Multinational Corporations : The Current Process Of Globalization

Multinational Corporation - business enterprise with manufacturing, sales, or service subsidiaries in one or more foreign countries, also known as a transnational or international corporation. These corporations originated early in the 20th century and proliferated after World War II.

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.

Multinational Corporations have always been and are currently now under harsh criticism. They are mainly condemned for exploiting resources and workers of third world countries, taking jobs away from the US industry, and destroying local cultures. Although there are negatives of multinational corporations, there are also positives. Business done overseas provides jobs for the people of the host country, improving the standard of living, and transfers technology. Richard T. De George explains moral standards, in five basic theses, that multinational corporations must adhere to in order to maintain corporate ethics.

In the business industry, if businesses want to export their goods and services to other countries, they must become familiar with and adopt international and global strategies. Consequently, there are three types of international and global business strategies. The first type is international, which entails conducting a significant amount of activities outside the home country, yet its focus remains on the home market (Fung, 2014). The second type is multinational, which consists of operating in multiple countries, yet the headquarters is in its home country, not to mention that the competitive advantage will vary by country (Fung, 2014). The third and final type is global, which is when the organization treats the whole world as one market and one source of supply, not to mention, that its competitive advantage is contingent of common brands, standardized products, and global scale production (Fung,

Multinational companies are playing something new and introduced a new role in local and globalization, thus, the rising numbers to achieve and strive from emerging companies in world market. It also defines to accomplish goals in organisational, local, and international management, thus, to be able to success the weakness and strength of the company must recognize to determine their capabilities before the management can proceed to international. It is very important for the multinational companies to increase the product life cycle for growing capabilities and to expand from domestic to globalization. However, many of multinational companies will be facing different dilemmas and obstacles towards to international market. Additionally, many countries have different approach towards to business market. In fact, when domestic company moving to global economy they need to involve in organizational learning and adjust to cooperate well with people and market.

Before entering the international market, it is vital for businesses to consciously understand the language, culture, religion, demographics, political system, legal system, and economy of the foreign country. Failing to recognise these factors may result in business failure or inability to operate in said country. While these factors are important, additionally so are the market, supplies, investors, locations, and competitors in the country of expansion, as they will affect business success. There are multiple methods that businesses can employ in order to expand into the international market; export (both direct and indirect), foreign investment, relocation of production, management contracts and franchising.

Multinational corporations are seen as contributors to problems as well as solutions to economic value creation. As the surge of globalization reduces the gap between continents and international trade increasing, the issues from one country can have an effect in another. As Corporate citizens they are well equipped to influence and create awareness to these international problems.

Globalization can be seen as a process of collaboration and integration of companies, governments, and citizens of the world; the process is driven by international trade and investment and affects societies across the globe, including their cultures and politics. While the concept of globalization has spiked in conversation over the past few decades, the basis and application it is founded upon is not exactly a new innovation as societies have bought and sold with each other for thousands of years on various exchanges. The expansion of globalization, or what we have come to recognize as globalization, has arisen through policies developed within countries that have left the door open to both international and domestic trade. Increases of efficiency in technology have equally propelled globalization as the world has gained the ability of near-immediate, constant communication. Information technology development has assisted "economic actors," or those consumers, investors, and multinational corporations, the tools for rapid growth, such as easy transfer of assets and better ability to analyze the global economy (Globalization101). This project will use the understanding of globalization in an analysis of multinational corporations and their impact on the world. Trade theory, along with research conducted on relevant topics, are utilized when looking at the value of multinational corporations in the world economy, the effects of outsourcing on both the country of origin and

As transnational corporations (TNCs) grow more powerful than some nations and dominate the world market, governments favor neoliberal policies. Neoliberalism, a movement toward less government involvement in the regulation of markets, illustrates the push for open markets and free trade by core countries. (Knox, 299) Since the core countries already gained wealth and power, they possess the means to adopt neoliberal policies without the fear of being exploited. Without state intervention, the TNCs form monopolies and outsource labor to the cheapest bidder without concern for the factory conditions. Therefore, many argue abandoning social goals and standards leads to profitability for businesses. (Knox, 299). Others claim making the markets open and free improves political and social relations between nations. Although businesses are able to make a larger profit without governmental standards, neoliberalism causes deregulation of industry and factories, creating problems for the future generations.

In modern society, we are constantly bombarded with decisions of what retailer or brand to buy supplies from. We no longer have just a supermarket; we have a wide variety of merchandise retailers to choose from. Debating where to go depending on the price of products, or perhaps the quality, is a decision we battle with constantly. Yet, without thinking twice about where the product came from, or its environmental impact, many of us go right ahead pick up the item, toss it in the trolley and rush to pay for because we don’t have time to care about stuff like this. There are other important things, like when to get the car oil changed, right?

The nature of Multinational Corporation does not allow containing a homogeneous structure of policies and practices. As, they operate into many

During the 1990s, trends of globalisation emerged a radical pattern of international commercial activities, which enhanced both economic and political interrelationship worldwide. Today, more than ever, corporations instead of acquiring resources and exporting goods overseas, invest directly in foreign countries and either establish integrated enterprises or acquire subsidiaries, which encompasses the range of their goods and services. Multi-National corporations (MNCs) grid dominates inevitably not only the financial market, but also controls a massive proportion of world’s marketing and technology channels.

This chapter argues that besides democratic institutions in a country, there are other factors that that multinational corporations take into consideration before deciding whether to invest in a country or not. The author refers to this other factor(s) as veto players which he describes as either being individual or collective actors and whose approval warrants policy change in a state.

Globalization has made the globe considerably smaller.  States lines have turned into practically a divider separating certain regions of a massive unitary community.  Businesses are the one that are highly affected by this occurrence.  The virtual closeness of states has made trade and commerce an international event.  Together with these advances, the key standards of business are similarly taken into account.  The discussions in this paper shall involve an analysis of the international expansion strategy utilized by a multinational company.  In this case, the situation surrounding McDonald’s will be taken into consideration.  The

This paper offers a global business analysis of ABC Corporation that is a proposed multinational corporation (MNC) in the auto and IT (information technology) sector based in the United States. It looks at issues of business structure approach to be used by the firm for purposes of global expansion and the strategic advantages and disadvantages of the Global Business approach of the company. Also, the paper will review the structure and strategies of other leading MNCs, the Ford Motor Company (FMC), in comparison. It is important to note that the Global Business strategy of MNC is similar to those of other leading MNCs in the global market like McDonald 's, Target, CISCO, and General Electric among others.