO is also influence on transnational networks as a regulation. we need to avoid the simplistic view that TNCs always prevail. it dose’t posse absolute power.

 

There are two major ways in which firms develop transnational activities: ‘greenfield’ investment and through engagement with other firms. Greenfield investment is building of totally new facilities. e.g., Japanese automobile firms – Nissan, Toyota, Honda in North america and Europe. The other strategy is to collaborate with one or more other firms. GM has collaborative ventures with Toyota, Ford, Fiat, Renault amongst others.

 

Place and geography still matter fundamentally in the ways in which firms are produced and in how they behave. Hence, over time, societies have tended to develop distinctively. Not all the capitalisms are the same. Forms of economic coordination and governance cannot easily be transferred from one society to another.

 

However, a few generalizations can be made. As in the cases of EU or NAFTA. States strive to minimize such ‘regulatory arbitrage’ The relationship between TNCs and states are complex. TNCs may be constrained in their freedom of action. They may be powerful. but they do not possess absolute power.

 

 

2. Interesting

 

TNCs are becoming powerful. But there are also very strong regulation by source of supply, labour, culture, and nation-states. TNCs are very powerful nowaday. And but still, they can not control global-size economy over nation-states.

 

3. Question

 

Since WTO(World Trade Organization) has established, many countries have attempted to make global agreement under negotiation. But many rich countries rather tend to reduce their economic barrier by joining individual agreement(FTA). The idea to unified trade regime for the entire globe seems to fail. I want to discuss that why WTO members have failed to agree global trade deal.

Economic globalization

1.     Summary

In these days, almost of large firms aims to global market. Like the movement of political globalization(expending international political spectrum), Economic globalization makes the movement of transnational corporations. This chapter shows 5 issues of TNC.

The scale and geographical distribution of transnational corporations

In 16th century, the East India Company and the Hudson’s Bay Company created vast business work at a world scale. Of course, they could be an ancestors of today’s global trading and service but there were no companies which manufactured their products in oversea, until 20th century. In 1914, many western companies(US,UK and European) became to increasingly transnationalized. Recently(past 50years), the number of transnational corporations is extremely increased. The term of TNC in today is ‘a firm which has the power to coordinate and control operations in more than one country, even if it does not own them’ but it is not enough definition to quantify in aggregate terms. Because it is on the complex relationships. In aggregate terms of TNC activity is conventionally measured using statistics on foreign direct investment (FDI). And most of activities belong to some largest TNCs.

Why (and how) firms ‘Transnationalize’

This is complex to describe one way. But we can classify into two categories :market-oriented investment and asset-oriented investment. Market-oriented investment view explains that profitability depends on expanding of market beyond its home territory. And view of asset-oriented investment focuses on geographical unevenness. Asset for produce and sell products are not evenly distributed in geographical view.

Also, there are two major ways to develop transnational activities. One is greenfield investment which is the way to make new facilities for produce. It is classified into foreign direct investment so it’s risky but it creates employment. The other one is through engagement with other firms, typically merge, this way has opposite effect of greenfield.

Geography matters: The embeddedness of transnational corporation

 Geography matters are fundamentally in the ways that corporations are produced and in how they behave. Variety environments like cultural, political, cognitive, social matters affect all activities of TNCs. With the globalization, geography matters are more complex formed. But there is no placeless type. Each company tried to adapt specific situations and it is continued to make up the new intrinsic economic environment.

‘WEBS OF ENTERPRISE’: TRANSNATIONAL PRODUCTION NETWORKS

 Today’s businesses are composed of very complicated process. All transnational corporations have the complex network for developing their business. They are related by resource, produce facility and channel to customers. It is also same in single nation company but it is much important to TNC. Because it is much difficult to systematize and control the situation.

THE POWER RELATIONSHIPS BETWEEN TNCs AND OTHER ACTORS IN THE GLOBAL ECONOMY 

 TNC shows various influence in vast area and it is definitely main movement of economic globalization. But it works in complex fields and it’s potential is came from availability and cost of resources and also other social factors local policies. So the way of TNC is not unbeatable and even they cannot support form nation’s protect. Aside from the discussion of power, clearly TNC has a potential to lead the era of globalization.

2.     What did I learn

 I think whole concepts in class are related. Globalization is caused by extension of each entity’s influence. Cultural globalization is like the movement of dyestuff in waterborne phenomenon and political globalization felt as interaction for coexistence. Economic globalization is the most reasonable concept. The first priority aim of Firm is maximizing profit. In the past, there are no rules or guideline of international trade, so it is difficult to work about international business. But nowadays international rules are established and traffic communication developed as enough to active in vast area. If TNC has a difference, it is they don’t belong to specific nation. From now on, the interaction between international organization is more complex. And I think we have to more concern about each products and issues.

3.     Discussion point

 I want to discuss about actual activities of TNC in Korea. I learn about TNC’s process in the text but I still have no idea about actual influence to my life. Maybe most of large companies which lead Korea are almost TNC now. And I wanna talk about effect from changing into TNC with classmates.

Economic Globalization

1.     Summary

The modern definition of TNC are incorporated or unincorporated enterprises comprising parent enterprises and their foreign affiliates. A parent enterprise is defined as an enterprise that controls assets of other entities in countries other than its home country, usually by owning a certain equity capital stake.TNC appears in fifteen century in Europe, after world TNC has grown dramatically. Firms like General Motors, IBM, Toyota, are the most prevelant form of TNC.

TNC activitiy can be measured statistically by using FDI(Foreign Direct Investment) FDI has grown consistently two and ten times more than 1986. Currently, one third of the world total FDI accounts in developing countries like East Asia. FDI is significant in Asia, but it is not preferable opinion. There are some reasons for transforming coporations into TNC .The size and own characeristics of company have a influence on the locational decisions of TNC. The geographical unevenness is the main factor of why firms involved in transnational investments. Some assets like human resources are unevenly distributed and it is a vital source in transnational investment.

There are two ways in which firms develop transnational activities. One is a greenfield investment and the other is merge and acquisition form of investment. Greenfield investment establishing totally new facilities is the most preferable type of investment by host countries , because it produces stocks in firm and countries efficiently. Merge and acquisition type of investment seems more practical rather than greenfield investment. Another strategy is collaborating with one and or more firms. They are gaining economic power and adding a new component called collective competition

The establishment of the NAFTA is leading to a reform of corporate activities and networks organized at the regional scale are apparent in most parts of the world. EU also has made considerable reorganization of existing corporate networks by existing and new TNCs.. WTO is also influence on transnational networks as a regulation. we need to avoid the simplistic view that TNCs always prevail. it doesn’t posess absolute power.

2. Interesting

I knew the many forms of TNC corporations and many agreements like FTA and TNCP has a significant role in increasing or decreasing the TNCs. TNCs is highly involved in human resources. I think those firms have a social resposiability as influcing domestic economy.

  In korea, there was a TNC firms like carrefour mart. French retailer,

since they collapsed the Korean retailer have to send the dismissals of over 1,000 so-called non-regular workers. many people struggled for losing their jobs and their livelihoods was a desperate one for the mainly young women workers involved. 

3.Question

Some retailer is suffering from calls for action against abusive working conditions in foreign plants that produce clothing for them under sub-contracting arrangements, although the retailer has no equity ownership or even foreign presence in the country in which the abusive labor conditions exist. The impact of TNCs on people around the world has grown paradimically as these firms of economic globalization reach into the life of domestic societies through both equity and non-equity mechanisms

 what should determine the appropriate function and limits on TNC responsibility for social conditions around the world?

Economic Globalization

Summary

In explanation about economic globalization, business corporation is main actor. It specifically called 'TNC'. We live in a world of global corporation. At the same time global corporation is significant in terms of political spectrum. Main issues are: (1) the scale and geographical distribution of TNC(the transnational corporation) in the global economy; (2) why and how corporations engage in transnational activities; (3) the geographical embeddedness of transnational corporations; (4) the 'webs of enterprise' manifested in transnational production networks; (5) the power relationships between TNCs and other actors in the global economy.

 

1)

In 1914, UK and some European manufacturing companies were becoming increasingly transnationalized. The most well known definition of a modern 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'. And some global corporation called 'placeless' giants. Because they owe no allegiance to any particular country or community and have operations span the globe. But these majority TNCs still retain more than half of their activities in their home country and one or two countries outside their home base.

 

2) The reason can be thought market-oriented investment and asset-oriented investment. In terms of market-oriented, to increase profitability, corporation expand its market beyond its home territory. But access to the market may be restricted because of political regulatory structures like import tariffs. And in terms of asset-oriented, the main reason is the geographical unevenness of markets. And second reason is the assets that firms need to produce and sell their products and service are not enough, so firm may need to exploited new country.

Also many of the early leading TNCs were effected in the natural resource sectors. This involves human resources. The so-called 'New International-Division of Labour' was base on the claims that firms in the Western industrialized countries were fleeing the constraints of high-cost, militant labour to tap cheap in developing countries.

 

3) Global corporations are bearers of such characteristics, which interact with the place-specific characteristics. It appears verity 'placeless' type. This is because under specific circumstances, each society have tended to develop distinctive ways of organizing their economies, ideology of capitialism.

 

4) TNCs like firms in general have dense network which is both organizationally and geographically. And TNCs are far more difficult to coordinate and control whose activities are confined to a single national space. TNCs tend to develop distinctive patterns for each function. For example, TNCs labour is expressed in a distinctive external division of labour. But most the corporate headquarters remain in the firm's home country. These network engaged in processes of restructuring, reorganization and rationalization. TNC networks are always in a continuous state of flux. Some part grow rapidly, others may be stagnating, others may be in decline. Such restructuring and rationalization inevitably causes tensions between TNCs and other 'stakeholders', notably governments and labour.

 

5)

TNCs are dependent on other firms for many of their need. This relation appears state of flux. Pressures on suppliers to deliver 'just-in-time', pressures on them to reduce prices, pressures on them to take on more responsibility and risk have come to characterize a number of global industries.

The basis of TNC's power lies in their potential ability to take advantage of teographical differences in the availability and cost of resources and in state policies and to switch and re-switch operations between locations. International regulatory bodies like WTO have significant role about geography of transnational production networks. As Harvey notes, "we need to avoid the simplistic view that TNCs always prevail. TNC's may be powerful - but they do not posses absolute power."

 

Interesting

I interestingly read explanation about 'New International-Division of Labour'. TNC find cheap labour in developing countries and there are high cost labour in Western society. Also, 'flex' word often watched in explanation TNCs emergence and network structure. When I read 'flex', I thoght the word 'liquid modernity' used Zygmunt Bauman. Liquid modernity is represented postmodernity.

Zygmunt Bauman's Liquid modernity is written in wikipedia. "'postmodernity' by using the metaphors of "liquid" and "solid" modernity. In his books on modern consumerism Bauman still writes of the same uncertainties that he portrayed in his writings on "solid" modernity; but in these books he writes of these fears being more diffuse and harder to pin down. Indeed, they are, to use the title of one of his books, "liquid fears"—i.e., fears about pedophilia, for instance, which are amorphous and have no easily identifiable referent."

 

 

question

 In text, there are two step about New International-Division of Labour. I think south korea society has tree step Labour network after emergence of TNC. In south korea society, foreigner from the Philipines, Indonesia offers cheap labour and most korean high educated hope high cost position in global corporation. But in terms of Western society, these position also is belong to low quality position. Nevertheless High educated korean tend to prefer TNC than logical corporation. Why they prefer global corporation and How think about my opinion about three steps about Labour network in korea?

Economic Globalization.

Economic Globalization

1. Summary

As a political perspective, Not only left but also right political perspective say that Our Economic system is Global; Economic Globalization.

The scale and geographical distribution of transnational corporations. - Actually in the 16 C, there was also Transnational corporation such as British East india company like that. After WW1 the transnational corporations became more popular and more bigger. Some of the Most biggest transnational corporations own most amount of economy, market and interest.

Why and how firm "Transnational" -
There are many reasons why the corporations do a transnational. First of that reason is market oriented investment and Second of reason is asset oriented investment.

Modes - There are two major ways how corporations do transnational activities. One is greenfield investment and another is engagement with other corporations as merge or collaboration so on.
Greenfield investment can name as the totally new facility building. It can exist as the factory building to separate by each part of stock to do their task.
Many transnational Corporation do Engagement with other corporations for their activities in abroad. By merge or collaboration, Transnational Corporations can remain in the Global market and make possible their goal in the global market.

TNC is main movement of economic globalization. Our world is becoming  interdependent and connect to each other more deeply. Not only each nation but also each corporation can not survive as itself. They must corporate to each other for make their profit and make sure that their remains. Nowadays TNC is connected to nation, corporation, local town and people. TNC makes possible many thing for us and give more option and chance for us to do something.

2. What did i learned

Since i read this article, i don't know about the Economic globalization exactly.
I can know many things about the economic Globalization to not only this article but also class. In the class, we talked about world trade. There are many agreement and many organization relate to free trade. We can say that the modern trade is not protect but free.
Korea government did many free trade agreement and also participate in many free trade organization. We talked about many free trade like TPP, RCEP and so on. We can know about that the free trade is just like a coin so there are always dark side and also bright side. As we talked and found information about the Korea rice market, which it is related free trade, we can think about who will win and who will lose because of free trade. We must think about the counter attack to free trade. Some nations doesn't want to free trade no more. They want to protective trade. The reason why they think like that is job. Really many people think that because of free trade, too many foreigner worker came to their nation and the foreigner work do their job so they lose their job. Actually is is half right and half wrong. I think that the reason why brexit and Donald Trump became the president of U.S is this kind pf thinking and opinion. The British people ,who voted for brexit, thought that they lose and give up too many thing because of EU. It is just same as U.S people who voted for Donald Trump for their president.

3. Discussion point

I am really interesting in the nowadays Economic Globalization. As we already know that we are living in the Economic Globalization society. Because of the Economic Globalization society, many thing can be possible. One of example is that shopping. We can buy many thing, which came from other nations and there are really many option to buy something. ( you can think about when you buy shoes- Nike, Adidas, Puma, so on...). There are really many global organization relate to economic around the world.  WTO is the best example of that can show the economic globalization. I want to ask question to you "How does our economic market change? " As you know that our economic market changed really many times and it is still changing. Is this kind of change good for us ? If it can influence bad and side effect on someone, who will lose their profit?
And my last question is "How can we prepare and ready for economic globalization?" As we already know that the Economic Globalization is main movement of Economic and nobody deny to that fact. I think that there are always winner and also loser during the process and also after that movement so what can we do for this kind of movement and what is the problem of economic globalization and how can we handle that ?

Economic Globalization

Economic Globalization: Corporation

 

Summary

We live in the world that global corporations are increasing. Global corporations have created vast business as a world scale. We can define a modern TNC(transnational corporation) as ‘a firm which has the power to coordinate and control operations in more than one country, even if it does not own them’. What TNCs all have in common is that they operate in different political, social and cultural environments. The vast majority of the world’s TNCs originate from the developed economies. Moreover, a much smaller number of very large TNCs are carrying out most international productions.

 

Although there are complex reasons why business firms extend their operations outside their home countries, we can pay attention two broad categories: market-oriented investment and asset-oriented investment. In the point of market-oriented investment view : Because much of investment continues to be market-oriented, increasing profitability may well depend on possibility to expand its market beyond its original(home) territory. Both for political and cultural reasons, TNC may be desirable to stay in a local market: such as transportation costs, political regulatory structures and so on. In the point of asset-oriented investment view : There are 2 reasons for transnational investment. First, geographical unevenness is that. Second, the assets needed to produce and sell products and services are also geographically very unevenly distributed. Also, TNCs can shift their activities and operations boundaries according to changes of labour costs.

 

There are two major ways how firms develop transnational activities. one is ‘greenfield’ investment: building totally new facilities. It’s risky. The other is the engagement with other firms, through either M&A or other forms of strategic collaboration. Recently, most of the growth in world FDI(foreign direct investment) has been driven by M&A. Moreover, both developments in transportation and communications technologies, as well as in production process technologies, have increased the ability to access other unevenly distributed assets on increasingly wide geographical scales.

 

Unlike M&A, strategic alliances are usually used when solving specific business problems. Nevertheless, the proliferation of such alliances has greatly increased the complexity and variety of TNC operations in the world economy.

 

Place and geography still matter fundamentally in the ways firms are made and in how they behave.

The TNC’s origin place has the dominant influence. Empirical research represents how Japanese and US electronics firms have distinctively different ways of organizing their regional production networks, differences that clearly reflect their different home characteristics. On the contrary, interconnectedness in the contemporary global economy means that influences are rapidly transmitted across boundaries. It will also affect the way business organizations are configured and behave. For that, involvement in the global economy is forcing firms to modify several their practices.

Also, it is reinforced by regional political structures such as EU or NAFTA.

 

Transnational production networks are complex and dynamic. It creates tensions between TNCs and states, local communities, labour, consumers, civil society organizations. We can notice TNCs’ powerful influences in the global economy, but we should know that they don’t always prevail and have absolute power.

 

 

 

New, Interesting items learned

 

Due to globalization in economy, corporations can handle matters with more possible choices from the ‘make or buy’ decision that means the firm’s decision on what to produce for itself and what to externalize to independent suppliers to any other numerous problems. Moreover, TNCs usually develop distinctive spatial patterns for each corporations’ functions. Corporations can choose from more detailed variations. It’s interesting and I think management of corporations is increasingly complex.

 

Finally, I have studied globalization in 4 dimensions during completing blogging. After that, I can’t convince some situations and matters because I know I can see them in many various view but I can certainly recognize that matters in globalization are affected by interactions between internal and external things. I think tensions between them are critical points to study globalization.

 

 

 

Discussion point

 

I studied some regulations related to FTA when I took the international trade class. I also studied M&A, strategic alliances and other methods when taking management class. So, this article is more interesting for me because I can extend my knowledge. As I mentioned above, I think the tension is most important thing when studying and understanding globalization. For that reason, I wonder the balance between protective trades and free trades with other countries in economy. Is it possible that we can balance between them? Or, we can think that what is better. In the case of Korea, agricultural products are more preserve than any other thing when we trade. I studied that one of reasons for that is about national security in terms of food. Although It’s rational, other countries feel anger for our seal. I also know that we can’t remain restrictions in that way. Anyway, I want to share other thoughts about this matter and study more deeply.   

 

Economic Globalization

1)    Summary

Despite many different opinions on economic globalization, it is clear that the trading company is the leading player in the global economy. Transnational corporations are of great importance in economic globalization.

The development of enterprises in global geographical areas is an integral part of the early development of an international economy. In Europe, from the fifteenth century appeared the trading companies that created a world trade. These ancestors had a very important role in the evolution of the international economy.

Towards the middle of the nineteenth century, the first enterprises of international manufacturing appeared. Since the First World War, a large number of manufacturing enterprises have been increasingly internationalized. A number increasing strongly in recent years. The correct definition of a transnational corporation is "an enterprise that has the power to coordinate and control operations in more than one country, even if it does not have them".

The world's largest corporations that settle on the globe are considered the most powerful. Foreign direct investment that transcends national borders differs from portfolio investment, which means that a company buys equity in other companies. In recent years, foreign direct investment has accelerated considerably. This is a clear indicator of the strong growth of transnational corporations as an integrating force in the global economy. The largest share of foreign direct investment comes from an economy between developed countries. However, the number of transnational corporations in developing countries is increasing.

There are two main reasons why companies are expanding abroad: market-oriented investment and asset-based investment. Regarding market-oriented investment, a large part of the investments of these enterprises remain on the market for various political and cultural reasons. Regarding asset-oriented investment, companies engage in transnational investments because of the geographical inequality of the different markets. The initial development of transnational corporations is due to the geographical location of natural resources.

The evolution of transport and communications technologies has enabled companies to obtain human resources and goods from other countries through the skills of people in different local contexts.

Greenfield investment and engagement with other companies are the two main means of developing transnational activities. The greenfield investment consists in the construction of new installations, which is the type of investment most requested by the host countries. However, many companies prefer to merge or acquire another company to establish or expand their presence in a specific location.

Another mode of expansion exists for transnational commercial companies, strategic collaboration with other companies especially with competitors. This gives birth to new form of business relationship.

Most often, transnational corporations develop first in their home country before developing abroad.

Place and geography are of fundamental importance in the ways in which businesses are produced in the way they behave. Business enterprises are created through an integration process. Transnational corporations therefore have their own characteristics and then interact with the specificities of the foreign country. Companies from different countries organize their networks in different ways. Companies have developed distinctive ways of organizing their economies.

All companies are incorporated and integrated into very complex and dynamic networks. They have also become more and more controlled. Transnational corporations are dense networks at the center of a network of relationships. The organizational and geographical plan of transnational corporations varies greatly. In general, the headquarters of transnational corporations invariably remain in the country of origin of the enterprise, although certain types of seats may be dispersed in different locations.

The networks of transnational corporations are in continuous state of flux and restructuring of the organization. This can lead to tensions with other stakeholders.

The geography and organization of large transnational corporations and their transnational production networks are immensely complex and constantly changing. The global economy can be represented as clusters of localized and closely related activities integrated into various forms of corporate network that vary considerably in geographic extent.

The success of transnational corporations lies in their ability to take advantage of geographical differences in the availability and cost of resources and in state policies and to change and re-establish exchanges between the different locations.

Transnational corporations do not possess infinite freedom of action. They can be powerful but do not hold absolute power.

2)    Interesting point

Through this article, I became aware of the power of transnational corporations, how these companies manage their trading relationships and integrate into a different culture with specificities.

3)    Question

One question that is of great interest to me is how can we help developing countries to have more impact in the world in the face of the large transnational corporations that have the majority of world power?

Economic Globalization

SUMMARY

Advances in technology and transportation have speeded up the  globalization. While globalization is from the World Trade Organization (WTO) launched. The proliferation of free trade in accordance with World Trade Organization was launched to promote international trade. As consumers we have been able to expand the deal to buy cheaper products were able to choose from a variety of good products.Corporate globalization is the sales market and increasing the size of the transaction. Whereas international competitiveness is weak industrial sector has also weakened or external dependence is growing disadvantage.
 In economic globalization, especially in the aspect of the corporation, TNC(Transnational Corporation) is very important factor. Most of the leading multinational companies still maintain more than half of the activity in their home country. In the so-called multinational corporations in a global company operating in the score, come in all shapes and sizes. Countries to multinational companies operating in one or two countries outside the home base. This response is that work in different political, social and cultural environment.
Despite recent developments in TNC activity, much of their investment continues to be market-oriented. A firm may have reached saturation point in its domestic market. Increasing profitability may well depend, therefore, on being able to expand its market beyond its home territory. It may have identified new markets that require a direct presence in order to serve them efficiently.. Access to the market may be restricted because of political regulatory structures (such as import tariffs).
The geographical unevenness of markets is one major set of reasons why firms engage in transnational investment. The second set of reasons derives from the fact that the assets that firms need to produce and sell their products and services are also geographically very unevenly distributed. Traditionally it was the geographical localization of many natural resources that drove much of the early development of TNCs. It is no coincidence that many of the early leading TNCs were in the natural resource sectors, including energy and industrial resources as well as in agricultural products. Firms in the natural resource industries must, of necessity, locate at the source of supply, although it is often the case that subsequent processing of the resource takes place elsewhere, generally close to the market.
Every business firm is composed of complexity, dynamic producing network, consume and distribution. TNC can take an effect to other political, cultural, social environment naturally because general TNCs are located as geographical diffusion. TNCs has a feature that head office is located in home country. But some functions of head office are diffused to other place in a company's transnational network.
The European Union is the oldest and the highest level of economic cooperation.
In addition, the economy, and is gradually expanding the political, social sector policies.
Today the European Union has seen a huge single market have been equipped with international competitiveness, as well as exchanges, peace, community problem solving and also performance. There are a number of problems, however, it appears by the economic differences of each country in the process of integrating the different countries. According to the various ethnic conflicts and cultural differences, language and customs are factors that hinder the European Union.

NEW, INTERESTING, OR UNUSUAL ITEMS I LEARNED

In this assignment the new item I learnd is TNC. I have become more interested in TNC and I find out more about it. 'Oxy' which made dozens of people in South Korea died and others suffered lung damage was TNC too.(http://www.bbc.com/news/world-asia-36185549)
These companies employ jobs all over the world. Today, Vietnam is an attractive destination of transnational corporations. Hundreds of large transnational corporations in the world in recent years have chosen Vietnam as a long term investment destination.

QUESTION, CONCERN, OR DISCUSSION ANGLE

I saw a article "Transnational corporations have important role to play in women's empowerment - Phumzile Mlambo-Ngcuka"
(http://www.unwomen.org/en/news/stories/2014/10/ed-speech-world-investment-forum-geneva). This speach says TNC can help to achieve gender equality. Does TNC have any more influence on society except for the economic part?

Economic globalization

1. Summary
(1) The scale and geographical distribution of TNCs in the global economy.
 The development of companies with interests and activities located outside their home country was part and parcel of the early development of an international economy. Nevertheless, by the eve of World War 1, in 1914, considerable numbers of US, UK and some continental European manufacturing companies were becoming increasingly transnationalized. Since then, the number of TNCs in the world economy has grown. 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.’ This definition is impossible to quantify in aggregate terms. Using more restrictive definition, UNCTAD estimates that around 61,000 TNCs currently carry out international production in over 900,000 foreign affiliates. In fact, TNCs come in all shapes and sizes. In aggregate terms, TNC activity is conventionally measured using statistics on foreign direct investment (FDI). During the past two decades, FDI has grown at an accelerating pace. The number of TNCs originating from the leading developing countries is undoubtedly growing. There is an increasing diversity of TNCs in the global economy.
(2) Why and how corporations engage in transnational activities.
 We can boil down to two categories. Market-oriented investment and asset-oriented investment.
∙ Market-oriented Investment: Despite recent developments in TNC activity, much of their investment continue to be market oriented. Both size and particular characteristics of markets continue to influence the locational decisions of TNCs.
∙ Asset-oriented Investment: The geographical unevenness of markets is one major reasons why firms engage in transnational investment. The second reasons derives from the fact that the assets that firms need to produce and sell their products and services are also geographically unevenly distributed. Developments in transportation and communications technologies have increased the ability of firms to access other unevenly distributed assets on increasingly wide geographical scales.  It is only in the past 50 years or so that these kinds of assets have come to play a significant role in transnational investment.
Modes: There are two major ways in which firms develop transnational activities. One is through what is known as ‘greenfields’ investment, the other is through engagement with other firms, through merger and acquisition or some form of strategic collaboration.
The sequence of TNC development is usually identified as follows. First, overseas markets are served by direct exports. Second, it may become desirable for the TNC to exert closer control over its foreign markets by setting up overseas sales outlets of its own. The nature of TNC networks is a critical influence on the potential for development of firms seeking to operate beyond their home territories.
(3) The geographical embeddedness of transnational corporations.
 All business firms, including the most geographically extensive TNCs are produced through an intricate process of embedding in which the cognitive, cultural, social, political and economic characteristics of the national home base play a dominant part. This will affect the way business organizations are configured and behave.
(4) The ‘webs of enterprise’ manifested in transnational production networks.
 TNCs like firms in general, can best be considered as ‘a dense network at the center of a web of relationships. TNCs are far more difficult to coordinate and control than firms whose activities are confined to a single national space. Developments in transportation and communications technologies have facilitated the transformation of the geographical configuration.
(5) The power relationships between TNCs and other actors in the global economy.
 The basis of TNCs’ power lies in their potential ability to take advantage of geographical differences in the availability and cost of resources and in state policies and to switch and re-switch operations between locations.

2. Interesting
 Even I performed Wikipedia assignment ‘The world is curved’ which subject is world’s economy, I didn’t know about the ‘TNC’. I think TNC is very interesting concept of global economy. I really glad that I can learn more about the global economy. The development of technology changes a lot in global culture, political, economy. In the book ‘The world is curved’ suggested that global economy also really dangerous. The scale of world’s economy grow bigger, the risk of the global economy gets bigger. So, when I think of global economy, I only think about the risk.

3. Discussion point
Since I read ‘The world is curved’, the idea is fixed as ‘dangerous’. So I really wonder if the global economy works properly. And if the global economy is falling down, can the global economy revive?

Economic Globalization

1)    Summary

Purpose of this article is to provide TNCs (transnational corporation) in the processes of economic globalization. It looks TNCs in economy globalization in focusing on five related issues.

The scale and geographical distribution of transnational corporations

 In past, there are some companies located outside their home country such as the East India Company and the Hudson’s Bay Company. However, the first firms to manufacture production outside their own country didn’t arise until the second half of the nineteenth century. These are called global corporations and TNC like General Motors, Royal Dutch Shell, IBM, and Toyota, What they all have in common is that they operate in different cultural, social, and political, and environments. The number of TNCs originating from many countries is growing. There is an increasing variety of TNCs in the global economy.

Why (and how) firms ‘Transnationalize’

The reasons why firms extend their operations outside their own countries, are two categories : market-oriented investment and asset-oriented investment.

Despite recent developments in TNC activity, their investment mainly continues to be market-oriented. Firms may have reached saturation point in their domestic market. So they identify new market. In this situation, both the size and the particular characteristics of markets influence TNCs.

The geographical unevenness of markets is one of reasons why firms engage in transnational investment. Other reasons derives from the fact that the assets that firms need to produce and sell their products and services are also geographically distributed.

Geography matters: The embeddedness of transnational corporation

Geography matter fundamentally in the ways in which firms are produced and in how they behave. All firms, including the most geographically widespread TNCs, are produced through an intricate process of embedding in which the cognitive, cultural, economic, social, and political characteristics of the national home base play a dominant part.

Nevertheless the unquestioned geographical transformations of the world economy, driven at least in part by the expansionary activities of transnational corporations, we are not witnessing the convergence of business-organizational forms towards a single ‘placeless’ type. This is because, over time, and under specific circumstances, societies have tended to develop distinctive ways of organizing their economies, even within the broad, ideology of capitalism, apparently unitary..

‘WEBS OF ENTERPRISE’: TRANSNATIONAL PRODUCTION NETWORKS

All business firms are constituted as highly dynamic and complicated networks of production, consumption, and distribution and Such networks have become increasingly widespread geographically and controlled. Therefore TNC can be defined as ‘a dense network at the centre of a web of relationships’. Internal networks of TNC are composed, both organizationally and geographically, and how they are connected into the external networks of customers and suppliers varies considerably. Because of complexity, TNCs are more difficult to systematize and control than other firms whose activities are confined to a single national space.

THE POWER RELATIONSHIPS BETWEEN TNCs AND OTHER ACTORS IN THE GLOBAL ECONOMY

The basis of power of TNC lies in their potential ability to take advantage of geographical differences in the availability and cost of resources and in state policies. However, this recognition of power of TNC lead to some very hasty generalizations because it does not necessarily mean that TNC always have the advantage. TNCs do not always possess the power to get their own way because there are complex relationships between TNCs and states. So, the opinion that states are universally powerless in the face of the unstoppable juggernaut of the ‘global corporation’ is nonsense.

2)    Interesting thing I learned

I thought global corporations has a long history, but I got to know the first firms to manufacture production outside their own country didn’t arise until the second half of the nineteenth century. Before reading this, I had thought that global corporations and TNC is free from geographical constraints Because of the meaning of ‘global’ term. But I learned that Geography matter fundamentally in the ways in which firms are produced and in how they behave.

3)    Discussion Point

These are many global corporations and TNC like General Motors, Royal Dutch Shell, IBM, and Toyota in the world. The number of TNCs originating from many countries is growing. In this situation, What are the Effects of TNC on domestic firms? If it had a negative impact, how would it overcome?