Transnational Corporations Essay Example | Topics and Well Written Essays - 3000 words

Transnational Corporations - turn out ExampleBasically, TNCs aggregate yearly sales would correspond to or atomic number 18 greater than the annual revenue domestic product (GDP) of most countries. A classic example would be Itochu Corporations sales which exceed the crude(a) domestic product of Austria, while those of Royal Dutch/Shell run parallel with Irans GDP. Together, the sales of Mitsui and popular Motors ar greater than the GDPs of Denmark, Portugal, and Turkey combined, and US$50 billion more than all the GDPs of the countries in sub-Saharan Africa (UNCTAD 1994).Because of their considerable size, TNCs are likely to control and dictate in industries where output and markets are oligopolistic, or converged in the hands of a comparatively small number of degradeds. The top five car and truck manufacturers are responsible for nearly 60% of motor vehicles global revenues. The five leading oil companies account for everywhere 40% of the industrys world market share (The Economist 1993).TNCs trading operations cover the whole world however, they are based for the most part in Western Europe, North America, and Japan. The Swiss electrical engineering monstrosity ABB has facilities in 140 nations, while Royal Dutch/Shell digs up for oil in 50 countries, conducts refining activities in 34 homelands, and markets its products in 100 nation states. Offices of the US food impact firm H.J. Heinz cover six continents and Cargill, the USs largest grain company operates in 54 countries. Britains major chemical firm ICI has manufacturing operations in 40 nations and sales affiliates in 150 countries (Hoover 1993).The term transnational corporation meaning a for-profit enterprise which is explicitly identified by two salient features -- 1) engages in enough trade activities -- including sales, distribution, extraction, manufacturing, and research and development -- outside the country of origin so that it is dependent financially on operations in two or m ore countries 2) management decisions are made based on regional or global alternatives (Hadari 1973). In essence, transnational corporations are recognised as prime components of capitalism and a most important conduit of globalisation. Globalisation, TNCs and Host Governments In this age of frenetic globalisation, the transnational corporation is indisputably the free markets superior and untouchable agent. Economically, these corporate giants dwarf the resources of many developing countries and evidently such status can be attributed to its extraordinary capacity and swift faculty to create wealth. Dubious however, is its reputation as an economic distributor, as a democratic contributor, and as a supporter of human rights in general (Letnes and Westveld 2004). These issues are specifically debatable in developing countries where some view the transnational corporation as a vehicle of development while others see it as nothing but a neo-colonial tool of exploitation.Interaction is Motive-Dependent In the face of contradictory motivations and intentions and the fact that TNCs overshadow many of the smaller economies in bargaining power (Evans 1985, 216-21 Walters and Blake 1992, 124), TNCs engage in positive dialogues with host countries economic and social conditions (especially in the sphere of human rights) -- out of either a genuine sense of social responsibility or out of respect for the market consequence of the spotlight phenomenon