Understanding Corporations in Economic Globalization GUANRUI

In our everyday conversations, globalization is often described as a world controlled by huge companies that do business everywhere. Peter Dicken’s reading shows that this idea is not completely wrong, but it is definitely not the full story. Corporations are very important in economic globalization, but they are not all-powerful and they do not fully escape the influence of their home countries. In this blog, I will summarize the key ideas from the reading, explain what I found interesting, and raise one question for further discussion.

To start with, Dicken explains what transnational corporations (TNCs) are. These are companies that manage production or services in more than one country. They have become extremely important in the global economy. According to UNCTAD’s data in the reading, thousands of TNCs together make up about one-tenth of the world’s total economic output and one-third of world exports. However, the really surprising point is that the top 100 companies control a huge percentage of all these activities. This means economic globalization is not created equally by all companies, but mainly by a small group of very powerful ones.

But even these large companies are not as “global” as people sometimes think. Dicken shows that most TNCs still keep more than half of their operations in their home country. Their headquarters usually remain in the country where they started. Their history, company culture, and ways of working still come from their original national background. In other words, globalization does not completely erase where companies come from.

The reading also explains why companies expand into other countries. There are two main reasons: one is to find new markets and new customers; the other is to gain access to resources such as natural materials or labor. In early years, many companies went abroad mainly to get natural resources. Today, companies move production to places with cheaper labor or to places with workers who have special skills. This is why parts of global production have shifted to East Asia or Eastern Europe. Globalization has made it possible for companies to divide different tasks across different countries.

Besides the reasons behind expansion, Dicken also talks about how companies expand. Some create new factories in foreign countries, while others buy local businesses or work together through alliances. One important idea is that these companies do not work alone. They operate inside networks of suppliers, local governments, local companies, and customers. Globalization builds a web of relationships instead of a simple “company goes abroad” model.

One idea I found very interesting is that globalization does not eliminate geography. Instead, it changes how geography matters. Even when companies reach many countries, they still carry their original identity. For example, American, Japanese, and German companies still behave differently based on their national culture. So globalization creates more international connections, but it does not make everything the same. There are still many versions of capitalism.

Another important topic is the relationship between corporations and governments. People sometimes think that big corporations are stronger than countries. But Dicken argues that this is not always true. Governments still have power because companies must follow national laws if they want to do business in that country. For example, the Chinese government has strict rules on foreign companies entering certain industries, and companies must cooperate if they want access to China’s market. So power between states and companies is balanced and depends on the situation.

From this reading, what surprised me most is that globalization actually increases connections between places instead of making borders disappear. Global supply chains link many different countries together. Also, the fact that major corporations still rely heavily on their home country shows that globalization is less “flat” than we imagine. It does not remove differences—it connects them.

However, this reading also made me wonder about one problem: If strong corporations negotiate with weaker or poorer countries, who really has the upper hand? Even though governments have authority in theory, in reality they may depend on foreign investment to create jobs and keep their economy stable. This might give corporations too much influence. Also, as these companies bring global brands, global working styles, and global consumer behavior into new places, do local cultures and local industries slowly disappear? Will diversity still survive under global economic pressure?

To conclude, Dicken’s reading helped me understand that globalization is not just companies taking over the world. It is a complex process full of cooperation, negotiation, and sometimes conflict. Corporations do play a major role, but they are not free from the influence of geography, history, and politics. Economic globalization is shaped by many actors and environments, and its results are uneven and sometimes unpredictable.