Transnational corporation

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A transnational corporation is an enterprise that is involved with the international production of goods or services, foreign investments, or income and asset management in more than one country.

Contents

Characteristics

The United East India Company (VOC) was a pioneering early model of the multinational/transnational corporation at the dawn of modern capitalism.
Gravure van het Oost Indisch Huis (17e eeuw).jpg
17th-century etching of the Oost-Indisch Huis (Dutch for "East India House"), the global headquarters of the United East India Company (VOC) in Amsterdam.
Andries Beeckman - The Castle of Batavia.jpg
The Fort Batavia, seen from West Kali Besar (Andries Beeckman, c. 1656). In Batavia in 1610 the VOC established its overseas administrative centre, as the second headquarters, with a Governor-General in charge, as the Company's de facto chief executive. The Company also had important operations elsewhere.

Transnational corporations share many qualities with multinational corporations, with the subtle difference being that multinational corporations consist of a centralized management structure, whereas transnational corporations generally are decentralized, with many bases in various countries where the corporation operates. [1] While traditional multinational corporations are national companies with foreign subsidiaries, [2] transnational corporations spread out their operations in many countries to sustain high levels of local responsiveness. [3]

Multinational corporation large corporation doing business in many countries

A multinational corporation (MNC) or worldwide enterprise is a corporate organization that owns or controls production of goods or services in at least one country other than its home country. Black's Law Dictionary suggests that a company or group should be considered a multinational corporation if it derives 25% or more of its revenue from out-of-home-country operations. A multinational corporation can also be referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation, or a stateless corporation. There are subtle but real differences between these three labels, as well as multinational corporation and worldwide enterprise.

A transnational corporation operates substantial facilities, does business in more than one country, and does not consider any particular country its corporate home. One of the significant advantages of a transnational company is that they are able to maintain a greater degree of responsiveness to the local markets where they maintain facilities.[ citation needed ]

Transnationality also refers to the extent to which a firm engages in value-creating activities across national borders. Faced with accelerated globalization, managers often make decisions to expand a firm’s transnationality in order to enable the firm to effectively compete with rivals on a global scale (e.g. Nestlé, Deutsche Post, Toyota, etc.), who employ senior executives from many countries and tries to make decisions from a global perspective rather than from one centralized headquarters. [4] [5] Actions taken with transnational cooperation can help create better relationships between nations. Resources that are found in nations often need to be spread out throughout the world and thus transnationality helps this process. The history of the TNC dates back to Western Europe in the 16th century. During this time firms like the British East India Trading Company were founded, helping to develop transnationality to what is seen today.[ citation needed ]

Nestlé Swiss food company

Nestlé S.A. is a Swiss multinational food and drink processing conglomerate corporation headquartered in Vevey, Vaud, Switzerland. It is the largest food company in the world, measured by revenues and other metrics, since 2014. It ranked No. 64 on the Fortune Global 500 in 2017 and No. 33 on the 2016 edition of the Forbes Global 2000 list of largest public companies.

Deutsche Post German logistics company

The Deutsche Post AG, operating under the trade name Deutsche Post DHL Group, is a German multinational package delivery and supply chain management company headquarter in Bonn, Germany. It is the world's largest courier company. The postal division delivers 61 million letters each day in Germany, making it Europe's largest such company. The Express division (DHL) claims to be present in over 220 countries and territories.

Toyota Japanese multinational automotive manufacturer

Toyota Motor Corporation is a Japanese multinational automotive manufacturer headquartered in Toyota, Aichi, Japan. In 2017, Toyota's corporate structure consisted of 364,445 employees worldwide and, as of September 2018, was the sixth-largest company in the world by revenue. As of 2017, Toyota is the largest automotive manufacturer. Toyota was the world's first automobile manufacturer to produce more than 10 million vehicles per year which it has done since 2012, when it also reported the production of its 200-millionth vehicle. As of July 2014, Toyota was the largest listed company in Japan by market capitalization and by revenue.

See also

Related Research Articles

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References

  1. Biersteker, Thomas (1978). "Distortion of Development? Contending Perspectives on the Multinational Corporation".
  2. Drucker, Peter F. (1997). "The Global Economy and the Nation-State". Foreign Affairs. 76 (5): 159–171. doi:10.2307/20048206. JSTOR   20048206.
  3. Case study: The Relationship between the Structure/Strategy of Multinational Corporations and Patterns of Knowledge Sharing within them (PDF). Oxford University Press. 2009.
  4. Schermerhorn, John R. (2009). Exploring Management. John Wiley and Sons. p. 387. ISBN   978-0-470-16964-3.
  5. "Integrated international production". World Investment Report 1993. United Nations Conference on Trade and Development (UNCTAD) World Investment Report (WIR). 1993. doi:10.18356/e39588ec-en. ISBN   9789213626696. ISSN   2225-1677.