what transnational corporations (TNCs) operate in Canada? What
influence do those TNCs have on Canada's economy, society and politics? What
Canadian companies are transnational
-A TNC is a firm that has the power to coordinate and control operations in more than one country, even if
it does not own them
- most TNCs are capitalist enterprises.
-businesses should make certain profit over a period of time.
- firms always compete other firms across the world
-firm's motivation for engaging in transnational operations can classify them into
two broad categories:
1- market orientation, 2- asset orientation
- the market orientation are mostly foreign direct investment
- the largest markets are the usa and Western Europe
- the demand depends on the countries income, if a country has a high
income then the demand will be more than the country that has low
income
- countries with low income spend their money on basic stuff unlike
the countries with high income, they spend their money on goods and
services
-transportation was the most major barrier in the past for markets
-firms must locate their markets at the same place of supply
-natural-resource- oriented foreign investments have a very long
history and they have a high position in the global economy
-many now hold the view that at least at the global scale, the two most important
location specific factors are : 1-access to knowledge
2- access to labour
------- THER ARE FOUR IMPORTANT ATTRIBUTES OF LABOUR SHOW
LARGE GEOGRAPHICAL VARIATIONS: 1- knowledge and skills : depend on the conditions of the area's development
2- wage costs: it is diff from a country to another, Norway is the highest
hour compensation costs
3- Labour productivity : wage costs has an effect on labour productivity
, also the labour productivity depends on the skills that workers have, and the
machinery that the firms use
4- Labour controllability : they make new investments in places
where labour is regarded as being more malleable
- the global variations in production costs are
a highly significant element in the transnational investment location
decision
only firm that has reached a substantial size will have the resources
to begin to operate transnationally
The traditional view of a sequential development trajectory :
-Vernon assumed that firms are more likely to be aware of the
possibility of introducing new products in their home market than
producers located elsewhere.
- in the us high average income levels together with high labour
costs encouraged that development of new products that catered
to high income consumers and were labour saving
- all TNCs have grown, at least partially through acquisition
and merger
- the new species of TNC are different from traditional
multinationals in that they are created by internationally
experienced individuals and global in their outlook already
from inception. -New form of TNC: 1- first one is Proteome System Ltd (PSL)
it was established at the Macquarie University in Australia,
it expanded in the us by acquisition of the pieces left after
a biotech firm in Boston. In Japan it entered into a strategic
alliance with an established trading house. In Malaysia it entered
the market through the services of an agent.
2- the second one is Momenta Corporation of Mountain
View Colorado: it was a start up in the emerging pen-based computer market.
The founder were from Cuba, Iran, Tanzania and the Us.
The software design was conducted in the US, the
hardware design in Germany, manufacturing in the Pacific Rim,
and the funding was received from Taiwan, Singapore, Europe
and the Us
TNCs as networks within networks :
- TNCs have 2 basic characteristics : first one is that all TNCs
are networks within networks, structured through a myriad
of complex relationships, transactions, exchanges and interactions
within their own internal corporate network. Second fact that a TNCs networks
are spread across, and embedded within, different national
jurisdictions and contexts means that coordinating and
controlling its internal and external networked activities are
vastly more complex than is the case for a purely domestic
firm.
The geographical embeddedness of TNCs : home country influences
- There are some similarities between firms
from east Asia : formation of intra- and inter- firm business relationships, reliance on personal relationships, and strong relationships
between business and the state.
-inter firm relationships tend to be long term and stable
-firms from South Korea and Taiwan have strong and distinctive
relational structures.
-the horizontal Taiwanese networks consist of two main types: family enterprise
networks and satellite assembly networks
-the fact that TNCs are transnational that they operate in a diversity
of economic, social , cultural and political environments
--non local firms invariably have to adapt some of their domestic
practices to local conditions.
- the 2008 financial crisis has greatly reduced the attractiveness
of the US model
- the japanese firms have a very long history of adapting to
external influences by building structures and practices that remian
distinctively japanese.
- History and culture play a big role in shaping both the internal
structures of TNCs and the core strategies articulated through them
Configuring the TNCs internal networks: coping with complexisty: a diversity
of organizational architectures :
-the traditional approach to changing a TNCs organizational architecture
when firms transform their organizational structures from a functional form ( production,
marketing, finance, etc) into a divisional form ( usually product based)
- the main advantage of the divisional structure is its greater ability to cope with
product diversity.
-firgure 5.8 shows four commonly used structures and each one is adopted depends upon a number of 4 factors, those factors are: the age and experienced of the enterprise, the
nature of its operations and its degree of product and geographical diversity.
- some of the largest
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