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Junaid Alam
Globalization
Meaning:
Direct investment -
High
Direct investments
Foreign investments
Performance of service
Use of assets
low
High
Multinational Corporations
Definition:
Exxon Mobil Walmart stores Royal Dutch shell BP General motors Chevron Diamler Chrysler Toyota motor Ford motor Conoco Phillips
U.S U.S Netherlands Britain U.S U.S Germany Japan U.S U.S
Goals of MNCs
Manufacture in those countries where it gets max. competitive
advantage. Buy and sell anywhere in the world to take advantage of the favorable price. Take advantage ,throughout the world ,of changes in labor cost ,productivity, trade agreement and currency fluctuations. Expand or contract based on worldwide competitive advantage Obtain a high and rising return on capital Achieve greater sales Hold risks within reasonable limits in relation to profits. Maintain and improve technology Maintain control of important decisions Encounter fewer barriers in host countries.
Achieve economic growth. Achieve full employment of people and resources. Improve managerial and works skills. Maintain price stability. Develop a favorable balance of trade. Improve technological development. Improve worker productivity. Protect the nations physical environment. Advance the quality of life of its people. Control national security decisions. Develop and maintain social and political stability .
Criticisms of MNCs
Costly damages inflicted with impunity
- e.g. Union carbide , Bhopal Gas tragedy were let off with a paltry fine of $500 per person Self interests are primary Bribes adds to the bottom-line . Small firms are the worst hit. Interference with economic objectives. Social disruptions Environmental degradation Imperialism
In Defense of MNCs
Provide employment.
Train managers. Provide products and service.
The End