Economic globalization

1. Summary of ‘Economic globalization’
 In the point of opinions about economic globalization, especially business corporation which is a multinational corporation is a key subject.  We are increasingly living in a global corporate world and are not significantly disturbed across national boundaries. In economic globalization, we talk about the size, geographical distribution, transnational activity, and multinational production networks of multinational corporations in the world economy.  The corporate companies that emerged in Europe since the fifteenth century and the Hudson Bay Company are increasingly interconnected economies and merchant capitalists, they created a vast business empire on a global scale.  They are clearly ancestors of today's global trade and services.  In the nineteenth century, some manufacturing companies in the United States, Britain, and Europe were increasingly transnational.  Especially in the last 50 years, the number of multinationals in the global economy has increased. Currently, the definition for TNC is a company that has the authority to coordinate and control business in more than one country. The TNC can be regarded as a 'global' company in its geographical scope. In fact, multinational corporations are all forms and sizes of so-called global corporations.
 Overall TNC activity is generally foreign direct investment.  FDI occurs when one company in one country makes a controlled investment when one company in another country or a company establishes branch or subsidiary operations elsewhere.  For decades, especially FDI has grown at a rapid pace.  FDI growth continues to outpace global trade growth.  TNC started with the majority of the world's multinational companies as a leading integration force in the global economy.  In fact, most of the FDI consists of cross-investment between developed countries.  In developing countries, there is a significant increase in FDI, but this is far less than the popular one.  Nonetheless, the number of TNC in advanced developing countries is undoubtedly growing.  Despite recent developments in TNC activities, a significant portion of the investment continues in the market.  And for that reason, the company may have reached saturation.  There are two main ways in which companies develop transnational activities. one that is known greenfield investment and the other that is part of a merger and acquisition or strategic collaboration through an agreement with another company.  Greenfield investment is simply an entirely new facility.  However, greenfield investment is not the most common approach.  Building entirely new facilities, especially large-scale buildings is risky.  For this reason, the company either prefers merging with a foreign company with a relationship with an existing company, or acquires another company to establish or expand its presence in a particular overseas office.  Indeed, most of the growth of FDI in the world in recent years has consisted of mergers and acquisitions.  In other words, it involves the transfer of ownership and control of the two companies.  Another widely used method of TNC extension is to establish a strategic partnership with one or more TNCs.  This is a multinational strategy of many companies. The interdependence between partner companies is becoming more and more diversified.
 Strategic alliances that involve mergers and acquisitions with completely different identities of the merger partner usually focus on a particular business.  They engage in formal contracts to achieve specific objectives among companies to pursue specific strategic goals.  For example, they share the cost, uncertainty and risk of entering a particular market.  And sharing technology in R & D and new product development.  Synergy is achieved by collecting resources and capabilities and rationalizing production.  Those advocating strategic alliances argue that cooperation is a mutually beneficial enterprise, but critics point out that there is a risk that competitors will lose core skills.  Nonetheless, the proliferation of such alliances enables TNC operations in the global economy.  First, in the order of TNC development, the overseas market is usually provided by direct exports utilizing local independent sales agents.  Second, as local demand increases, it may be desirable for the TNC to closely control its own demand.  the nature of the TNC network in general is very important.  Location and geography are still important, and they are fundamentally related to the way the company is produced and how it is done. Every business company includes the most geographically diverse TNC, Cultural, social, political, and economic characteristics are produced through complex processes. So the TNC is hold with those characteristics and then interacts with the locality specific characteristics of the country and the community.  Another reason is that they are embedded in the social system of production specific to their particular society.  Economic performance is formed by the entire social production system in which the enterprise exists.  There is a unique obstacle to the convergence of social systems in the production of different societies, but the very interrelationships of the modern world mean that the economy is transcending its boundaries quickly across borders. It is a process of collaboration of Production, distribution and consumption network.  These networks are getting bigger and bigger.  As a result, a TNC can be considered a high density network in a corporate network, just like a business.  Due to the different political, cultural and socially distributed geographical distribution, TNC is much more difficult to coordinate and control than other companies.
 The geographic scope of these multinational production networks varies greatly.  In fact, some of these networks can be described as truly global.  However, the group of multinational organizations for these networks can have a strong regional dimension of the network.  Regional strategies have many advantages in terms of globalization efficiency.

2. Learned things
 Through this reading contents, I was able to learn about a transnational corporation that leads the world economy.  Transnational corporations are extremely complex and dynamic.  In a very real sense, the world economy can be described as the different types of active complex connected local clusters are included in different forms.  As a result, geographical coverage is very diverse, and some multinational corporations are global.  And inevitably creates tensions between multinational corporations and countries, communities, labor, consumers, and civil society organizations in the global economy.  The basis of the power of transnational corporations lies in their potential ability to exploit geographical differences.  And the position of transnational corporations is powerful, but they also know that they do not have absolute power.


3. Discussion Point
 As the economy is globalized, the range of activities of transnational corporations is also increasing.  In addition to the examples of transnational corporations in Korea, we will discuss how transnational corporations can develop in Korea and how they can stand out in certain fields.  I would also want to find out what kind of problems can arise with the emergence of transnational corporations.