Rate this paper
  • Currently rating
  • 1
  • 2
  • 3
  • 4
  • 5
4.33 / 6
Paper Topic:

Multinational firms play an important role in economic globalisation. Identify

MULTINATIONAL COMPANIES AND THE CHALLENGE OF GLOBALIZATION TABLE OF CONTENTS

INTRODUCTION

MNC AND ECONOMIC GLOBALIZATION

GLOBALIZATION AND EMERGING PROBLEMS

THE CHALLENGE ARISING FROM THE DIFFERENT ORIENTATIONS TO WORK

CONCLUSION

REFERENCE INTRODUCTION

A multinational company (MNC ) is defined as company that owns or controls its productions or service facilities in more than one country In plain words , a multinational company not only owns (partly or jointly ) a branch or productive facilities outside its country . A few examples of such companies can be Ford , BMW , and Coca-Cola etc

According to an estimate 200 MNC control about one third of global production and half of the world economic units are multinational companies . There are only 14 countries whose GDP exceeds to the turnover of Exxon . The world top 100 MNCs own about US 2 trillion assets outside their home countries , which form about a quarter of world stock in foreign direct investment (FDI . The recent wave of mega-mergers has made many MNCs much larger and powerful than ever increasing their power many fold

The MNCs have played an important role in creating globolisation . Given their international reach and mobility , prospective countries and regions often have to compete with each other to have MNCs locate their facilities as they contribute in tax , revenue , employment and economic activities to host countries (Stopford , 1998

Such development has led to globalization that refers to the worldwide economical , political and technological exchange of ideas among the states in the modern world . It is used to describe , how world is becoming economically and politically unified . The economic aspects of globalization include trade , investment and migration across the countries . Globalization believes that human being should have greater access to vast number of goods ranging from cheap labour in third world countries to bigger overseas

investments . Multinational companies invest directly in different kind of assets in foreign countries , where free migration allows individuals to find employment in areas , where there is labour shortage (Soysa 2003

Globalization and internationalization increase opportunities for cross-cultural contact

Despite all the benefits MNCs are foreign companies setup in a foreign cultural environments that also give rise to different set of problems and misunderstanding

The problem arises due to differences in language , values and behavioural norms , which some times leads to failed negotiation and failed investment plan . This report will initially discuss the role of MNC in economic development and then look up at problems in terms of socialization in the wake of globloization

MNCs AND ECONOMIC GLOBALIZATION

The history of MNCs coincides with the rise of globolisation , which is a non-linear process . It was the eve of Word War I , which spurred the entrepreneurs and firms to drive the manufacturing and production at global scale . However , the true global economy started to take place between 1950s and 1970 , which was initially resisted by the Communist bloc , but the Japan economic miracle made it possible to drive the global integration of capital and commodity throughout the world (Geoffrey , 2005

MNCs are the most powerful institutes in the...

Not the Essay You're looking for? Get a custom essay (only for $12.99)