The transnational corporations have large revenues and can exercise more power than the individual states across which they operate. The companies ‘command enormous financial resources, possess vast technical resources, and they have extensive global reach’ (CSIDS, n.d, p.1). It has been noted that the combined revenue of General Motors and Ford is larger than the total Gross Domestic Product (GDP) for the countries in Sub-Saharan Africa (Ward, 2003). Comparable statistics and facts apply to other giant automobile corporations in the world and the individual economy of certain countries. It then beats logic in the kind of influence that these transnational corporations can have on the regional and global economy. As such, the transnational corporations have significant market power (Ietto-Gillies, 2012). They play significant roles and they have negative and positive impacts on the local, regional, and global development issues. This paper focuses on the roles that the TNCs play in shaping the global economy and the significant impacts that have been observed from the move to go global. The domination of these large corporations in different sector of the world economy is illustrated. The impacts of the TNC Significant developments have been recorded in the foreign direct investments by the transnational corporations since the 1980s with the TNCs taking different forms (Lundan, 2011, p.640). Significant increases have also been observed in the worth of the FDIs. For instance, the total global foreign direct investment in 2002 amounted to about $651bn (CSIDS, n.d). The developed nations are the major home countries for the foreign direct investors and the countries receive much of the proceeds from the investments. Much literature is available that focus on the impacts of TNCs on the home countries (the developed nations) and the literatures conclude that the outflows in Foreign direct investments relates positively with the net productivity in the home country (Sauvant, 2008, p.229). To the developing nations, the foreign direct investments provide the largest source of external finance to the home economy (CSIDS, n.d). Nonetheless, it is still debatable as to whether the transnational corporations help in developing this underdeveloped nations or the corporations are just in pursuit of their interest and do not care about their negative impacts on the society. In as much as the organizations may be considered sources of funds to the recipient nations, it is also worthwhile to note that the organizations are out to seek profits. Efforts to have a state of balance between these two conflicting roles (a profit-seeking organization and source of funds to the recipient country) lead to mixture of negative impacts of the transnational corporations on the national and regional economies. Potential benefits of TNCs One of the positive impacts of the TNCs is that they create employment opportunities in the recipient nations (CSIDS, n.d). Availability of cheap labor is one among the factors that drive a company to go global and establish its FDIs in
Running head: Transnational Corporations Transnational Corporations-Roles and Impacts Insert Name Insert Grade Course Insert February 29, 2012 Transnational Corporations-Roles and Impacts Introductions The increased globalization that has been realized in the past, accelerated by factors like removed trade barriers, has prompted large organizations to expand their operations across the national boundaries in order to exploit the investment opportunities that may arise in these regions (Center for Study of International Development Strategies, n.d)…
" In an attempt to understand the concept of transnational companies, it is of great importance that views by various researchers and analysts are critically reviewed to understand this concept. With the concept of the transnational companies creating diverse views in the business world, according to Eckes (2011, pp.44), this theme is indeed one that needs to be discussed in broad detail.
There are many multinational corporations in the world today. For instance coca cola, Barclays, shell, Guinness Breweries, DHL, IBM, MTN and others. The presence and establishment of MNC in developing countries has brought a lot of debates all over the world.
On the other hand, countries that contain oil such as those in the Persian Gulf have contributed immensely to the supply of energy sources to America and its industrial partners. These links have assisted establish efficient relations between America and friendly Muslim and Arab nations (Jocelyne, 2007).
The principal cause of the dilemma involving transnational business corporations and human rights violations is the vacuum in governance created by globalization. Multinational companies transacting across borders may circumvent the framework of governance imposed by national law, because the parties of to the contract or transaction are not totally within the rule of one nation.
TNC's are usually so structured that one "corporate" branch exerts influence over the others, and/or resources, responsibilities, knowledge, and protocol are shared among them. Transnational corporations participate in many globalising activities, and in the countries that host them they contribute in many ways to the dynamics of the economy.
In addition to size and financial strength, they have progressively become more potent; their significance amplified and they have become influential players in the global showground. With 800,000 affiliates abroad, 60,000 TNCs in the year 2000 had as foreign direct investment (FDI) an overwhelming $1.3 trillion (UNCTAD 2001).
Over the last decade or so, there is this outcry against anything that falls within the category of 'multinational'. The very term denotes a firm that has a presence globally or rather one that would like to be known in more parts of the world than it is at the present point in time.
Allegations against these profit seeking corporations include destructive competition and insidious plots to economically and politically manipulate entire economies. Maybe the worst charge is that multinational corporations are methodically
All these factors help explain the rise of truly multinational companies, whose products sell in all corners of globe and which belong to no particular country.
Similarly, the rules of business have changed greatly during these years. In the
Even as corporations continue to create public perceptions that they care for the environment, critics have argued that such efforts cannot reverse the damages that have already taken place and those that continue to happen. It is against this background that the current essay explores whether corporations should be perceived as polluters or as protectors of the environment taking into consideration the efforts made under green initiates.
9 pages (2250 words)Essay
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