The Rise Of The Multinational Enterprise | California State University, Northridge

University:
California State University, Northridge
Course:
BUS 104 | Introduction to Business
Academic year:

2023
Views:

482

Pages:

1
Author:

JJIssac

THE RISE OF THE MULTINATIONAL ENTERPRISE dispersed units. Intra-firm trade exceeds national exports. Economic distance shrinks for some. Governance Challenges While the first true multinationals emerged in the late 1800s, their explosive growth really took off after World War 2. Liberalization worldwide and falling trade barriers supercharged the trend. By the 2010s, over 100,000 MNCs operated hundreds of thousands of affiliates globally. They dominated markets in many industries and regions. Revenue at the largest topped trillions. Defining Multinational Corporations Exactly defining MNCs involves nuances given differing contexts. But the core is controlling operations across national borders, usually through foreign direct investment and equity stakes in overseas units. Outputs, employment and assets controlled internationally signify true multinationality beyond just exporting. Complex coordination and worldwide learning become key to success. Dominant Industry Impacts MNCs increasingly concentrate whole sectors as megamergers shrink competitor pools. Pharma, autos, telecom and finance have witnessed this intensely. Regional corporate behemoths also emerging from Asia further concentration. Global Production Systems Many MNC activities spill borders as components, products, capital and talent shuttle between integrated yet MNC economic might relative to many nations raises sovereignty concerns. Transfer pricing, tax avoidance, lobbying and operating practices pose governance issues. Calls grew for voluntary codes then binding regulation and cooperation. Clearly, MNCs have revolutionized business internationally in scale and scope of operations. Evolving models will shape worldwide commerce patterns far into the future. Prudent rules seek mutual benefit balance.