Multinational
Corporations
Andrew Hamiel
Definition
Business Dictionary defines a multinational
corporation as, “An enterprise operating in
several countries but managed from one
(home) country. Generally, any company or
group that derives a quarter of its revenue from
operations outside of its home country is
considered a multinational corporation.”
Types
Four major categories of MNC’s:
1. Decentralized with strong home presence
2. Transnational Corporations, utilize centralized
production wherever cheap goods are available
3. An international company that builds on the parent
corporation’s product
4. A corporation that combines these three techniques
MNC with strong home country
presence
Chrysler: 19/26 factories located in U.S.
Globalized MNC’s
● Business is usually strongly based in the corporation’s home country, but
production is often outsourced to other nations
● Apple
International Company that builds off of parent
company’s product
McDonald’s-Menu changes in different parts of world
History
Earliest transnational corporation: British East
India Trading Company
History- before WWII
● Industrial Capitalism brought about the orgins of multinational corporations,
and the basis of multinationals came from the birth of industrial capitalism
and the consequential search for resources abroad. This expanded trade
greatly between nations.
● Resulted in monopolization of goods- example: United Fruit Company
History-after WWII
● Multinational Corporations boomed after WWII and westerngovernments
began to invest in industrial stock, encouraging corporate mergers.
Improvements in transportation made the expansion of companies more
convenient and profitable.
● With nations investing in industry, monopolies began to dissipate. In 1906
there were 3 leading firms with assets of US $500 million or more, but in
1971 this number grew to 333 corporations(⅓ of which had assets of US
$1 billion or more)
MNC’s today
● Vast power: of the top 100 economies in the world, 51
are corporations and 49 are countries
Example-Walmart
● World’s largest corporation by revenue-fortune 500
● 2.2 million employees(More than 101 of 243
independent states)
● 11,000 stores in 27 countries, 10 countries with ecommerce websites
● 250 million customers/week
Walmart
Political power
● Large economic power converges into
political power as well
Lobbyists
● 12,281 current registered lobbyists
● Immense money spent on lobbying: Hedge
fund-1 million in one quarter over an online
financial regulations
● Amazon-$450,000 in one quarter over a
possible online sales tax as well as data
protection and privacy
Threat of Multinats
● If Walmart wanted to, it could instantly fire
1.3 million American workers
● Walmart also sells over 10% of American
products
● This gives Walmart power because of the
amount of American industry that they
control
Criticisms of Multinational
Corporations
● Economic power of MNC’s converge into political
power-corporate led lobbyist groups
● Human rights violations in nondeveloped countries
where manufacturing plants exist
● Use of child labor internationally
● Too powerful-economic power is greater than many
nations
● Cannot be controlled by a single government
● Potential for global monopolization
Sources
"What Is a Multinational Corporation (MNC)? Definition and Meaning." BusinessDictionary.com. N.p., n.d. Web. 30 Sept. 2014.
<http://www.businessdictionary.com/definition/multinational-corporation-MNC.html>.
"International Labour Organization." Multinational Corporations. N.p., n.d. Web. 01 Oct. 2014. <http://www.actrav.itcilo.org/actravenglish/telearn/global/ilo/multinat/multinat.htm>.
"Global Policy Forum." A Brief History of Transnational Corporations. N.p., n.d. Web. 01 Oct. 2014.
<https://www.globalpolicy.org/empire/47068-a-brief-history-of-transnational-corporations.html>.
"List of Chrysler Factories." Wikipedia. Wikimedia Foundation, 09 July 2014. Web. 01 Oct. 2014.
<http://en.wikipedia.org/wiki/List_of_Chrysler_factories>.
"CHART: Top ‘U.S.’ Corporations Outsourced More Than 2.4 Million American Jobs Over The Last Decade." ThinkProgress
CHART Top US Corporations Outsourced More Than 24 Million American Jobs Over The Last Decade Comments. N.p., n.d.
Web. 01 Oct. 2014. <http://thinkprogress.org/economy/2011/04/19/159555/us-corporations-outsourced-americans/>.
"Corporations." - Global Issues. N.p., n.d. Web. 01 Oct. 2014. <http://www.globalissues.org/issue/50/corporations>.