Multinational corporation
Multinational companies (MNCs, English: Multinational Enterprises, MNE ) are companies on direktinvestiver base operating across borders. Often the term as a synonym for the International Company ( INU ) is used, which, however, is broader since it covers not directly investive internationalization. The organizational form of the Multinational company has been around since the 19th century. Do not confuse the concept of MNU with the homonym from the classification of Bartlett and Ghoshal, who use the term in their classification, to name a four -characterized subtypes MNU.
- 5.1 Horizontal Integration
- 5.2 Vertical Integration
- 6.1 advantages
- 6.2 disadvantages
- 7.1 See also
- 7.2 Literature
- 7.3 External links
- 7.4 footnotes
Classification
After the skills of international companies divided the Harvard professors Sumantra Ghoshal and Christopher Bartlett this observable in three categories. Across industry boundaries they set it within the groups common skills ( "capabilities" ) that is reflected in the organizational structure. The main features are summarized in the following table:
Although many of the observed companies had reached a considerable size, all companies were also weaknesses and problems. Obviously, the adaptation to the environment was incomplete. From this observation out concluded Goshal and Bartlett, a fourth form of internationalization, in which the three core competencies of the multinational, global and international companies merge into one another as it were. They called this form of transnational companies because such companies would have no center and no homeland more, but would be at home anywhere in the world. Although in many industries trends can be observed to achieve such a state, so far, no other company is known, which could carry the attribute "transnational".
Term
General definition
As a multinational corporation is generally any legally independent company (parent company) called, which is headquartered in Germany and at least one foreign subsidiary and therefore has more than one production site.
Multinational companies are distinguished from companies that produce in one country and export from there. However, such companies may still be International companies. Multinational companies have contrast in several countries subsidiaries. Establishing such a direct investment. Therefore, there is a close relationship between foreign direct investment and multinational companies. From this perspective, it represents a further development of the national company or a special event of the International Company, with the development or feature in an international transfer of real capital there.
Alternative definitions
In the United States, a company is considered a multinational, if this is already 10 % of the shares of a foreign company are held.
History and development
Multinational companies are there already since the end of the 19th century (but sometimes under other names ), which is mainly due to industrialization and imperialism. The importance of multinational companies was rather low until the mid- twentieth century. They were initially in a few sectors such as the automotive industry ( eg General Motors, founded in 1908 ). The development of multinational companies was also negatively affected by the First and especially the Second World War.
However, the multinational companies have been significantly after the end of World War II as a result of the increasingly rising world trade. Especially by the then more and more increasing direct investment experienced the multinational companies, especially in the 80s a strong upswing.
Since that time, the importance of multinational companies has been increasing due to the increasing globalization continues strong. This is also evidenced by the following figures: In the beginning of the 90s there were about 7,000 multinational companies, now there are about 65,000 parent companies and 850,000 associated foreign subsidiaries in all countries of the world. Furthermore, about two -thirds of the flow of goods caused by multinational companies. Thus, today's dominant position Multinational company in the global economy becomes clear.
Types
The activity of multinational companies can be divided into four main types, which in practice usually several types occur simultaneously:
- Finding resources ( physical resources, labor factor human capital)
- Search by markets (due to market size and growth, activity of existing customers or suppliers in new markets, adapting products to local preferences, transaction and production costs, dynamic interaction with competitors, response to government intervention in the market )
- Search efficiency ( economies of scale and scope, risk diversification)
- Search of strategic assets
Other forms: Escape investment ( regulation ), investment support
Furthermore, a distinction between different types of multinational companies:
Classic Multinational companies have the seat of its headquarters in the country of origin, but also working in many countries. Examples include Apple and McDonalds. Although these companies achieve international success and sales, they still stand strong in relation to their national identity.
With regard to the production, procurement and sales policy, the local subsidiaries are largely independent.
Modern Multinational companies have come up with the growth of the global competition to so-called transnational companies (English Transnational Corporation TNC) developed. Currently, many multinational corporations make such transnational, cross -border business dar.
Transnational corporations have a penchant for global integration and identification. Your fundamental openness to different cultures is evidenced by the establishment of a corporate identity. This is based not only national, but on a global regulated corporate culture. This should on the one hand cultural intolerances are degraded to support pluralism. Another aspect is the development of a unified corporate culture to ensure the communication and information processing between the sites.
Ideally, the transnational corporation takes the form of a network organization, which can not be located geographically specific. Thus, these transnational corporations are rather to global companies whose services are increasingly assigned to a country. Customers should no longer identify the product with a location, but with the company itself. With this consequence, Daimler - Benz presented since 1994 no longer made in Germany in the foreground, but also marks its world with products made by Mercedes.
In contrast to classical multinationals corporate governance requires the semi-autonomous subsidiaries to strategic corporate objectives and subsidiaries assume functional tasks. The products as possible to the respective local requirements ( customer requirements, distribution channels, availability of resources, etc. ) can be adjusted to achieve benefits, but which are based on joint research and development of the company as a whole.
Theories of Multinational Companies
The emergence of multinational companies approach comprises two theories that are discussed briefly below. Detailed explanations can be found multinational companies in the articles site motif of multinational companies and Internalisierungsmotiv.
Horizontal Integration
This theory is concerned with the location motives of multinational companies. Why make MNU one and the same good in several countries from?
Here are some examples:
- Companies want to produce goods and services of the same type on all its active markets, but different markets require different customized goods
- The choice of production location will be based on resource occurrence
- The local production are cheaper than in the home country on the basis of trade barriers such as tariffs, etc.
- Reduction of transport costs: in sales-oriented companies to shorter transport distances arise from a production of the goods at the place of consumption; in procurement-oriented enterprises to reduce the number of raw material transportation or to be transported quantities of raw materials
Vertical Integration
This theory treats the Internalisierungsmotive multinational companies. Why produce one and the same company is a good in different locations?
Here are some examples:
- The implementation of international transactions is effective if it is done in-house rather than between multiple companies
- The transfer of technology is simplified
- Go produced goods and services as precursors in the production process of foreign firms a, entails the inside of a company less risks regarding coordination problems and price fluctuations as between different companies (for example, division of labor between parent and subsidiary)
The aim of vertical integration is to primarily use the comparative advantage of different international production sites and to gain efficiencies.
Assessment
Benefits
Among the advantages of multinational companies include improved technical efficiency and a faster technology transfer, especially in developing countries. This new production and thus jobs are created by the improved technologies. Thus, the developing countries have the opportunity to (conditionally ) conform to the prosperity of the great nations.
Furthermore, a multinational operating company has the opportunity to take advantage of its company-specific competitive advantages in international competition. Also positive effects have locational advantages abroad which companies can not easily use international activities. Recently, these companies have the ability to trade internationally directly about their organization and do not have to use it to market.
Disadvantages
Particularly negative falls on multinational companies that their presence the host countries usually do not like. They feel threatened by them and have the impression that multinationals exploit workers because of their low pay and destroying nature. Often, therefore, the locals refuse ( a phenomenon that is particularly noticeable in Japan) to work for these companies.
In addition, multinational companies are often exposed to the risk that occur economic crises or political unrest in some countries. Furthermore, it is often very expensive to develop new markets in foreign countries. And there is always the risk that a market that appeared at the beginning of a good choice, it turns out in retrospect to be a bad choice.