internationalisation and multinational corporations Flashcards
what are the three ways that tncs are now larger
assets and sales,
geographical coverage,
employment
how have tncs changed in terms of nationality
decline in us stranglehold
tncs are more integrated into the _______ ______
financial system
why would companies go global (3 reasons)
access to raw materials,
access to the market,
access to cheap labour
why have life cycles of products become shorter
intensified competition,
innovation leading to new products (iphone),
fashion,
rise in services (immediate)
how do tncs maximise their productivity of labour
exploiting skilled and unskilled workers (mainly female in export processing zones),
using international subcontractors,
use of home workers,
government incentives
what was happening for multinationals in latin america in terms of the oli paradigm 1960-1982
industries nationalised, local ownership encouraged, investment restricted, limits on profit remittance, (location advantages not present so firms did not invest)
what was happening for multinationals in latin america in terms of the oli paradigm 1982-1990
growing local markets for goods and services (location),
proprietary technology and marketing skills (ownership),
production of low-value goods and locally specific parts within latin america (internationalisation)
talk about the ‘global corporation’
very large organisations, fully developed internal market, control decentralised, based on global profit making strategies, aim for global market
what has the economist recently said about multinational companies
“multinational companies… financial performance has slipped so that they are no longer outstripping local firms”
in the past five years what has happened to multinational companies (global corporations)
profits down 25%,
returns on capital have slipped to their lowest in two decades,
40% of all multinationals make a return on equity of less than 10%
reasons for global corporations in decline
retreat of us corporations (ford gm),
competition (europe, asia, china),
production networks confined to regions (integrated production networks),
diversified markets (within and between world regions)
what does rde stand for
rapidly developing economies
what are the strategies for rapidly developing economies
rapidly growing domestic economies (markets),
low-cost resources (labour, energy),
key suppliers for ‘western’ MNCs
features of TNCs
control activity in more than one country,
take advantage of geographical differences between countries and regions,
have geographical flexibility
what does production chain include
all stages of the products or services life
what does each link of the production chain do
adds value
are links in the production chain internal or external to the firm
links may be all internal to the firm, or involve external links with independent firms (likely to be combinations of internal/external
incremental innovations d
small-scale, progressive modifications of existing products and processes, although individually small they accumulate over a long period of time to create highly significant changes
radical innovations d
discontinuous events that drastically change existing products or processes
changes of technology system d
extensive changes in technology that impact upon several existing parts of the economy, as well as creating entirely new sectors
changes in the techno-economic paradigm d
truly large-scale revolutionary changes embodied in new technology systems, these have such large effects on the economy as a whole that they change the style of production and management throughout the system
