What is the relation between economy and globalization?/ Jeong Ye-chan
Summury
Everybody agrees that ultranational enterprises (TNC) are the core of the world economy. In addition, there is a widespread view that they live in the world of global companies. The first manufacturing and production companies outside of Japan were born in the late 19th century, and by 1914, the eve of World War I, many manufacturing companies in the United States, the United Kingdom and some continents of Europe gradually became supernational. Since then, the number of TNC's has increased geometrically. The most comprehensive definition of modern TNC, and the definition supporting the discussion in this chapter, is "enterprise with the power to coordinate and control operations in one or more countries". Unfortunately, there are definitions that cannot be quantified because of the complexity of cross-border companies. This is exactly why they are called global companies, but these large companies operate all over the world and have no loyalty to a particular country or community.
TNC activities are usually measured using statistics on foreign direct investment (FDI). For decades, the FDI has grown at an accelerated rate. The growth of the FDI is continuing to outpace the growth of world trade. Although the share of world FDI originating from developing countries has increased, it is still a slight reality. Most of the world's FDI is heading to developed countries. Less than one-third of the world's total FDI is in developing countries. Opinions in both cases suggest that we are very focused on very few countries, especially in parts of East Asia and Latin America. Nevertheless, the number of TNC originating from major developing countries is definitely increasing and the diversity of TNC in the world economy is increasing. The reasons for Tnc activities can be summarized into two ranges: "market-oriented investment" and "asset-oriented investment." Despite recent developments in TNC activities, many of their investments remain market-oriented. The reason for this may be that companies have peaked in the domestic market. Geographical imbalances in the market are one of the main reasons why companies make supranational investments. The second reason is the fact that assets necessary for companies to produce and sell products and services are geographically unevenly distributed and must be utilized on site. There are two major ways for companies to develop ultra-national activities. One is known as the so-called "greenfield investment" and the other is through involvement with other companies and through mergers and acquisitions or through strategic cooperation. Every business enterprise consists of a very complex and dynamic network of production, distribution and consumption, and is embedded inside. Such networks are controlled or at least coordinated geographically by supranational enterprises. The geographical characteristics of TNC, which are dispersed in different political, cultural, and social environments, make it much more difficult to coordinate and control than companies whose activities are limited to one national space. In other words, more elaborate organizations are needed. The basis of TNC's power lies in the availability and cost of resources and the potential to leverage geographical differences in state policy to transform and re-transform operations. However, this perception of TNC power does not necessarily mean that TNC is always advantageous, which resulted in extremely unstable generalization. All ultranational production networks are influenced by and incorporated into a multi-range regulatory system.
Interesting
Many
companies are forming an alliance network rather than just a single alliance,
but it is interesting that the relationship between partner companies is not
monogamy but a two-way polygamy.
Comments
Post a Comment