Globalization and multinational firms

Leo Sun The following is a classic story, often used by socialists to highlight the "evils of a capitalist society" - the small town grocer gets mercilessly taken out by the new Wal-Mart in town. Being a large national company, Wal-Mart has the sprawling global resources and is willing to sacrifice margins to take out local competitors. In the end, customer loyalty means nothing and the grocer goes bankrupt, decades of hard work decimated overnight.

Globalization and multinational firms

Three Factors of Globalization: It is worthwhile, therefore, to look into the subject. I will attempt to do so in terms of three factors: The first subject of the three that I wish to consider is the role Globalization and multinational firms the multinational corporations MNCs.

They are both a cause and a result of the globalization process. One can view the seventeenth-century Dutch and English India companies as a preview of what was to come.

In fact, defining the MNC as a company with headquarters in one country and major investments in one or more other countries might just allow the India companies to fit in. Unilever is closer to being a true predecessor. John Stopford offers a succinct explanation of the reasons why: Their growth takes the shape of a J curve.

Some of them are enormously wealthy. Exxon Mobile is at the top, its worth greater than the GDP of the lowest 70 or so countries out of about One sign of the information revolution is that the next wealthiest is Apple, and climbing fast. In fact, by FebruaryApple was number one.

In addition to economic power including lobbying in its own countryExxon Mobile, as an example, exercises extraordinary political influence, especially in the Middle East. How great the influence is, is unknown, but it is probably as great or greater than the ability of the U.

Congress in setting policy. Diplomatic history usually shortchanges this topic. With sites in 53 countries, and exercising influence in all of them, funding anti-environmental groups, and paying scientists for research claiming that there is no need to be concerned about global warming; Exxon Mobile plays an outsize role in international affairs with little accountability shareholders are pushed aside.

It clearly is not only wealthier than 70 or so nation-states, but also more powerful. Moreover, it stands outside the United Nations and its efforts to bring justice and peace to the increasingly globalized world.

I suspect that there is a department in the oil company devoted to foreign affairs.

Globalization and multinational firms

If not, or in addition, resort may be had to advisory organizations such as Kissinger Associates. In any case, one can be sure that Exxon Mobile plays a strong role in shaping foreign policy as well as pursuing ever-more petroleum resources.

Exxon Mobile is a striking example of the political power exercised by the MNCs, even over big and powerful countries. They put crucial amounts of money into political campaigns and lobbying. John Boehner, head of the Republicans in the House of Representatives, is currently their most prominent shill man in the U.

Still, we must not lose sight of the economic power of the MNCs while looking at their political might.

Impact of Globalization on Small Businesses -

Their impact on employment in the U. A decision to outsource manufacturing is immediately reflected in unemployment figures. This is not altogether bad in a light broader than the purely nationalistic one.

We must remember that, say, in the U. This was followed by many other industries. In outsourcing to other countries elsewhere, the MNCs are not doing anything new.

Only now, it is fostering globalization. The next major factor in globalization that I want to consider is that of the non-governmental organizations NGOs.Multinational corporations see both benefits and downsides of globalization.

On the positive side are an increased access to markets, more labor options, partnership opportunities and possibly lower taxes.

Globalization and multinational firms

A disadvantage is that coordination can be harder with different languages and cultural norms. Globalization and Multinational Corporations “Bargains Old and New: Multinational Corpo rations in Global.

Governance,” Business and “Technology Transfer by Multinational Firms: The. Chapter 2: Globalization And The Multinational Firm. Benefits of Globalization. Globalization of Financial markets. MNCs and International economic Competition.

I will attempt to do so in terms of three factors: multinational corporations, non-governmental organizations, and global consciousness.

The first subject of the three that I wish to consider is the role of the multinational corporations (MNCs). Globalization & Multinational Firms - Chapter Summary. When organizations make the decision to go global, there are many steps to complete in order to .

Effect Of Globalization On Multinational Corporations Economics Essay. Print Reference this. Success in this new global market requires the ability to accommodate the different needs of diverse consumer groups.

Companies can achieve this through product and process innovations and maximise profits. Entrepreneurship is also increasingly.

What Is Globalization? | Globalization