"What is the relation between economy and globalization?"/ Joon Hee Lee

 (Summary)

Transnational corporations (TNC) are the center of the global economy, and we will sympathize with the perception that their influence will be greater than politics. But to be exact, it is not right. TNC have grown exponentially over the past 50 years, and many companies are likely to change into TNC in the future. In this article, the TNC is defined as an entity that has the power to coordinate and control operations in one or more countries. The conglomerates, also called global companies, are doing business around the world, and appear to have no attachment to any particular country or community at all. In reality, however, very few are considered 'global' companies in terms of geographic scope. The majority still maintain more than half of their activities in their home countries, with a variety of forms ranging from companies operating in dozens of countries to TNC operating in only one or two countries. 

There are many reasons why the TNC's activities extend to areas outside of the country, but they are largely affected by imbalances in the market and resources needed. In other words, it is a solution created by the fact that environmental factors formed and distributed differently from country to country are difficult to overcome with their own market activities alone. In the early days, the focus was on getting cheap labor from developing countries, but in recent years, the talk of the town has been shifting to getting the labor force of people with abilities living in various countries. To this end, companies try various ways for transnational activities (Greenfield, Mergers and Acquisitions (M&A), cooperation with other companies, etc.). And the birth and activities of the TNC are expected to be more diverse in the future.

Many would think that the TNC would be free from geographical and political influences. But that is not to be reckoned with. The concept of home country still exists within the TNC, and they continue to be affected by the country's geographical, political and cultural environment. So the identity that a company has is not easily changeable, and within it is a system of a particular society. Thus, the TNC's firm strength and influence in the global economy should be acknowledged, but the simple view that it is always dominant should be avoided. Rather, the state still has control over the TNC's activities and may impose greater restrictions on freedom of action.

(Interesting point)

I learned about TNC by looking at the relationship between economy and globalization, and I think there were many more complex and interesting elements than I thought. Especially, the interesting thing seems to be the development of TNC. TNC also felt that it could not be free from social influence and that it would soon contribute to the creation of various corporate cultures, which made no significant difference between business and other social factors. I also learned some things about how TNC works, and there were many things that I had never thought of. (I knew about M&A, but other than that, I learned it this time.) 

(Discussion)

It is said that the development methods and forms of the TNC were relatively stereotyped in the early stages. It is common practice to go abroad after a certain amount of growth, mainly at home, and as more and more diverse attempts are made, companies that often deviate from this form are said to be frequent. They say they rely more on TNC network channels than on other companies to start their businesses overseas from scratch. Is there a case like this in Korea?