SOCIOL 2 Lecture Notes - Lecture 21: Mergers And Acquisitions
Document Summary
Growth in numbers: from around 35,000 in 1990 to around 65,000 in 2000. Especially high growth of mncs headquartered in emerging economies. But, majority of mncs are headquartered in developed economies. Mncs have grown in size through mergers and acquisitions, and diversification. Mergers & acquisitions = companies combining with or buying each other. Diversification = companies branching out into different areas of activity. Mncs are integral in many global supply chains. Sometimes mncs buy and operate factories abroad. But often mncs simply outsource production to sub-contracting firms in foreign countries. Most of nike"s shoes, clothing, and other gear are manufactured by foreign firms (and their employees) subcontracted by nike. Mncs can move their operations to wherever there are: If mncs don"t actually have to buy and run factories abroad, they can easily shift operations to other countries if they find them to be cheaper. Also - sub-contracting helps diffuse responsibility for fair labor practices and meeting environmental standards.
