Multinational corporations

Page history last edited by Brian D Butler 1 yr ago

 

Why do they exist?:

 

when economies of scale are needed, and there is an advantage to global distribution to achieve

 

What are the benefits to the host-country?

 

FDI is the main goal....becasue FDI is = transfer of wealth (sometimes), and transfer of technology / best practices (many times)...and the increased competition that forces local companies to get better (always).

 

Issues:

 

  1. exploitation (cheap labor)...from a  "structuralist "perspective
  2. environmental / workers rights
  3. transfer pricing (tax / duty evasion issues)

 

Who is the biggest?

 

  • depends on how you measure...
    • if its by # of employees...then its probably Wal-Mart (private sector employer ...not including staffing agencies)
    • if you rank by FDI assets overseas (as UNCTAD does)...then its probably a telecom firm
    • if you rank by total net worth (stock market cap), then its probably Microsoft, or some tech company
    • Note however, if you look at Microsoft, it doesnt even rank in the top by assets overseas, because it doesnt set up manufactuing overseas, but rather partnerships, R&D,etc
  • but, which way is right?  it depends on what message someone is trying to sell you...!
  • Benefits:
    • If your goal is to measure the transfer of Intellectual property, then maybe its best to look for actual FDI in country...because that shows longer term committment.
    • Where Wal-Mart might be the biggest employer (creating the most jobs is good, no?),...they might not be that highly attractive because the quality of jobs is seen as lower-level...

 

 

 

Incorporation

 

The legal concept of incorporation is recognized all over the world. In the United States, corporations are identified by the term "incorporated" added after the business name, such as "Texas Instruments, Incorporated", or by putting the word corporation in the name of the company, as in "Netscape Communications Corporation". In Germany, Austria and Switzerland the GmbH ("limited liability business association"), as well as the AG ("stock market traded business association") are the most common comparable concepts. In the United Kingdom the titles Ltd. (abbreviation for limited company) or plc (abbreviation for public limited company) are used for corporations. In France, Spain, Portugal, Poland, Romania and South America the title S.A. is used for corporations. Norway uses the title AS for stock corporations (Norwegian: Aksje Selskap), while Sweden uses the similar AB (Swedish: aktiebolag). Italy uses "Srl", or "Società a Responsabilità Limitata" (limited liability company) and "SpA" or "Società Per Azioni" (stock corporation). The Netherlands uses NV. Singapore uses Pte. Ltd., meaning "private limited" which is the equivalent of a U.S. incorporated entity.

 

**Further resources: mycorporation.com

 

 

TNC:  transnational corporations

 

while MNC was the terminology used previously...now its more common to refer to TNC's, or "trans" national , or "go beyond national markets"...corporations . 

 

 

See also:

 

 

 

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