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Chapter 5

"Global Shift" ch5 Summary

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Department
Social Science
Course
SOSC 1340
Professor
Kean Birch
Semester
Fall

Description
November 21, 2013 READING SUMMARY Name: Baraq Reading(sChapter 5, Peter Dicken (2011) Global ShthEdition), Guildford Press. OUTLINE OF THE READING(S) Economies vary from country to country but the national global economy will always be controlled by transnational corporations (TNC's). TNC's are large firms that operate in more than one country. These kind of corporations are global hence why they have such a big influence on the national economy. These corporations are capitalist enterprises so they must behave according to the basic rules of capitalism. Although such corporations strive to increase their profit, their main goal is to increase their share of a market and to become the leader of a specific type of industry. All corporations begin as domestic firms. The transnationalize process of a firm usually begins through the usage of overseas sales agent to export their goods. A sales outlet is then established overseas to distribute the exported goods. When the market for such goods becomes stable, a production facility is built. These are the major steps that transnationalize a domestic corporation. Although all TNC's seem the same, they are still widely influenced by their originating geographical location which is why major executives are brought in from the originating country. TNC's must form intra-firm and and inter-firm business relationships to survive. They must also have a strong relationship between their business and the state. Although TNC's retain distinctive characteristics from their country of origin, November 21, 2013 they also operate in a diversity of economic, social, cultural and political environments, which means that they will inevitably take on some of the characteristics of their host environments. Non-local firms have to adapt some of their domestic practices to local conditions. TNC's are usually made up of a main headquarters, a su
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