International Companies

9 Key excerpts on "International Companies"

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  International Economics & Trade

  • (Author)
  • 2014(Publication Date)
  • Orange Apple

    (Publisher)

  ____________________ WORLD TECHNOLOGIES ____________________ Chapter- 4 International Business International business is a term used to collectively describe all commercial transactions (private and governmental, sales, investments, logistics,and transportation) that take place between two or more nations. Usually, private companies undertake such transactions for profit; governments undertake them for profit and for political reasons. It refers to all those business activities which involves cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc. A multinational enterprise (MNE) is a company that has a worldwide approach to markets and production or one with operations in more than a country. An MNE is often called multinational corporation (MNC) or transnational company (TNC). Well known MNCs include fast food companies such as McDonald's and Yum Brands, vehicle manufacturers such as General Motors, Ford Motor Company and Toyota, consumer electronics companies like Samsung, LG and Sony, and energy companies such as ExxonMobil, Shell and BP. Most of the largest corporations operate in multiple national markets. Areas of study within this topic include differences in legal systems, political systems, economic policy, language, accounting standards, labor standards, living standards, environmental standards, local culture, corporate culture, foreign exchange market, tariffs, import and export regulations, trade agreements, climate, education and many more topics. Each of these factors requires significant changes in how individual business units operate from one country to the next. The conduct of international operations depends on companies' objectives and the means with which they carry them out.

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  Analyzing the Global Political Economy

  • Andrew Walter, Gautam Sen(Authors)
  • 2008(Publication Date)
  • Princeton University Press

    (Publisher)

  6 The Political Economy of Foreign Direct Investment A lthough globalization skeptics often argue that trade and fi-nancial interdependence between countries is nothing new, 1 few doubt that multinational corporations (MNCs) have unprecedented impor-tance in the contemporary global economy. 2 Of course, MNCs them-selves are not new and were known in the ancient world. Certainly, by the early modern period, private firms heavily involved in international trade had established trading outposts and sourcing operations in other countries. Perhaps the most famous, the East India Company, had ob-tained monopoly privileges from the English state at the beginning of the seventeenth century and came to wield considerable political and military power in India and elsewhere. 3 Under the umbrella of imperial-ism, European firms established operations in many countries over the next few centuries. Meanwhile, banks established foreign branches to meet the financing needs of corporate and sovereign clients (e.g., the Rothschilds). From about the mid-nineteenth century, large firms emerged by exploiting economies of scale and scope, particularly in the new industries of chemicals, electricals, and later automobiles. 4 In the 1 Paul Hirst and Grahame Thompson, Globalization in Question: The International Economy and the Possibilities of Governance (Cambridge: Polity, 2nd ed., 2000). 2 Bordo, Eichengreen, and Irwin, “Is Globalization Today Really Different.” 3 John Keay, The Honourable Company: A History of the English East India Company (London: HarperCollins, 1991). 4 Alfred D. Chandler, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge: Har-vard University Press, 1990). Economies of scale occur when an increase in output is associated with falling average per unit cost. Economies of scope occur when average cost falls as the firm produces a larger number of different but related products.

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  International Encyclopedia of Organization Studies

  • Stewart Clegg, James R. Bailey, Stewart R Clegg, James Bailey(Authors)
  • 2007(Publication Date)
  • SAGE Publications, Inc

    (Publisher)

  Conceptual Overview The practice of international trade is ageless. Archeol-ogists document thousands of years of movement of goods and services between societies. In less than 50 years, the field of international management has moved into the foreground as international business has grown in importance relative to domestic business activity. In 2004, Fortune 500 companies experienced growth in employment in their foreign operations that was seven times higher than the growth in their domestic opera-tions; European, Asian, and other firms around the world are experiencing similar dynamics. International management grapples with disappearing boundaries among functional business activities, between organiza-tions and across nations; dynamic work environments characterized by rapid change; and entry of new interna-tional players like Haier and Lenovo from China, Cemex from Mexico, Embraer from Brazil, Gazprom from Russia, and Tata and Mittal from India. In addi-tion, information technology is flattening the world. Organizing MNCs are very large companies engaged in inter-national business activities. They may have manufac-turing, service, sales, or research and development sites in different countries around the world and may be organized in a variety of ways. One common MNC structure is the miniature replica in which almost all of the home country headquarters functions are replicated in a stand-alone fashion in each country in which the MNC operates. This structure is typical of MNCs that produce personal care or food products. Other MNCs are organized in very centralized structures where functions like finance and research and development are retained in the home country and only production, service delivery, or sales occurs in the foreign country. This is more typical of MNCs producing standardized products like consumer electronics, telecommunica-tions equipment, and computer products.

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  Government and Business

  American Political Economy in Comparative Perspective

  • Richard Lehne(Author)
  • 2012(Publication Date)
  • CQ Press

    (Publisher)

  Although U.S. producers have long been active in global markets, international firms now affect economic conditions within the United States as well. A British company has bought Holiday Inns, Japanese firms acquired Firestone and CBS Records, and German corporations took over the A&P, Chrysler, and a major cell phone operator. Each country’s economic institutions define its style of capitalism and determine how its firms fit into the emerging global framework. The chapter concludes with an assessment of national styles of capitalism and their relation-ship to globalization. The Emergence of the Global Marketplace In his best-selling book The Lexus and the Olive Tree , Thomas Friedman, a col-umnist for the New York Times , contends that globalization now “shapes virtually everyone’s domestic politics and international relations.” 6 Friedman associates globalization with an impressive array of important world events, but he fails to define what globalization actually is. Friedman and other analysts find little value in forcing the multiple facets of globalization into a single framework, but with-out clarity the concept becomes difficult to apply. 7 Globalization originated as an economic concept involving the behavior of firms, and I use it in that sense here. 8 Globalization is an increase in cross-border commercial activity. Globaliza-tion, therefore, involves the establishment of cross-border production systems, distribution networks, financial markets, and product development centers. Glo-balization was made possible by both technological advances and international agreements. Enhanced technology has increased the mobility of people, goods, and capital across national borders, and it has created communications networks that permit people everywhere to share messages instantaneously. 9 As individual corporations rationalize their use of resources globally, they increase their productivity and improve their position in the marketplace.

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  The Development of Modern Business

  • Gordon Boyce, Simon Ville(Authors)
  • 2017(Publication Date)
  • Red Globe Press

    (Publisher)

  PART A: CURRENT ISSUES International business has occupied a prominent position in many economies in the twentieth century. Of the nations we are studying, America, Britain and Japan have been among the largest sources of international business, Aus-tralia, America and Britain some of its leading recipients. The globalisation of markets and technology, particularly in the 1990s, has increased dramatically the size and reach of many international firms and influenced the ways in which they organise their activities. The arrival of foreign firms can provide a stimulus to a nation’s economic development through flows of investment, technology, skills and knowledge. At the same time, receiver countries fear the threat to national self-determination and endogenous progress from large, and perhaps culturally alien, corporations. Sender nations are also sensi-tive to the likely loss of exports and leakage of competitive advantages as domestic firms move abroad. Thus, the activities of large powerful interna-tional firms have generated strong emotions regarding business ethics and the extent of their corporate responsibilities, particularly in small developing host economies. As multinationals increasingly cross cultures and continents in the twenty-first century, their relationships with their hosts have become a paramount issue. American firms like K-Mart, Wal-Mart, Coca-Cola and McDonald’s have recently learned some hard lessons about the obstacles to international expansion; what works at home often does not in the host nation (Box 10.3). International business comes in many forms including exporting, con-tracting the services of a foreign company, and operating as a multinational enterprise . The multinational enterprise is best understood as a business that controls income-generating resources (including production facilities or sales and marketing outlets) in more than one country.

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  Globalization in Question

  • Paul Hirst, Grahame Thompson, Simon Bromley(Authors)
  • 2015(Publication Date)
  • Polity

    (Publisher)

  3

  Multinational Companies and the Internationalization of Business Activity

  This chapter moves away from the history of the international trading and financial system. It concentrates on the major changes in the structure of the international economy since the early 1980s, particularly in terms of the internationalization of production. One of the key changes identified and explored here is the increased salience of, and rapid growth in, foreign direct investment (FDI). In the period 1945–73 the dominant factor driving the world economy was growth in international trade; from the early 1980s onwards, it is argued, it has been growth in FDI. It should be noted, however, that in this chapter we develop a critique of this particular measure of the internationalization of production. A more recent associated consequence of this internationalization of production has been the phenomenon of ‘offshoring’: the move of aspects of company production and service systems away from their traditional ‘home’ country base to foreign destinations. This phenomenon is considered in a later section.

  This chapter concentrates on those international mechanisms that have an impact on the structure of and growth in the real economy: trade and FDI. International short-term financial flows, which expanded rapidly after the abandonment of semi-fixed exchange rates and capital controls in the 1970s, are analysed elsewhere (chapters 2, 6 and 7). Clearly, these short-term capital flows have some indirect impact on economic growth since they affect national exchange rates and interest rates, but we contend that they mainly redistribute success – and more often failure – around the international system, and add little to the structural capacity of economies to generate long-term aggregate growth.

  It is multinational companies (MNCs) that are the agents responsible for FDI. The strategies of these organizations as they shape the role and distribution of FDI are central to the analysis that follows. As we shall see, that distribution is socially and geographically uneven on a world scale. FDI is heavily concentrated in the advanced industrial states and in a small number of rapidly developing industrial economies. This analysis is complemented later in the chapter by a detailed empirical investigation into the geographical distribution of advanced country business activity, contrasting its home and foreign concentrations.

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  Theory and Management of Collective Strategies in International Business

  The Impact of Globalization on Japanese German Business Cooperations in Asia

  • R. Haak(Author)
  • 2003(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  11 2 Forms of International Business: Theoretical Foundation and Characteristics Internationalization of the firm Seen from a historical perspective, international company activity has its roots in the eighteenth and nineteenth centuries, particularly in colonial areas. Closer examination reveals that this form of international activity was strongly national in nature and carried out within an empire (Perridon and Rössler, 1980, p. 121). At the end of the nineteenth cen- tury, activity on the part of still effectively national companies became increasingly internationalized. This development was aided by liberal economic policy and the increasing political independence of nations. From the point of view of the colonial powers of the eighteenth and nineteenth centuries, this early phase in international company activity was limited mainly to the export of finished products (Sydow, 1993, p. 51). However, securing sources of raw materials also represented a significant factor for the early internationalization of corporate activity. Companies began increasingly to engage in business across national boundaries, and as part of their international business strategy targeted promising markets abroad quite specifically with finished products, without however, and this is very important for the classical definition of international strategy, taking account of or adapting to country-specific features (Kutschker and Schmid, 2002; Perlitz, 1997a; Sydow, 1993; Anderson, 1997). In contrast, the multinational strategy does take account of country-specific features, and, as a rule, in addition to the sales function realized on the foreign mar- ket, production, research and development are also undertaken in the for- eign country (see also Boddewyn, 1988). R. Haak, Theory and Management of Collective Strategies in International Business © René Haak 2004

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  Experiencing International Business and Management

  Exercises, Projects, and Cases

  • Betty Jane Punnett(Author)
  • 2014(Publication Date)
  • Routledge

    (Publisher)

  Exercises This page intentionally left blank 19 Exercise 1 Defining an International Company Aim This exercise can be a good introduction to the topic of international business. It also can be used to help you summarize what has been learned about International Companies. Time This exercise should take students about 30 minutes of outside preparation and about 60 minutes of class time. Assignment Individual: Imagine that you can categorize companies as “domestic” or “international.” A “domestic” company would be one that relies very little on international activities—most inputs/supplies are sourced domestically, operations are all domestic and markets are do- mestic; an “international” company is one that relies substantially on international activities. Do some library or Internet research on the differences between domestic and International Companies and make a list of the characteristics of an organization that would probably differ for domestic and International Companies; be as exhaustive and imaginative as possible. Group: Discuss the characteristics identified by group members. The group should decide which characteristics are most useful and develop a list of criteria to be used for judging whether or not a company is international. Please use the worksheet provided. For example, your group might consider “ratio of foreign sales to domestic sales” an important distinguishing charac- teristic and decide that once a company reaches foreign sales of 20 percent of total sales, it should be considered international. Once your group has decided on a list of characteristics and criteria, move on to the rest of the exercise. Here you are asked to develop a definition of an international company and to consider if there are degrees of internationalism; that is, do you feel it is helpful to distinguish between a multinational, an international, a transnational, and a global company? Use the Worksheet for Exercise 1 on the next page to address these issues.

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  The Management of International Enterprises

  A Socio-Political View

  • M. Tayeb(Author)
  • 2000(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  They are more or less subject to the same laws and regulations in their host country as are their local counterparts. However, many other nations, especially the ex-colonies of today's major economic powers or those which have somehow been manipulated and exploited by such powers in the past, are suspicious of multinational companies from these powers. The East India Company still lives on in the collective memory of Indian people after over two and a half centuries. Certain US com- panies have in the past been instrumental in furthering their home coun- tries' political goals in Latin America. The involvement of AT&T in the US-supported coup d'etat which led to the overthrow of Allende's regime and the coming to power of General Pinochet in Chile in 1973 (Morgan, 1986) is a textbook example of such political interventions. The situation, however, as Rugman (1998) argues, appears to have changed since those heady days. Nowadays multinational firms have a Motives and Limits to Intemationalisation 81 good record of observing the regulations imposed by governments and international organisations. They appear to be, in any case, too pre- occupied with survival, profitability and growth to interfere in any major way in the social, cultural and other non-economic areas of national activity. According to Rugman, the nature of triad (US, EU, Japan) based competition faced by these multinational firms limits their ability to pursue political goals since they are forced to concentrate on their ongoing operational efficiency and strategic planning in order to sur- vive. Conflict can arise between foreign firms and government in the arena of international political economy. This relates to the ability of such firms to lobby and otherwise influence the policies of national (and sub-national) governments in areas such as trade, investment, science and technology, and in the administration of these policies by bureau- cracies.

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