Account for the growth of TNCs and evaluate their impacts at the global and national scales

A multinational corporation houses other offices and factories in different countries and regions (Investopedia.,2014). In addition, these corporations tend to have a centralized office where global management is carried out. Becoming a multinational corporation has the advantages of vertical and horizontal economies of scale as well increased market share due to the increased outputs (Investopedia.,2014). To contrast these corporations can be portrayed as entities that seek political and economic control. While this perception is not always the case it does occasionally occur because big businesses can impact the countries they are in.

This study would not only define how Tata motors(indian multinational) and IKEA’s(European MNC) expansion strategy could be classified and generalized into the above stated categories, but also how contrasting or similar their expansion strategies were, these expansions may seem to be tempting cecause of high profits and economies of scale but in practice it is immensely complex. It is important to understand why these Firms did expand, though companies internationally have experienced many benefits, turning them into potential global leaders in their respective sectors, the intricacy of the international business also brings a lot of risk with it.

The world has seen a huge rise in the number of Transnational Corporations. Since the 1970s the number of TNCs has risen from 7,000 to over 60,000. To begin with, around 95%

TNCs dominate industrial production including manufacturing and services, therefore further dividing the gap between the rich and the poor, and being the main leader of globalisation as a consequence.

Businesses today operate an environment that differs greatly from anytime millennia, centuries or even decades ago. The pace of businesses has increased exponentially with the continuous improvement of information technology, telecommunications and geolocation supported by satellites and progressively more efficient modes of transportation and mechanization. The ability to move products globally overnight, increasing levels of automation, and collaboration instantaneously via virtual means has forever changed and reduced traditional barriers businesses face while creating a myriad of new challenges, risks and opportunities.

I feel that transnational cooperation’s have had a large impact on globalisation. A transnational corporation (Multinational Corporation) TNC is a corporation or enterprise that manages production establishments or delivers services in at least two countries such as Coca Cola and Nike. Very large multinationals have budgets that exceed those of many countries. Multinational corporations can have a powerful influence in international relations and local economies and play an important role in globalisation. I feel that the economy is the most significant motivating force

In many poor countries, their local economies can be boosted by the TNC companies as they also earn part of the profit of the company. In addition, it will create more jobs for the local population. However, most of the jobs are payed very little or are either taken over by the newly created technology.

Nucor creates value by giving the managers of each plant the independency in decision making that mean, They should make the Decisions quickly without back or wait any orders or permission from head office .Aldo they can use the resources from other plants or from the market Moreover, they use modern equipment to produce high quality products in a competitive prices. And they try to make good promotions for attracting their customers.

(Hopkins, 2006) Multi-national companies (MNC) such as Wal-Mart have revenues which exceed the gross domestic product of nations. MNCs dominate the global marketplace.

Nucor has created a company that is both internally and externally fit to the environment. The firm responds well to the driving forces of the industry and has opted to take a low-cost strategy with the relentless pursuit of innovation and strong employee productivity in order to combat the issues of the steel industry. In 2000, Nucor decided to expand its operations by acquiring new firms and new factories while continuing with its low-cost operations. The competitive strategy of Nucor has helped it become one of the leading manufacturers of steel and steel products in the United States.

The term ‘corporation’ encompasses a range of corporate structures including subsidiaries, holding companies, and joint ventures. ‘Transnational corporations’ are those corporations (and their related entities) that have operations in more than one state. Such entities are able to operate across national borders, sell products and source labour in multiple markets, and shift production, resources and expertise as and when required. There is no doubt that global firms are engines of prosperity and growth across many areas of the world. Corporations generate valuable employment and educational opportunities, revive living conditions in flagging communities with much-needed investment and new technologies, and enhance the prosperity of those states able to ride the globalization wave.

As they grow, their dominance becomes stronger, and their influence over the economy is significant. These mega cities in developing nations are often major centres of manufacturing and labour intensive work. They have a high population and unemployment rate, which leads to cheap labour, as companies are able to employ large amounts of people at a low cost. This benefit therefore makes mega cities attractive destinations for TNCs. New York for example, has the United Nations headquarters located within it, as well as Google, American Express, and J.P.Morgan, and London, has the headquarters of Citi Bank, and Goldman Sachs. Therefore, TNCs influence in the global economy allows them to become chief competitors in the global market, and that developing nations are dependent on world cities for employment, and trade, and this gives world cities their economic authority.

The objective of MNC to operate in other countries is to gain competitive advantage through several ways. Firstly, MNC is able to take advantage of difference in country-specific circumstances. For example, MNC may choose to locate its productions in less developed country like Vietnam to gain cheap labor cost. Secondly,

The enterprises that operate in numerous countries to produce or provide services outside their original countries can be identified as Multinational Corporations (MNCs), or Transnational Corporations (TNCs). Usually, an MNC can produce at least 25 percent of its world output outside of its country of origin. Recently, a new breed of MNC emerges thanks to Internet based communication tools. They begin their operations in different countries very early on. Because they are small businesses, these companies are being called micro-multinationals to distinguish them from larger MNCs.

With a GDP growth of almost 7 percent1, India is one of the most promising and fastest-growing economies in the world. But despite the huge potential of the country, the performance of Multinational Corporations (MNCs) in India has been decidedly mixed. Many MNCs which have succeeded remarkably elsewhere in the world have yet to make a significant impact in India. The market entry and penetration strategies that have worked so well for these companies in other countries have been for less successful in India. Many MNCs have struggled to understand Indian customers and come up with suitable products and services. At the same time, some MNCs have done pretty well for themselves. Why have