Question

What is the latest trend of the development of multinational cooperations? (at least 1500 words, charts and data are required, and case study is preferred).

Answer 1

there are most of the latest trend in multinational comapnies. There has recently been a change in attitudes towards multinationals. They are not subject to serious criticism as they have been in the past. Even the Communist countries have developed some kind of favorable attitude towards them.

there are five recent trends that point to the changes:

1. change in bargaining power

There is some evidence that it has become the policy of multinational companies to shift from equity capital ownership and managerial control of overseas facilities to technology, management and marketing sales as a means of earning returns on corporate assets, at least in those countries that have policies against inflows of packaged technology.

2. Involvement with a larger number of international companies:

Not only do host countries deal with a wider range of foreign companies, comparing them and weighing them against each other, but large MNCs are being replaced by smaller and more flexible firms.

3. Competition between the MNCs:

Many more nations are now competing with US multinationals to set up foreign business. Japanese and European firms are prominent among the new MNCs.

4. Establishing MNCs by developing countries:

In addition to the companies of the Organization of Petroleum Exporting Countries (OPEC) and companies established in tax haven countries, Argentina, Brazil, Colombia, Hong Kong , India, Korea, Paris, Philippines, Singapore and Taiwan are the leading countries in which MNCs are established.

5. Lastly, several multinationals from developed countries have adapted to the needs of developing countries.

It has been fairly self-evident in recent decades that multinationals have come from rich nations. It was assumed that competitors from developing countries would not be able to catch up. The challenges were too daunting.That was it then. Emerging economies' corporate powerhouses are increasingly having an impact on the global economy, demonstrating that liberalization, particularly in the context of the World Trade Organization ( WTO), has made a difference. Clever market leaders in Asia, Latin America and Africa are ready to exploit opportunities and know how to do that. There are various types of emerging-market multinationals. While not driven by their governments, emerging-market multinationals profit from state support in a variety of ways. The older ones grew large in the period when developed countries ' governments secured their economies from foreign competition, when many businesses became lazy and stopped innovating. But those who strived for excellence were still able to grow rapidly when liberalization began.

It is no coincidence that most emerging-market multinationals are based in relatively large markets. Thriving at home is a prerequisite for success abroad. Regional trade organizations can improve matters for small-economy enterprises if governments act prudently. Other forms of State aid are also relevant, such as cheap credit granted by public-sector banks or the provision of appropriate public infrastructure. If state universities educate students on the right subjects, a corporation will find competent staff. State departments can provide useful information and advice, and ambassadors to foreign countries can speak for private-sector companies. All in all, emerging markets support private-sector corporations doing business abroad in the same way as established economic powers do. Some people point out that corporate newcomers from foreign countries must benefit from corruption and a loose interpretation of the law. The truth is, while shady deals may sometimes help, a company needs to get a lot of things right to succeed in global competition. Oh, and well-established multinational giants sometimes cheat, like Volkswagen's recent case and numerous proved banking scandals.

The emergence of emerging-market multinationals is significant even though they are similar to their long-established competitors. Big corporations set standards, have an impact on national policy-making and contribute to the shaping of globalization. It now looks as if emerging markets are heading towards a recession. Crisis is supposed to prove painful, but it will not block the rise of some big corporations. They are forces to be reckoned with in the long term.

Multinational Corporations and the Changing Global Environment

FDI is a mechanism used by MNCs to establish and maintain operations in host countries where they invest and operate. FDI and MNCs are central to the economic relationship between the United States and Japan. For example, 'both U.S. subsidiaries in Japan and Japanese subsidiaries in the United States are now recording international revenues that greatly surpass the total amount of bilateral trade shipped between these two economies. MNCs also have a significant role to play in the development of technology and in the larger domestic economies of both countries. The future roles and functions of MNCs in world economic development, including their rights vis-à - vis national governments and their responsibilities towards home and host countries, are therefore important issues for policy makers and private sector leaders in both Japan and the United States.

Even before communism collapsed in Eastern and Central Europe, nations around the world were moving towards market-oriented economic policies. Market-oriented East Asian economies have set pace over the last few decades and, given current difficulties, economic growth in the Asia-Pacific region is likely to continue. China's economic growth has been evident recently, but reforms have also been implemented in India and a number of Latin American nations. As demonstrated by the economic upheavals in Mexico in 1994 and 1995, the transition to more open market systems continues to raise its own challenges for individual countries and international institutions. Progress, as described in Mo, is likely to be uneven. Till the overall trend remains strong: emerging market economies in Europe, Asia , Latin America and Africa have strong incentives for greater integration into the global economy.

the advantages of multinational corporations

Multinational corporations are businesses that transfer capital, products , services, and expertise across national borders irrespective of the country where their headquarters is located. Many are so wealthy and have so many that they seem like small nations. For example, both Exxon and Walmart profits are greater than the world's GDP of all but a couple of nations. Many global brands sell far more outside of the US than they do at home. Examples of this are Coca-Cola, Marlboro brand of Philip Morris, Pepsi, Kellogg, Pampers, Nescafe and Gillette. A weaker dollar helps in slow-growing, developed economies such as Europe and Japan, because it means cheaper products to sell to those markets, and the profits earned on those markets translate into more dollars back home. Meanwhile emerging markets are steadily growing in Asia , Latin America and Eastern Europe. General Electric expects emerging markets to produce 60 per cent of its sales growth in the next decade. For Brown-Forman, the liquor business is coming from emerging markets like Mexico and Poland, a fifth of its revenue development of Jack Daniels, the Tennessee whiskey. IBM was witnessing fast growth in emerging brazil, russia.

Big multinationals have a range of advantages over other firms. Multinational firms , for example, are also able to solve trade issues. For political reasons, Taiwan and South Korea have long had an embargo on Japanese cars and have been helping domestic automakers. But Honda USA, a US-based Japanese-owned corporation, is sending Taiwan and Korea Accords. In another example, BASF moved its cancer and immune-system work to Cambridge , Massachusetts, when the environmentally conscious Green movement opposed biotechnology research undertaken by BASF, a large German chemical and drug manufacturer. Another advantage to multinationals is their willingness to sidestep regulatory concerns. U.S. drugmaker SmithKline and UK's Beecham agreed to combine in part to escape marketing and regulatory problems in their main markets. The combined business will argue that it is an insider, both in Europe and in the USA. South Korea's Samsung is a leading producer of giant, high-definition televisions. Samsung produces the largest curved ultra-high-definition screens for the home-theater market around the world. Unfortunately, the giant Samsung TVs can be too expensive for most of the world 's customers, but the 88-inch version can be purchased for under $20,000.

Xerox has launched some 80 different office copiers in the United States which were designed and manufactured by Fuji Xerox, its joint venture with a Japanese corporation. Versions of the super-concentrated detergent that Procter & Gamble first invented in Japan in response to a competing product are now being marketed in Europe under the brand name Ariel and in the United States under the labels Cheer and Tide.

Consider also the Elevonic 411, an elevator developed by Otis Elevator, which is programmed to send more cars to floors where demand is high. It has been developed in five countries through six research centres. The system installation was done by Otis' group in Farmington, Connecticut, a Japanese group designed the special motor drives that made the elevators run smoothly, a French group mastered the door systems, a German group managed the circuitry and a Spanish group took care of the small gear components. Multinationals, particularly in heavily unionized nations, can also save a great deal in labor costs. For example, when Xerox started shifting copier-rebuilding work to Mexico to take advantage of the lower salaries, her union in Rochester, New York, protested because it saw members' employment being at risk. The union eventually agreed to change the styles of work and improve the productivity to keep the jobs at home.