Reading 4: Economic globalization

 Summary

This article explains how TNC’s are influencing and involved in economic globalization.

The scale and geographical distribution of TNCs

In the first part of the article, Dicken talks about the growth of TNC’s, what is considered a TNC and where they are mostly located. TNCs can be very diverse. They can be big global companies, but also smaller companies that operate only in a few different countries. TNCs are mostly located in developed countiers, but the number of TNCs from developing countries is growing.

Why and how corporations engage in transnational activities

The second part explains the two reasons for companies to expand outside their own borders.  The first reason is market-oriented investments and the second one asset-oriented investments. Market-oriented refers to the expantion outside of their home market, becaue of a low demand. Asset-oriented refers to the origin of the company’s natural resources and labour.

The development of transnational activities comes in two ways: greenfield investment and engagement with other firms. Since greenfield investment (= establishing completely new facilities) can be a big risk, most companies go for mergers and acquisitions or strategic alliances.

The geographical embeddedness of transnational corporations

The place where a TNC is located and where they are active, influences their way of operating. Even in a globalized world, TNCs will still be influenced by the society they are in. 

The ‘webs of enterprise’ manifested in transnational production networks

The last part talks about how TNCs are complex networks and because this network is spread out over multiple countries, they require a different type of organization. They often will spread out the different functions of the company to locations that are best suitable. For example, headquarters are often located in the company’s home country, sales and marketing is moved to locations with key markets, etc. TNCs are constantly changing.

The power relationships between TNCs and other actors in the global economy

TNCs can use their multiple locations as a way to get past regulations or laws. Regulatory systems and international institutions can take that power away from them by setting up international standards. Some people believe TNCs have more power over States, but ths is not true.

Interesting point

I found it interesting to read about how the home country still influences the company (through culture, politics, etc. ) even though the company has already spread out to multiple countries and has been internationally active for a while.

Discussion point

Why is it that some people believe TNCs have so much power, they even stand above the law?

Comments

Post a Comment

Popular posts from this blog

Introduction to our blog

 This blog is a digital forum where students from Fall 2022 class in Media Trends and Globalization at the Hanyang University in Korea will discuss their weekly readings and activities. For each section of the course, you are expected to post a blog post on relevant readings on our blog here and make a comment on another student's post. An ideal commentary should be about 800 words, divided into three clearly labeled sections in which you: 1) summarize in your own words of materials you read; 2) mention of any new, interesting, or unusual items learned; 3) identify at least one question, concern, or discussion angle that is either problematic in some respect or could have been elaborated more. This question is likely to be incorporated into our class discussions. You are allowed to quote an interesting passage from the text(s) you've read, but the quotes will not count toward any length requirements. Blog’s deadline is always: Sunday, midnight, of the week the question is poste
Read more

Reading Assignment 2: “What is the relation between culture and globalization?” LUAN QIANYUE

Cultural Globalization - Tomlinson   (1) Summary Globalization is not just a matter of politics, economic movements or the rise of trans-regional and large regions. Tomlinson believes that there is a multidimensional "globalization" in which the cultural dimension is an important area that needs to be studied separately. Tomlinson explains the importance of time and space issues, cultural imperialism, "deterritorialization," the impact of media and communication technologies, and the possible development of more international cultures by examining the relationship between globalization and contemporary culture . John Tomlinson introduced the dimension of culture in the research of globalization theory, trying to construct the global cultural picture. He analyzed the relationship between globalization and culture, put forward the proposition of global culture, and defined the concept of global culture. Emphasizes the necessity of studying global culture. In his view,
Read more

Reading Assignment 4: Economic Globalization--- LUANQIANYUE

What is the relation between economy and globalization? Reading Assignment 4: Economic Globalization (1)Summary Economic globalization is a result of the development of the world economy, which accelerates economic development, expands market horizons, and increases productivity. Economic globalization improves the efficiency of enterprises and plays an important role in the expansion of national economies. The authors believe that multinational corporations are the central players in economic globalization and the main shapers of the global economy. -TNC and its activities are undoubtedly one of the keys to understanding urban and regional development in today's globalized world economy. The internationalization of economic activity and its main instrument, the multinational corporation, can simply be seen as part of the normal expansion process of capitalist development. In the context of economic globalization, the rising power and status of transnational corporations an
Read more