Blog Assignment 4: What is the relation between economy and globalization? - YUERONG WANG

 Summary

The article focuses on five interconnected issues: (1) the scale and geographical distribution of multinational corporations (MNCs) in the global economy; (2) the reasons and modes of MNCs engaging in cross-border activities; (3) the geographical embeddedness of MNCs; (4) the "enterprise network" in multinational production networks; and (5) power relations between multinational corporations and other actors in the global economy.

Multinational corporations play a crucial role in the international economy, originating from the 15th century with charter trade companies such as the East India Company and the Hudson's Bay Company laying the foundation for global trade. In the latter half of the 19th century, manufacturing companies began internationalizing, and in the past 50 years, giants like General Motors, Shell, and IBM have become prominent players in the global economy. The motivations for corporate internationalization are mainly categorized as market-driven and asset-driven, encompassing factors such as market saturation, seeking new market opportunities, and overcoming trade barriers. Development models include greenfield investments and cooperation through methods like mergers and strategic alliances.

The relationship between MNCs and their home countries is complex, influenced by national institutions and cultural traditions. Research indicates that companies headquartered in different countries maintain uniqueness in core aspects, and national systems and cultural traditions play a dominant role in shaping and guiding corporate decisions. Despite the capitalist ideology, companies from different countries still exhibit distinct differences that are not easily eliminated, contrary to the convergence perspective in globalization theories. This underscores the complexity of the embeddedness of multinational corporations in specific national environments.

The organizational structure and production networks of MNCs highlight their complexity and dynamism. MNCs are seen as dense networks at the center of relationship networks, with internal networks varying significantly in organization and geography. The configuration of production networks is influenced by factors such as corporate history, culture, and industry environment. MNCs are dispersed in different political, cultural, and social environments, necessitating complex organizational structures and unique spatial patterns. Tensions exist in relationships with government, labor, and other stakeholders, while regulatory bodies constrain their actions within a multi-scalar regulatory system and national forces.

In conclusion, multinational corporations do not always hold an advantageous position, and their actions are constrained by various factors. The global development of companies is intricately connected to their local environments rather than trending towards uniformity in the global economy.

Interesting point

The article explores the complex relationship between multinational corporations (MNCs) and their home countries, emphasizing the influence of national institutions and cultural traditions on corporate behavior. This highlights that globalization is not a simple process leading to uniformity among businesses; instead, it is shaped by the intricacies of how companies are embedded in their local environments.

discussion

The article mentions the diversity of organizational structures and production networks of multinational corporations in various environments. In the trend of globalization, how do businesses adjust their organizational structures to adapt to different countries and cultural backgrounds, aiming to enhance collaborative efficiency and adaptability?