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Multinational Corporations
Multinational Corporations
Published: 2012/02/27
Channel: allensens
What is a Multinational Corporation?
What is a Multinational Corporation?
Published: 2015/02/03
Channel: Investor Trading Academy
Top 10 Secrets Multinational Corporations Don
Top 10 Secrets Multinational Corporations Don't Want You To Know
Published: 2017/06/03
Channel: Be Amazed
Word of the Day: Multinational Corporation (MNC)
Word of the Day: Multinational Corporation (MNC)
Published: 2011/11/22
Channel: RT America
Multinational Corporations   Video   Investopedia
Multinational Corporations Video Investopedia
Published: 2016/02/01
Channel: Inimfon100
Multinational Corporation
Multinational Corporation
Published: 2016/02/23
Channel: AlexLau28281
Features, Merits and Demerits of Multinational Corporations Cl XI Bussiness Studies by Ruby Singh
Features, Merits and Demerits of Multinational Corporations Cl XI Bussiness Studies by Ruby Singh
Published: 2016/01/22
Channel: Goyal Bros. Prakashan - Video Lectures
Multinational Enterprises and their Effect Internationally
Multinational Enterprises and their Effect Internationally
Published: 2014/05/09
Channel: Brandon Alicea
Multinational Corporations   Advantages & Disavantages
Multinational Corporations Advantages & Disavantages
Published: 2017/05/09
Channel: International Business MBA
The Truth About Multinational Corporations pt 2 360p
The Truth About Multinational Corporations pt 2 360p
Published: 2012/11/13
Channel: MatzerMike
Globalization & Multinational Companies GCE AS/As Business studies
Globalization & Multinational Companies GCE AS/As Business studies
Published: 2015/07/27
Channel: suraj251997
Multinational corporations and huge profits - Milton Friedman
Multinational corporations and huge profits - Milton Friedman
Published: 2017/01/31
Channel: Simply explained
The transformational power of multinational business | Colin Mayer | TEDxEastEnd
The transformational power of multinational business | Colin Mayer | TEDxEastEnd
Published: 2015/02/20
Channel: TEDx Talks
Multinational Companies & Their impact on host countries
Multinational Companies & Their impact on host countries
Published: 2016/12/05
Channel: Prayash Neupane
How do multinational corporations affect the world?
How do multinational corporations affect the world?
Published: 2016/05/23
Channel: Noah Melton
Multinational Corporations (MNCs in international business)
Multinational Corporations (MNCs in international business)
Published: 2016/01/01
Channel: Vidya-mitra
Multinational enterprises strategies.
Multinational enterprises strategies.
Published: 2015/02/23
Channel: Giovanna Alapizco
Multinational Corporations - Jamat-al-Maut [2014]
Multinational Corporations - Jamat-al-Maut [2014]
Published: 2014/04/02
Channel: Vinod Karki
Multinational Corporations
Multinational Corporations
Published: 2017/09/07
Channel: Vidya-mitra
Basics of Multinational Corporations
Basics of Multinational Corporations
Published: 2015/09/16
Channel: Marginal Revolution University
Chapter 1 - Multinational Financial Management
Chapter 1 - Multinational Financial Management
Published: 2015/03/28
Channel: Gopala Vasudevan
Multinational Corporation and Globalization - Chapter 13 | Managerial Economics
Multinational Corporation and Globalization - Chapter 13 | Managerial Economics
Published: 2017/05/25
Channel: Get Knowledge
Multinational corporations - Professor Marina Papanastassiou
Multinational corporations - Professor Marina Papanastassiou
Published: 2013/05/07
Channel: Middlesex University
Napalm Death - Multinational Corporations
Napalm Death - Multinational Corporations
Published: 2011/08/06
Channel: The Grind Show
MonSpace Multinational Corp
MonSpace Multinational Corp
Published: 2017/08/13
Channel: mike monis
Multinationals: curse or blessing for the developing world?
Multinationals: curse or blessing for the developing world?
Published: 2015/01/12
Channel: worldwrite
Multinational Corporations - Live at UNORTHODOX (Full Set)
Multinational Corporations - Live at UNORTHODOX (Full Set)
Published: 2016/01/22
Channel: MxC Grind
Why we need more powerful multinational corporations, Conference with Professor William H. Starbuck
Why we need more powerful multinational corporations, Conference with Professor William H. Starbuck
Published: 2011/06/10
Channel: ESSEC Business School
Airbus - the history of the European multinational corporation
Airbus - the history of the European multinational corporation
Published: 2017/11/07
Channel: Skyships Eng
The Corporation
The Corporation
Published: 2012/07/22
Channel: TheAzureWhale
Multinational Corporations Take a Second Look at China
Multinational Corporations Take a Second Look at China
Published: 2011/12/09
Channel: NTDTV
Le Multinazionali, il film di denuncia. - Multinational corporations, the protest film.
Le Multinazionali, il film di denuncia. - Multinational corporations, the protest film.
Published: 2012/06/20
Channel: GRANDE MADRE TERRA
Hitler as the CEO of a multinational corporation (parody)
Hitler as the CEO of a multinational corporation (parody)
Published: 2010/12/11
Channel: apolyseisintracom
Dancing on the ruins of multinational corporations.
Dancing on the ruins of multinational corporations.
Published: 2006/08/19
Channel: undercurrentspaulo
Multinational Corporations
Multinational Corporations
Published: 2012/11/05
Channel: Tamu Petra Browne
Introduction to Multinational Corporation Security Management
Introduction to Multinational Corporation Security Management
Published: 2013/05/14
Channel: Chris Silva
Globalization- trade and transnational corporations | Society and Culture | MCAT | Khan Academy
Globalization- trade and transnational corporations | Society and Culture | MCAT | Khan Academy
Published: 2014/05/01
Channel: khanacademymedicine
Napalm Death - Multinational Corporations
Napalm Death - Multinational Corporations
Published: 2014/01/13
Channel: Earache Catalog
McDonalds MultiNational Corporation
McDonalds MultiNational Corporation
Published: 2011/08/02
Channel: Vanessa Baker
Dancing on the ruins of multinational corporations
Dancing on the ruins of multinational corporations
Published: 2010/03/13
Channel: visionontv
What Are the Advantages of Having a Multinational Corporation in the Host Nati... : The Tech Factor
What Are the Advantages of Having a Multinational Corporation in the Host Nati... : The Tech Factor
Published: 2013/08/25
Channel: eHowTech
Multinational Corporations (MNCs) - International Studies
Multinational Corporations (MNCs) - International Studies
Published: 2014/03/01
Channel: codelack
Multinational Corporations - L.P.C.
Multinational Corporations - L.P.C.
Published: 2014/08/10
Channel: MxC Grind
Multinational Corporations
Multinational Corporations
Published: 2017/05/08
Channel: Global Economy
Multinational  Capital Budgeting (BSE)
Multinational Capital Budgeting (BSE)
Published: 2016/02/24
Channel: Vidya-mitra
Top 10 Multinational Companies in India
Top 10 Multinational Companies in India
Published: 2015/12/01
Channel: ASP
Multinational Corporations and Rural India
Multinational Corporations and Rural India
Published: 2010/05/03
Channel: KnowledgeAtWharton
Evil Cell (Multinational corporation)
Evil Cell (Multinational corporation)
Published: 2007/03/19
Channel: MrMojoRisinn
Multinational Corporations - Ehsas-e-Jurm
Multinational Corporations - Ehsas-e-Jurm
Published: 2014/08/14
Channel: MxC Grind
Multinational Corporations 2
Multinational Corporations 2
Published: 2016/07/21
Channel: Duncan Pelly
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WIKIPEDIA ARTICLE

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The Dutch East India Company (also known by the abbreviation “VOC” in Dutch), the world's first formally listed public company, started off as a spice trader. The VOC is often considered by many to be the first historical model of a multinational corporation (or transnational corporation) in its modern sense.[1][2][3][4]

A multinational corporation or worldwide enterprise[5] is a corporate organization that owns or controls production of goods or services in two or more countries other than their home country.[6]

Chérie G. Knight A multinational corporation (MNC) can also be referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation, or a stateless corporation.[7] There are subtle but real differences between these three labels, as well as those labels of multinational corporation and a worldwide enterprise.

Overview[edit]

Toyota is one of the world's largest multinational corporation(s) with their headquarters in Toyota City, Japan.
Toyota is one of the world's largest multinational corporations with their headquarters in Toyota City, Japan.

A multinational corporation (MNC) is usually a large corporation incorporated in one country which produces or sells goods or services in various countries.[8] The two main characteristics of MNCs are their large size and the fact that their worldwide activities are centrally controlled by the parent companies.[9]

  • Importing and exporting goods and services
  • Making significant investments in a foreign country
  • Buying and selling licenses in foreign markets
  • Engaging in contract manufacturing—permitting a local manufacturer in a foreign country to produce their products
  • Opening manufacturing facilities or assembly operations in foreign countries

MNCs may gain from their global presence in a variety of ways. First of all, MNCs can benefit from the economy of scale by spreading R&D expenditures and advertising costs over their global sales, pooling global purchasing power over suppliers, and utilizing their technological and managerial know-how globally with minimal additional costs. Furthermore, MNCs can use their global presence to take advantage of underpriced labor services available in certain developing countries, and gain access to special R&D capabilities residing in advanced foreign countries.[10]

The problem of moral and legal constraints upon the behavior of multinational corporations, given that they are effectively "stateless" actors, is one of several urgent global socioeconomic problems that emerged during the late twentieth century.[11]

Potentially, the best concept for analyzing society's governance limitations over modern corporations is the concept of "stateless corporations". Coined at least as early as 1990 in Business Week, the conception was theoretically clarified in 1992: that an empirical strategy for defining a stateless corporation is with analytical tools at the intersection between demographic analysis and transportation research. This intersection is known as logistics management, and it describes the importance of rapidly increasing global mobility of resources. In a long history of analysis of multinational corporations we are some quarter century into an era of stateless corporations - corporations which meet the realities of the needs of source materials on a worldwide basis and to produce and customize products for individual countries.[12]

One of the first multinational business organizations, the East India Company, arose in 1600.[13] After the East India Company, came the Dutch East India Company, founded March 20, 1602, which would become the largest company in the world for nearly 200 years.[14]

The main characteristics of multinational companies are:

  • In general, there is a national strength of large companies as the main body, in the way of foreign direct investment or acquire local enterprises, established subsidiaries or branches in many countries;
  • It usually has a complete decision-making system and the highest decision-making center, each subsidiary or branch has its own decision-making body, according to their different features and operations to make decisions, but its decision must be subordinated to the highest decision-making center;
  • MNCs seek markets in worldwide and rational production layout, professional fixed-point production, fixed-point sales products, in order to achieve maximum profit;
  • Due to strong economic and technical strength, with fast information transmission, as well as funding for rapid cross-border transfers, the multinational has stronger competitiveness in the world;
  • Many large multinational companies have varying degrees of monopoly in some area, due to economic and technical strength or production advantages.

Theoretical background[edit]

The actions of multinational corporations are strongly supported by economic liberalism and free market system in a globalized international society. According to the economic realist view, individuals act in rational ways to maximize their self-interest and therefore, when individuals act rationally, markets are created and they function best in free market system where there is little government interference. As a result, international wealth is maximized with free exchange of goods and services.[15]

To many economic liberals, multinational corporations are the vanguard of the liberal order.[16] They are the embodiment par excellence of the liberal ideal of an interdependent world economy. They have taken the integration of national economies beyond trade and money to the internationalization of production. For the first time in history, production, marketing, and investment are being organized on a global scale rather than in terms of isolated national economies.[17]

International business is also a specialist field of academic research. Economic theories of the multinational corporation include internalization theory and the eclectic paradigm. The latter is also known as the OLI framework.

The other theoretical dimension of the role of multinational corporations concerns the relationship between the globalization of economic engagement and the culture of national and local responses. This has a history of self-conscious cultural management going back at least to the 1960s. For example:

Transnational corporations[edit]

The United East India Company (VOC), a pioneering early model of transnational corporations at the dawn of modern capitalism.
17th-century etching of the Oost-Indisch Huis (Dutch for "East India House"), the main headquarters of the United East India Company (VOC) in Amsterdam.
The Fort Batavia, seen from West Kali Besar (Andries Beeckman, c. 1656). While the VOC established its overseas administrative center, as the second headquarters, in Batavia (present-day Jakarta), the company also had important operations elsewhere.

A transnational corporation differs from a traditional multinational corporation in that it does not identify itself with one national home. While traditional multinational corporations are national companies with foreign subsidiaries,[19] transnational corporations spread out their operations in many countries to sustain high levels of local responsiveness.[20]

An example of a transnational corporation is Nestlé who employ senior executives from many countries and tries to make decisions from a global perspective rather than from one centralized headquarters.[21]

Another example is Royal Dutch Shell, whose headquarters are in The Hague, Netherlands, but whose registered office and main executive body are headquartered in London, United Kingdom.

Multinational enterprise[edit]

The multinational enterprise (MNE) is the term used by international economist and similarly defined with the multinational corporation (MNC) as an enterprise that controls and manages production establishments, known as plants located in at least two countries.[22] The multinational enterprise (MNE) will engage in foreign direct investment (FDI) as the firm makes direct investments in host country plants for equity ownership and managerial control to avoid some transaction costs.[23]

A few examples of MNEs are Apple Inc. and Nike Inc. who maximize economies of scale through foreign direct investments in international plants to manufacture value chain stages of production.

Multinational corporation and colonialism[edit]

The history of multinational corporations is closely intertwined the history of colonialism, with the first multinational corporations founded to undertake colonial expeditions at the behest of their European monarchical patrons.[24] Prior to the era of New Imperialism, a majority European colonies not held by the Spanish and Portuguese crowns were administered by chartered multinational corporations.[25] Examples of such corporations include the British East India Company,[26] the Swedish Africa Company, and the Hudson’s Bay Company.[27] These early corporations facilitated colonialism by engaging in international trade and exploration, and creating colonial trading posts.[28] Many of these corporations, such as the South Australia Company and the Virginia Company, played a direct role in formal colonization by creating and maintaining settler colonies.[28] Without exception these early corporations created differential economic outcomes between their home country and their colonies via a process of exploiting colonial resources and labour, and investing the resultant profits and net gain in the home country.[29] The end result of this process was the enrichment of the colonizer and the impoverishment of the colonized.[30] Some multinational corporations, such as the Royal African Company, were also responsible for the logistical component of the Atlantic slave trade,[31] maintaining the ships and ports required for this vast enterprise. During the 19th century, formal corporate rule over colonial holdings largely gave way to state-controlled colonies,[32][33] however corporate control over colonial economic affairs persisted in a majority of colonies.[28][32]

During the process of decolonization, the European colonial charter companies were disbanded,[28] with the final colonial corporation, the Mozambique Company, dissolving in 1972. However the economic impact of corporate colonial exploitation has proved to be lasting and far reaching,[34] with some commentators asserting that this impact is among the chief causes of contemporary global income inequality.[30]

Contemporary critics of multinational corporations have charged that some present day multinational corporations follow the pattern of exploitation and differential wealth distribution established by the now defunct colonial charter corporations, particularly with regards to corporations based in the developed world that operate resource extraction enterprises in the developing world,[35] such as Royal Dutch Shell, and Barrick Gold. Some of these critics argue that the operations of multinational corporations in the developing world take place within the broader context of neocolonialism.[36]

However, multinational corporations from emerging markets are playing an ever-greater role, increasingly impacting the global economy.[37]

Criticism of multinationals[edit]

Anti-corporate advocates criticize multinational corporations for entering countries that have low human rights or environmental standards.[38] In the world economy facilitated by multinational corporations, capital will increasingly be able to play workers, communities, and nations off against one another as they demand tax, regulation and wage concessions while threatening to move. In other words, increased mobility of multinational corporations benefit capital while workers and communities lose. Some negative outcomes generated by multinational corporations include increased inequality, unemployment, and wage stagnation.[39]

The aggressive use of tax avoidance schemes allows multinational corporations to gain competitive advantages over small and medium-sized enterprises.[40] Organizations such as the Tax Justice Network criticize governments for allowing multinational organizations to escape tax since less money can be spent for public services.[41]

The 5 Cons of Multinational Corporations

1. The Market Dominance of Multinational Corporations - The market dominance of multinational corporations makes it hard for the local small firms to succeed and thrive. For instance, there are arguments stating that the larger supermarkets squeeze out a notable margin of the local corner stores that lead to lesser diversity.

2. Consumer’s Expenses - Companies are usually interested at the consumer’s expense. The multinational companies commonly have the power of monopoly that gives them the chance of making excess profit.

3. Pushing Local Firms Out Of Business - In the developing economies, these giant multinationals use the economies of scale for pushing the local firms out of their businesses.

4. Criticized For Using "Slave Labor" - Multinational corporations are being criticized for using the so-called slave labor wherein the workers are paid with very small wages.

5. Environment Threat - For the sake of profit, these global companies commonly contribute to pollution as well as make use of the non-renewable resources that can be a threat to the environment.

See also[edit]

References[edit]

  1. ^ Brook, Timothy: Vermeer's Hat: The Seventeenth Century and the Dawn of the Global World. (Bloomsbury Press, 2008, pp. 288, ISBN 978-1596915992)
  2. ^ Sayle, Murray (5 Apr 2001). "Japan goes Dutch". London Review of Books, Vol. 23 No. 7. Retrieved 8 August 2017. 
  3. ^ Phelan, Ben (7 Jan 2013). "Dutch East India Company: The World's First Multinational". PBS.org. Retrieved 8 August 2017. 
  4. ^ Taylor, Bryan (6 Nov 2013). "The Rise and Fall of the Largest Corporation in History". BusinessInsider.com. Retrieved 8 August 2017. 
  5. ^ Pitelis, Christos; Roger Sugden (2000). The nature of the transnational firm. Routledge. p. H72. ISBN 0-415-16787-6. 
  6. ^ "Multinational Corporations". 
  7. ^ Roy D. Voorhees, Emerson L. Seim, and John I. Coppett, "Global Logistics and Stateless Corporations," Transportation Practitioners Journal 59, 2 (Winter 1992): 144-51.
  8. ^ Doob, Christopher M. (2013). Social Inequality and Social Stratification in US Society. Pearson Education Inc. 
  9. ^ http://trcollege.net/study-material/24-economics/47-role-of-multinational-corporations.  Missing or empty |title= (help)
  10. ^ Eun, Cheol S.; Resnick, Bruce G. (2013). International Financial Management,6th Edition. Beijing Chengxin Weiye Printing Inc. 
  11. ^ Koenig-Archibugi, Mathias. "Transnational Corporations and Public Accountability" (PDF). Gary 2004: 106. Retrieved 2 February 2015.  Krugman, Paul (20 March 1997). "In Praise of Cheap Labor: Bad Jobs at Bad Wages Are Better than No Jobs at All". Slate. Retrieved 2 February 2015. 
  12. ^ Holstein, William J. et al., "The Stateless Corporation," Business Week (May 14, 1990), p. 98. Roy D. Voorhees, Emerson L. Seim, and John I. Coppett, "Global Logistics and Stateless Corporations", Transportation Practitioners Journal 59, 2 (Winter 1992): 144-51.
  13. ^ "GlobalInc. An Atlas of The Multinational Corporation" Medard Gabel & Henry Bruner, New York: The New Press , 2003. ISBN 1-56584-727-X". 
  14. ^ http://www.kb.nl/themas/geschiedenis-en-cultuur/koloniaal-verleden/voc-1602-1799
  15. ^ Mingst, Karen A. (2014). Essentials of international relations. W. W. Norton & Company. p. 310. ISBN 978-0-393-92195-3. 
  16. ^ Mingst, Karen A. (2014). Essentials of international relations. W. W. Norton & Company. p. 311. ISBN 978-0-393-92195-3. 
  17. ^ Gilpin, Robert (1975). Three models of the future. International Organization. p. 39. 
  18. ^ James, Paul (1983). "Australia in the Corporate Image: A New Nationalism". Arena (no. 63): p. 68.  See also, Richard Barnet and Ronald Muller, Global Reach: The Power of Multinational Corporations, New York, Simon and Schuster, 1974, p. 30. On page 21 Barnet and Muller quote the Chairman of the Unilever Corporation as saying: “The Nation-State will not wither away. A positive role will have to be found for it.”
  19. ^ Drucker, Peter F. (1997). The Global Economy and the Nation State. Council on Foreign Relations. p. 167. 
  20. ^ Case study: The Relationship between the Structure/Strategy of Multinational Corporations and Patterns of Knowledge Sharing within them (PDF). Oxford University Press. 2009. 
  21. ^ Schermerhorn, John R. (2009). Exploring Management. John Wiley and Sons. p. 387. ISBN 0-470-16964-8. 
  22. ^ E., Caves, Richard (2007). Multinational enterprise and economic analysis. Cambridge University Press. p. 1. ISBN 9780521677530. OCLC 272997700. 
  23. ^ E., Caves, Richard (2007). Multinational enterprise and economic analysis. Cambridge University Press. p. 69. ISBN 9780521677530. OCLC 272997700. 
  24. ^ Jeffrey, Alex, and Joe Painter. "Imperialism and Post colonialism." Political Geography: An Introduction to Space and Power. London: SAGE, 2009. 174-75. Print.
  25. ^ Robins, Nick. "This Imperious Company." The Corporation That Changed the World How the East India Company Shaped the Modern Multinational. London: Pluto, 2006. 24-25. Print.
  26. ^ Robins, Nick. The Corporation That Changed the World How the East India Company Shaped the Modern Multinational. London: Pluto, 2006. Print.
  27. ^ Royle, Stephen A. Company, Crown and Colony: The Hudson's Bay Company and Territorial Endeavor in Western Canada. London: I.B. Tauris, 2011. Print.
  28. ^ a b c d Micklethwait, John, and Adrian Wooldridge. 2003. The company: A short history of a revolutionary idea. New York: Modern Library.
  29. ^ Howe, Stephen. "Empire by Sea." Empire: A Very Short Introduction. Oxford: Oxford UP, 2002. 77-80. Print.
  30. ^ a b Angeles, Luis. "Income Inequality and Colonialism" (PDF). European Economic Review 51.5 (2007): 1155-176. 
  31. ^ Howe, Stephen. "Empire by Sea." Empire: A Very Short Introduction. Oxford: Oxford UP, 2002. 67. Print.
  32. ^ a b Jeffrey, Alex, and Joe Painter. "Imperialism and Postcolonialism." Political Geography: An Introduction to Space and Power. London: SAGE, 2009. 175. Print.
  33. ^ Robins, Nick. The Corporation That Changed the World How the East India Company Shaped the Modern Multinational. London: Pluto, 2006. 145. Print.
  34. ^ Howe, Stephen. "Empire by Sea." Empire: A Very Short Introduction. Oxford: Oxford UP, 2002. 78-83. Print.
  35. ^ Bakan, Joel. The Corporation: The Pathological Pursuit of Profit and Power. New York: Free, 2004. Print.
  36. ^ Azikiwe, Abayomi. "Burkina Faso: Masses Rise Up Against Neo-Colonial Rule." Global Research. Centre for Research on Globalization, 04 Nov. 2014. Web. 07 Feb. 2015.
  37. ^ "Dossier about emerging-market multinationals". D+C, development and cooperation. December 2015. Retrieved 21 December 2015. 
  38. ^ Marc 'Globalization, Power, and Survival: an Anthropological Perspective', pg 484–486. Anthropological Quarterly Vol.79, No. 3. Institute for Ethnographic Research, 2006
  39. ^ Crotty, Epstein & Kelly (1998). Multinational corps in neo-liberal regime. Cambridge University Press. p. 2. 
  40. ^ Library of the European Parliament Corporate tax avoidance by multinational firms
  41. ^ Tax Justice Network Taxing corporations

External links[edit]

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