Task: Read and summarize Chapter 5 of Global Shift (2011, 6 edition) by Peter Dicken.
Transnational corporations (TNCs) are ones which control operations in more than one country.
Firms choose to transnationalize for two reasons: market orientation (to gain a competitive edge in
serving a particular market, with products and/or services suited to that particular market and its
demand) and asset orientation (to make the most effective and efficient use of material through their
stages of production, including concepts such as availability knowledge and skill base, productivity in
labour and wage costs). The traditional belief is that TNCs first must have high standing (in the way of
market share, brand recognition, profits, etc.) in the home country, and can then transfer these
operations to a foreign country; there are many ways to diverge from this traditional path of
transnationalizing, such as licencing, outsourcing, franchising, strategic alliances and more.
TNCs are said to be networks within networks, being complex in their relations and more
difficult to manage than merely a national organization. Due to the number and degree of external
forces that may be involved in a TNCs’ operations abroad, relationships need to be maintained with a
high degree of care. TNCs are subject to certain benefi