Case Study Of Freeport Indonesia

After World War II, the United States began rebuilding itself and the economy. Along with the expanding economy comes globalization. Each country has its own set of economic policies for trade. The countries discussed in the research provided include the United States, China, Asia, Latin America and the Sub-Saharan regions. Each of these countries has their own policies, imports, exports, and wages. All of these components play a key role in globalization.

These companies have been responsible for creating job opportunites, boosting the economy and creating a better soucer of living for the citizens of these countries. “The vast numbers of MNCs are located all around the world; they vary widely in size and interest. Their intention is to take a package of capital, technology, managerial know-how, or marketing skills to carry out production or business services abroad. Their effects are far reaching, affecting the daily lifestyle of the average consumer. Partly because of their size, MNCs tend to dominate the sectors in which they specialize. As a result, their transnational business ventures offer much debate about their impact on developing countries; many arguments have been proposed on this subject alone” ( ).

The rapid development of economy promotes the development of multinational companies, which have become a general form rather than a special form of a company. Multinational companies carry a lot of money, production technology, management expertise and sales channels to expand their business around the world. There is no doubt that multinational companies will become the subject of an act of international relations and play an increasingly large impact on international relations.

Despite number of analytical work, publication on globalization the subject remain unspecifiable or rather should say ill-defined regarding concept, history, and economic, cultural and political involvement (Scholte 2005). Yet theorists, researchers try to describe the term or the phenomena as simply as possible. There are two ways the word “globalization” can be used again adding more to the confusion. It can be used in a positive way describing a process into the global economy and another in a systematic way prescribing a know-how of progress founded on rapid integration with the global economy. Trade, investment and finance at the international level are the three economic expositions of the phenomenon. It is about development of economic activities not within but beyond national borders. It can simply be described as a process which has association with growing free economy, interdependency based on economy and thickening economic integration in the world economy. (Nayyar 2006).

The world has continuously changed for improvements and innovations. The earth is not huge enough to limit human interactions. People are shifting from a world in which national economies were isolated from each other by barriers and cultures to cross border trade and investments. Nowadays, people around the world are more connected to each other than ever before. The revolution of sciences and technologies has gradually improved human livings. It is much easier for people to travel, communicate and do business internationally. As a result, demand for expanding economy to countries urges the foundation of globalization. Integrating into the global economy offers multinational companies not only opportunities to disperse their industries

There is a growing number of firms in the developing world, which have participated in overseas business and many have even started merging or acquiring their foreign counterparts. Firms in the developed world are well-known to invest in Developing countries, which in return benefits the foreign firm and the local stakeholders. However, it is argued that many foreign firms exploit the resources and labour of the under-developed countries.

Increasing internationalization of the three circuits of capital is driving globalization: International trade (the global marketplace), international finance (the global casino) and international production (the global assembly-line), and the concomitant, increasing international concentration and centralization of capital. This characteristic of contemporary globalization, which distinguishes it from previous periods of international economic integration, has been a major contributor to the break-up of the institutional pillars of the postwar productive order, and is propelling further globalization.

Thus, the multinational corporation is intrinsically a force for progress in the sense that its very existence participates in the maximisation of profits by eliminating or reducing the harmful effects of market imperfections. Internalisation theory, and other mainstream theories of the multinational firm such as eclectic theory are useful in this analysis since they establish the nature of MNCs as behaving in a way that is the most efficient, and thus beneficial to them. If we accept that firms are beneficial to the world in that they create wealth, then MNCs are a force for progress. However, the buck stops here for these theories. Although they provide insight into the nature and behaviour of firms, mainstream theories of economics and international business do not provide any analysis of the consequences firms’ behaviour has on less developed countries (LDCs) and the world order . As we expand our definition of progress, or the field of the visible in terms of the harm that MNCs can cause, then a different picture is painted.

Multinational Corporation may be defined as a group of people who works together in a private sector that produces whether goods or services and also brings into existence financial surpluses as target and also own assets used for production in more than one national unit in a global complex of nation states. The examples of multinational corporation companies are Coca Cola, Air France, chevron and so many others. Some of their advantages is that they operates massively, their assets and sales run into billions of dollars and make supernatural profits. They also operate all over the world, their control resides in the hand of individual organization but its interest and transaction spreads across national boundaries. It is also oligopolistic in structure, this occurs through the process of merger and turnover, they acquire awesome power coupled with it giant size makes in oligopolistic in character. They grow in a spontaneous and unconscious manner. They also operates in collective transfer of assets or resources which takes place in form of packages like equipment, machineries , raw materials, finished products and also managerial services. These are some of the benefits, it provides advanced technology and other technologies that are not in the host country, it also provides advanced capital internally and externally and gives a country the privilege to access global capital market. It allows the host country has access to superior global distribution and marketing

Developing countries lag behind the rest of the world in many aspects of life including economy, education, and welfare. Achieving progress in any of these three areas is important in getting these countries on par or at least closer to the standard of living present in developed nations. Numerous of hypotheses have been posed to tackle and address these issues. This paper examines the aspect of improving the economy and whether or not foreign direct investment by multinational corporations would benefit developing countries. Some may argue, including the renowned artist Frida Kahlo that foreign direct investments may actually lead to a decline in culture and exploitation. However, this paper argues that the economy in developing countries could be significantly improved by properly introducing foreign direct investment by multinational corporations. Foreign direct investment (FDI) made by multinational corporations would spur the economy in developing countries which in turn would lay the groundwork for improvements in other important aspects including education and welfare without a decline in culture and exploitation of citizens.

With globalization and development of advanced communication systems, many firms and corporations are becoming multinational enterprises. The term multinational firm describes the situation in which a firm extends beyond the borders of its individual mother country, state or nation and operates with affiliates and branches in more than two countries. Multinational firms also extend beyond continental boundaries and hence it’s always desirable to understand the reasons and factors which prompt firms to go multinational. In most cases, multinational firms replicate the same products in their host market. However, others distribute the phases of productions beyond their nation boundaries as a way of integrating the whole process (Contessi,

The demand for global service market increases rapidly. The global flow of talents along with the expansion of multinational business are brought in by global technical transmission and economic cooperation. Therefore a multinational company has become a significant participant of globalization.

Today, revenues of the world’s largest multinationals exceed the gross domestic products of a host of countries, multinationals have a global reach not enjoyed by countries and private companies are increasingly being called upon to deliver services that were once the domain of governments. The power relationship between country states and multinational companies has shifted dramatically over the past 40 years and with that, the

In the text International Business, globalization is defined as the “acceleration and extension of the interdependence of economic and business activities across national boundaries (p 3)”. Many multinational corporations manufacture products in different nations and selling internationally to different nations. With the constant flow of goods and service help the integration of economies and societies. Since the recent boom of technology has boosted the pace of the integrations of the global markets and became a powerful component of globalization. Many key components that are can be successful or downfall of international globalization; such as

Over the past several decades, the economies of the world have become increasingly linked, through expanded international trade in services as well as primary and manufactured goods, through portfolio investments such as international loans and purchases of stock, and through direct foreign investment, especially on the part of large multinational corporations. At the same time, foreign aid has increased much less in real terms and has become dwarfed by the now much larger flows of both private capital, and remittances. These linkages have had a marked effect on the developing world. But developing countries are importing and exporting more from each other, as well as