Global Corporations

GLOBAL CORPORATIONS
Prepared by
Aprielyn Dicen
BSIT-2B
The increase in international trade
has both created and been supported by
international regulatory groups,like
WTO,and transnational trade
agreements,like NAFTA.There is not a
single country that is completely
independent.
All are dependent to some degree on
international trade for their own
prosperity.Without international trade ,there
would be no need for international
regulatory groups.Without the international
regulatory groups,international trade at the
massive scale would be impractical.
International Trade International Regulatory
Groups
The trade regulatory groups and
agreements regulates the flow of goods
and services between countries.They
reduce tariffs, which are taxes on
imports,and make customs procedures
easier.This makes trading across the
national borders much more feasible.
This traditional trade agreements often
benefit private industries the most.Companies
can produce their goods and services across
many different countries.
For instance,you can have a backpack that was
designed in the united states but the materials
came from china and it was put together in
Mexico before it was shipped back to the US to
be sold.
Multinational or Transnational Corporations
(MNCs or TNCs)
• Also reffered to as global corporations.
• These companies that extend beyond the borders of their
country .
• They intentionally surpassed borders and take advantage
of oppurtunities in different countries to
manufacture,distribute,market and sell their
products.Some global corporations are ubiquitous like
mcdonald’s or coca-cola and yet,they market themselves
as American companies.
Others can be surprising like General Electric
which is based United States but has more than
half of it’s business and employees working in
other countries.Another Example is Ford Motor
Company,the classic American Company
,headquartered in Michigan that manufactures
cars worldwide.
Transnational corporations has a significant role in
the global economy.Some have greater production
advantages than entire nation.They influence the
economy and politics by donating money to specific
political campaigns or lobbyists.They can influence the
global trade laws of the international regulatory groups.
NOTE:
(lobbyist:Someone who is employed to persuade
legislators to vote for legislation that favors the lobbyists
employer.)
Global corporations often locate
their companies in countries which can
provide the cheapest labor in order to
save up for the expenses in the making
of a product.As a result,developing
nations will provide incentives,like tax-
free trade zones or cheap labor.
The companies will set up shop in their
country in hopes of bringing jobs and industry to
beleguered agricultural areas.
This promotes rapid advances in the
developing nations because of the ideas and
innovations brought over from the industrialized
nations.It also makes the nations around the
world more interdependent,which minimizes the
potential for conflict.
In the end ,however,these incentives often hurt the
working population of the developing nation.The
upper classes may benefit from the business of
these corporations but the people working in the
factorie are exploited as their wages are cut.In
addition,they are often prohibited from the unionizing.
It can even result in sweatshop conditons with
long working hours,substandard wages ,and poor
working conditions.
If the labor laws in the country become too
restricitve to the TNCs,they can just move their
factory to a new country,leaving widespread
unemployment in their wake.Setting up factories in
these developing nations may also hurt the country
which the TNC is based because many potential
jobs are being sent abroad.The same thing
happens when companies outsource their labor to
other countries.
Outsourcing has been enabled by technological
advances,allowing immediate communication across
the world to ease the transporting people,goods ,and
information.When companies find people in other
countries willing to work for a lower wage,they will
often employ them,which is good for the company
because they save money,and it is good for the people
in other countries because they now have a job.But it
also means that the people in the core country are
losing jobs and having difficulty finding new ones.
There seems to have negative effects of globalization
from transnational corporations.Trade does promote the
self-interested agendas of corporations and give them
autonomy.The global corporations also influence the politics
and allow works to be exploited.There are,however ,positive
effects.
Better allocation of resources

Lower prices for products
More employment worldwide
Higher product output
The changes a country experiences from international trade
are not only economic.Many of the cultural changes are as
important and sometimes,even more obvious than the
economic changes the nation can experience.As
international trade becomes easier and more
widespread ,more than just goods and services are
exchanged.Culture practices and expressions are also
passed between nations,spreading from group to
group.This is called Diffusion.Ideas and practices spread
from where they are well known and frequently apparent to
places where they are new and not often observed
In the past,exploration,military
conquests,missionary work,and tourism
provided the means for trading of ideas.But
technology has exponentially increased the
speed of diffusion.Nowadays,mass medias and
the Internet allow the transfer of ideas almost
instantaneoulsy.This is the most commonly
seen in the transmission of scientific knowledge
and the spreading of the north American
culture,which dominates the Internet.
SUMMARY:
International trade and global corporations ,along
with the internet and more global processes,contribute
to globalization because people and corporations bring
their own beliefs ,their traditions,and their money with
them when they interact with other countries.These
ideas and capital can then be incorporated in other
countries,and thus,change the cultures and economies
of these foreign nations.
THE END

Global Corporations

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GLOBAL CORPORATIONS

Better allocation of resources

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