strategy

Increasing activity of transnational corporations

Synonyms:
Expanding dominance of multinational firms
Escalating economic control by transnational corporations
Context:
The top 350 transnational corporations control 40% of world's merchandise trade and the largest 15 each have a gross income larger than the GDP of 120 countries.
Implementation:
The importance of transnational corporations as integrating agents and carriers of the world economy, as witnessed by their role in current flows of capital, finance, technology and labour, continues to grow. In the early 1990s there were an estimated 37,000 transnational corporation parent firms and 200,000 affiliates, compared to roughly 7,000 or so transnational corporations that had been based in the major home countries in 1970. The 100 largest companies by foreign assets had accounted for one third of the world-wide stock of foreign direct investment and controlled US$3.3 trillion ($1012) in global assets in 1991, of which an estimated $1.3 trillion represented assets outside the home countries. In the past few years, 73 million people were employed directly by transnational corporations and their foreign affiliates, and many more in activities linked to them through forward or backward linkages.

FDI flows, the principal measure of annual changes in the cross-border investment activities of TNCs, increased throughout the post-war period, experiencing unprecedented acceleration during the second half of the 1980s. Between 1985 and 1990, worldwide FDI outflows increased at a rate of 24% a year, almost twice as fast as that of the growth in exports and two and a half times as fast as that of the growth in world output.

Claim:
The structure of the multinational corporation is a modern concept designed to meet the requirements of a modern age; the nation state is a very old fashioned ideas and badly adapted to serve the needs of our present complex world.
Problems:
Oligopolies
Subjects:
Action
Business enterprises
Multinationals
Type Classification:
G: Very Specific strategies