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 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.
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?
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