Transnational Corporations

12 Key excerpts on "Transnational Corporations"

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  Power in the Global Era

  Grounding Globalization

  • T. Cohn, S. McBride, J. Wiseman, T. Cohn, S. McBride, J. Wiseman(Authors)
  • 2000(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  1 For example, the imaginations of eminent scholars in both politics and law have been captured by the issue of the retreat or decline of the state wrought by forces of globalization. 2 It is most curious, however, that transnational corpora- tions, which are regarded by students of political economy as major participants in globalization processes, are given scant attention in international law. A brief review of the reasoning attending the concern of students of politics with the significance of transnational corpora- tions will assist in setting the stage for an examination of this curiosity of law. Political economists describe Transnational Corporations as the ‘cent- ral organizers’, the ‘engines of growth’ and the ‘driving force’ of the world economy. 3 They are the ‘main actors’ and ‘most significant eco- nomic players in the world economy’; 4 the ‘linchpins’, ‘prime agents’ of the global political economy, 5 and ‘the most important economic institutions of our time.’ 6 For many of these analysts, transnational cor- porations are regarded as central elements in contemporary transforma- tions in the global political economy. Indeed, there is a sense that we are in the midst of qualitative transformations of the global political economy that are only intelligible by shifting our focus away from states to other actors and agents, like markets and firms. 7 Susan Strange is well-known for her efforts to focus attention on the political signific- ance of firms as part of a more general shift from a politics based on T.H. Cohn et al. (eds.), Power in the Global Era © Theodore H. Cohn, Stephen McBride and John Wiseman 2000 54 Power in the Global Era states to that based on markets and triangular diplomacy between states, between states and firms, and between firms. 8 She argues that ‘the progressive integration of the world economy, through interna- tional production, has shifted the balance of power away from states and toward world markets.

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  Transnational Corporations and Business Networks

  • Henry Wai-Chung Yeung(Author)
  • 2002(Publication Date)
  • Routledge

    (Publisher)

  geographical differences in the workings of network relationships, we look at the case of Chinese business firms and their transnational operations. Today, most Chinese business firms are still largely embedded in networks of business and personal relationships that will be examined in detail later in this book (see also Yeung, 1997a, 1997b). These business and personal networks of relationships are (1) socially specific because they are institutionalised in the Chinese business system and (2) geographically specific because they are primarily found among the overseas Chinese diaspora throughout the Asian region. The Chinese rely substantially upon personal and business relationships, as processes of business organisation, to engage in transnational operations. They tend to shy away from strategic alliances, but prefer to engage in informal and personal networks of inter-firm relationships. In this sense, the case of Chinese business firms contrasts nicely with typical Western firms in that the former rely upon networks as processes and relations whereas the latter rely upon networks as a form of organising economic activities. There are many social and cultural specificities in the different types of business networks and their transnational operations. In this book, I examine these specificities with reference to the case of TNCs from Hong Kong.

  Towards a broader definition of the transnational corporation

  The above conceptualisation of the TNC both as network forms of structures and as processes and relations of network structures has serious implications for our definition of the TNC. What exactly is a transnational corporation, given the diverse range of activities in which it is engaged? To begin with, there are several alternative types of economic definition of the TNC (Buckley and Casson, 1985):

  1  an ‘operating’ definition: any firm that owns or controls income-generating assets in more than one country; 2  a ‘structural’ definition: multinationality is judged according to corporate organisation; 3  a ‘performance’ definition: some absolute or relative measure of international spread, e.g. number of foreign subsidiaries and percentage of sales accounted for by foreign sales; 4  a ‘behavioural’ definition: the corporation’s degree of geocentricity and spread.

  There are many problems associated with these different definitions of TNCs. First, as Cowling and Sugden (1987: 57) argue, there has been ‘a tendency to simply provide a definition [of the TNC] without deriving it from first principles’ such as the theory of the firm. The definition of TNCs by the United Nations Economic and Social Council is an example of an influential definition devoid of its theoretical roots. TNCs are referred to as ‘all enterprises which control assets – factories, mines, sales offices and the like – in two or more countries’ (UNCTC, 1978: 158). Second, for those definitions that are grounded in principles such as the theory of the firm, there is a problem of misguided focus. For example, following Coase’s (1937) view that the firm is the means of coordinating production without using market exchange, Buckley and Casson (1976) simply view the TNC as a firm in which the coordination of production without using market exchange takes the firm across national boundaries. This emphasis on the dichotomy between market and non-market exchanges (i.e. types of exchange) has fundamentally overlooked the nature of exchange, which, according to Cowling and Sugden (1987), should form the essential elements in the definition of TNCs. The mature Coase, in his 1988 lecture, recognised the central importance of organisational coordination among

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  Social Justice and Development

  • Behrooz Morvaridi(Author)
  • 2008(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  Our concern should be with the democratic accountability of Transnational Corporations that tend to wield more economic, and as a consequence political, power than many states. According to Sklair (2001), the current global order sus- tains domination of the processes of globalisation by a transnational capitalist class who are mostly major investors in or owners of TNCs. His ‘global system theory’ is based on the concept of transnational practices that cross state borders but do not necessarily originate with state agencies or actors and in terms of scale are increasingly unsus- tainable in the ecological sense. A raft of statistics can be provided to demonstrate just how powerful the actions of TNCs are. For example, in terms of trade, the revenue of the 350 largest TNCs amounts to one- third of the industrialised world’s GNP and outstrips the GNP of the entire countries in the south. The top five corporations have an annual revenue that is more than double the total GDP of the 100 poorest countries. TNCs control around 70 per cent of world trade and 90 per cent of all technology and product worldwide. Analysis of aggregate data estimates that TNCs are responsible for around 50 per cent of annual contributions to global warming and ozone depletion (UNCTC, 1992). Despite this alarming picture, the current system of economic globalisation is sustained by the ideology of consumerism that encour- ages people to purchase goods and services that TNCs produce for private profit. In terms of a global governance structure that addresses cosmopolitan human rights, TNC activity cannot be ignored. There are two essential problems associated with the practice of TNCs that have to be considered in the discourse of CSR for human rights. The first is their contribution to increasing poverty within and between communities and societies (the class polarisation crisis). The second is the unsustainability of the current system or, what could be known as, the ecological crisis.

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  Legal Aspects of the New International Economic Order

  • Kamal Hossain(Author)
  • 2013(Publication Date)
  • Bloomsbury Academic

    (Publisher)

  More specifically, trans-national corporations in their employment practices should avoid discrimi-nation on the basis of race, colour, sex, religion, political or other opinions or social origin. (vi) The code prohibits political interference of various types. Trans-national corporations should not interfere in the internal political affairs of countries in which they operate, particularly by resorting to subversive activities, attempting to overthrow governments or to alter by pressure or coercion, the political and social systems in these countries. Trans-national corporations should act as good corporate citizens and abstain from activities of a political nature clearly inconsistent with the domestic legislation or established practice in such countries. (vii) Transnational Corporations are further to abstain from improper interference in inter-governmental relations. More explicitly, Transnational Corporations, in pursuing their corporate interests, should not request International Regulation 129 their home governments to act on their behalf in any manner that exceeds normal diplomatic representation or other regular intergovernmental communication and, in particular any manner that amounts to the exercise of political and economic pressure on other governments. In this regard, Transnational Corporations should, in accordance with international practice, exhaust legal means available in host countries for resolving disputes before seeking diplomatic support from their home governments. The code's prescriptions on the economic, financial and social aspects of the activities of Transnational Corporations deal specifically with such subjects as ownership and control, balance of payments, taxation, transfer pricing, consumer protection, environmental protection and disclosure of information, all areas which have perennially generated conflicts in the relations between governments and Transnational Corporations.

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  Stories of Globalization

  Transnational Corporations, Resistance, and the State

  • Alessandro Bonanno, Douglas H. Constance(Authors)
  • 2008(Publication Date)
  • Penn State University Press

    (Publisher)

  This move prompted nation-states, in order to attract corporate investments, to adopt globally oriented macro- organizational strategies that shifted emphasis away from socially oriented goals—i.e., social stability, equitable socioeconomic growth, welfare spend- ing—to profit-enhancing objectives. The allocation of FDI became increas- ingly linked to supportive economic policies and the ‘‘regulatory and policy instruments’’ employed by nation-states. This trend was a common feature of national economic policies worldwide during the final years of the twentieth century. GLOBALIZATION OF THE ECONOMY AND SOCIETY 37 Transnational Corporations Under globalization TNCs have been central players in the rapid increase in global commerce and in the implementation of policies that reduced barriers to the free circulation of capital. Mostly owing to technological advance- ments, TNCs are organized and operate differently from their national and multinational counterparts. In today’s global economy TNCs resemble the ‘‘central nervous system’’ of a larger set of interdependent, but much less formally governed, activities whose purpose is to ‘‘advance the global com- petitive strategy of the organization’’ (Dunning 1993, 293). Unlike the mother-daughter relationship of earlier corporate organizational forms, the new organizational form of the global corporation is better perceived as a heterarchy rather than a hierarchy, whereby shared strategies and norms hold together a set of interdependent and geographically dispersed centers whose assets are sometimes owned but could be supplied jointly with other firms or purchased from a global network of suppliers. As a result of mergers, acquisitions, and joint ventures, TNCs’ boundaries are increasingly blurred, new corporate alliances are forged, and corporate networking is overtly multifocused. Today, TNCs are orchestrators of sets of geographically dis- persed but interdependent assets.

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  Corporate Social Responsibility in a Globalizing World

  • Kiyoteru Tsutsui, Alwyn Lim(Authors)
  • 2015(Publication Date)
  • Cambridge University Press

    (Publisher)

  The social movement actors also work to incorporate the transnationals into the disciplining social structures of CSR or global This chapter benefitted from comments received at conferences on corporate social responsibility in Ann Arbor (2010) and Tokyo (2012) and from comments from Patricia Bromley. In addition to the main funding for the CSR project, work on this paper was aided by funds from the Korean National Research Foundation project at Yonsei University. 27 citizenship. With institutionalization, responsibility comes to be seen as being in the interest of transnational business. In this chapter, we inter- pret the corporate responsibility movements as paralleling at the global level earlier systems attempting to control economic forces working beyond any organized polity. The problem is especially acute in polities granting a good deal of public standing to private self-interest. As Tocqueville (1969 [1836]) emphasized, liberal culture (as in nineteenth- century America) generates quite elaborate displays of the virtuous self as citizen. Global neoliberalism, with its celebration of economic self- interest, now produces a worldwide regime for the public certification of the global citizenship of the modern transnational corporation. Whether or not the new norms actually improve practice, they certainly tend to reinforce a “logic of confidence” that participants, although still a minor fraction of those eligible (see Chapter 3 by Peter Utting), are committed to a proper global order (Meyer and Rowan 1978). We review the background of the issue. Then we discuss the legit- imation problems posed by the rapid post-World War II expansion of Transnational Corporations outside the effective control of national states. Then we analyze the rise, in response, of an elaborate organiza- tional field of CSR.

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  Encyclopedia of Consumer Culture

  • Dale Southerton(Author)
  • 2011(Publication Date)
  • SAGE Publications, Inc

    (Publisher)

  Many theo-rists, for example, William Robinson, have discussed these issues within the triadic framework of states, TNCs, and international economic institutions. From this perspective, transnational capitalism is dominated by the relations between the major states and state-systems (the United States, the European Union, and Japan), the major corporations, and the international financial institutions, notably the World Bank and International Monetary Fund, supplemented in some versions by the WTO, other international bodies, major regional institutions, and so on. This has stimulated interest in who runs trans-national capitalism. One explicit approach to this large question focuses on the concept of the transnational capital-ist class (TCC) as formulated by Sklair. The TCC may be analytically divided into four main fractions: (1) TNC executives and their local affiliates; (2) glo-balizing politicians and bureaucrats; (3) globalizing professionals; and (4) consumerist elites of merchants, media, and advertising. The TCC is transnational in several senses: its members have outward-oriented global rather than inward-oriented national perspec-tives on a variety of issues, for example, support for free trade and neoliberal economic and social policies; and it includes people from many countries, more and more of whom begin to consider themselves as citizens of the world as well as of their places of birth and residence (these might differ) who share similar lifestyles, particularly patterns of higher education (in cosmopolitan universities and business schools) and consumption of luxury goods and services. While Marxist and Marx-inspired theories of the inevitability of a fatal economic crisis of transnational capitalism appear to have lost most of their adherents (at least until the global financial crisis that began in 2008 gave new life to the idea), Sklair argues that at least two related but logically distinct crises can be identified.

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  Synconomy

  Adding value in a world of continuously connected business

  • J. DiVanna(Author)
  • 2003(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  One could argue that smaller nation states have the most to gain and are in the best position to lead this transformation of global commerce, because their inter-government structures contain less layers of bureaucracy and they have fewer special interest groups to pacify. However, in numerous smaller states, the special interest groups are indeed powerful and often sources of corruption. As the synconomy continues to emerge, mirroring this multinational economic change is the renovation of small, medium-sized and large corporations that are engaging in transnational commercial activity, embracing new levels of customer service, offering greater ranges of prod- ucts and demanding employees with higher levels of skills. The demand for skills and a greater ability to put business into a global context also alters the services that businesses provide to employees, as individuals are The Redefinition of the Corporation and the Nation State 137 exposed to compensation plans that vary widely between organizations with a transnational corporate structure and across globally competing companies. To retain talent, corporations reinvent compensation offerings to supply benefits that more closely match the needs of a global workforce. There is growing speculation that corporations will evolve to encompass additional benefits and services which will ultimately perform many of the services traditionally performed by governments, creating a corporate state which crosses transnational borders. It would be naive to think that corpo- rations will evolve to take on the responsibilities of running a nation state. Let us face facts: governments are not profitable ventures and although companies may provide benefits that resemble government functions, they are only a by-product of profit-making activities.

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  International Economic Law

  Basic Documents

  • Philip Kunig, Niels Lau, Werner Meng, Philip Kunig, Niels Lau, Werner Meng(Authors)
  • 2019(Publication Date)
  • De Gruyter

    (Publisher)

  economic, financial and social Ownership and control 21. Transnational Corporations should/shall make every effort so to allocate their To be included in one of the substantive introductory parts of the Code. 568 UN-Draft Code of Conduct Doc. 37 decision-making powers among their entities as to enable them to contribute to the economic and social development of the countries in which they operate. 22. To the extent permitted by national laws, policies and regulations of the country in which it operates, each entity of a transnational corporation should/shall co-operate with the other entities, in accordance with the actual distribution of responsibilities among them and consistent with paragraph 21, so as to enable each entity to meet effectively the requirements established by the laws, policies and regulations of the country in which it operates. 23. Transnational Corporations shall/should co-operate with Governments and nationals of the oountries in which they operate in the implementation of national objectives for local equity participation and for the effective exercise of control by local partners as determined by equity, contractual terms in non-equity arrangements or the laws of such countries.

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  The Transformation of Solidarity

  Changing Risks and the Future of the Welfare State

  • Romke van der Veen, Mara Yerkes, Peter Achterberg, Romke van der Veen, Mara Yerkes, Peter Achterberg(Authors)
  • 2012(Publication Date)
  • Amsterdam University Press

    (Publisher)

  In this chapter, we investigate the development of labour policies in two Transnational Corporations. We learn that due to the fact that these corpora-tions are embedded in different national and transnational economic fields, the extent to which corporate responsibility for protection against social risks is diminishing varies from risk to risk, and that a polarisation is taking place in corporate responsibility between the responsibility taken for higher man-agement and responsibility taken for lower levels of personnel.  JOHAN HEILBRON AND SANDER QUAK 1 Introduction Because the role of large firms has been unduly neglected in many de-bates about the transformation of the welfare state, in this chapter we will explore the changes large corporations have gone through since the 1980s and assess some of the consequences these have had for the redefi-nition and redistribution of social risks. We will do so by considering the profound transformation in the way corporations managed their labour force during the last two decades of the twentieth century. The most sim-ple and straightforward description of this transformation is that it has shifted from ‘personnel administration,’ carried out in primarily national settings, to a more transnational mode of ‘human resource management’. Our approach to this change differs from the standard economic analysis in which firms are seen as isolated actors that pursue their objectives in-dependent of their relations to other actors. In contrast to such a view, our analysis is centred on the way in which firms are embedded in the context in which they operate. The various modes of embeddedness can be con-ceived in terms of field dynamics, in the sense that Bourdieu (2005) and Fligstein (2001) have given to the concept. Economic actors are embedded in field structures, which define the constraints as well as the opportuni-ties these actors confront.

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  A History of Socially Responsible Business, c.1600–1950

  • William A Pettigrew, David Chan Smith, William A Pettigrew, David Chan Smith(Authors)
  • 2017(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  Places such as Liverpool carried a collective reputation which, in belonging to the city, trickled down to businesses operating within. Thus firms within the city had an incentive to protect and uplift the business community and wider inhabitants. Thus, Grief’s idea of CRS could be a good way of explaining merchant involvement in charities and political lobbying beyond self-interest and evangelical motivations. The examples in this chapter suggest how much of a challenge the increasingly global ambi- tions of these firms presented to such a system of responsibility. 140 E. Buchnea One first needs to identify what constitutes a multinational enter- prise (MNE) at this time, to understand the dynamics of their busi- ness abroad. Peter Buckley and Mark Casson define the MNE as an “enterprise which owns and controls activities in different countries.” 10 Another definition from Dunning and Lundan defines a multinational or transnational enterprise as “an enterprise that engages in foreign direct investment (FDI) and owns or, in some way, controls value-added activi- ties in more than one country.” 11 Both of these definitions could encom- pass an assessment of firms’ social enterprises in local and transnational contexts. The firms examined in this chapter had a domestic base in either Britain or the USA (and on occasion in additional locations). They sent members or associates abroad who acted on behalf of the firm and who, ideally, reported back to the firm on a regular basis. These individuals set up either branch houses or sister houses or were deemed “special resident agents.” 12 Who these members were and how they were linked to the firm was far more informal than modern notions of headquarters, subsidiaries, and formal, rigid organisational structure in general; however, the fundamentals and reasons for going abroad were generally the same: opportunity, resources, and closer control over activ- ity in regional and local markets.

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  Transnational Transfers and Global Development

  • S. Brown(Author)
  • 2016(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  1 Introduction: Toward a Theory of Transnational Transfers Stuart S. Brown 1 1 Economic globalization is popularly defined as the progressive integra- tion of national markets, facilitated by a revolution in transportation and advances in information and communications technology. Driving this process have been Transnational Corporations that have erected increasingly intricate global supply chains and trading networks. Such commercial advances have, in turn, intensified interdependence among states, while complicating the latter’s policymaking processes. Yet, between the crevices of these trading and financial arrangements operates another set of transnational actors who function in spheres strictly outside those of the profit-maximizing business community as well as the public policy–driven state. On a daily basis these actors uni- laterally move money, services, ideas, and norms abroad. Such transfers have become increasingly central to the evolution of the global political and economic system. At issue in this volume is whether or not the vari- egated, cross-border activities of such non-state actors can be analyzed through a single conceptual lens. Of interest are the activities where non-state actors transfer value with no assurance, or even expectation, of reciprocal compensation. Consider such activities as the remittances sent back “home” to their families by workers who have migrated to other parts of the world, glo- bal philanthropy, the ideas and information that are exchanged in the person-to-person diplomacy that occurs as students seek an education outside their own country, and the notions of civil society and democ- racy that are brought by US and European-based nongovernmental organizations (NGOs) to countries in the Global South as they deliver humanitarian relief services and engage in development projects. We propose in this volume to conceptually characterize and empirically analyze such “non-state transnational transfers,” viewing them as

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