Economic Globalization
Summary
In explanation about economic globalization, business corporation is main actor. It specifically called 'TNC'. We live in a world of global corporation. At the same time global corporation is significant in terms of political spectrum. Main issues are: (1) the scale and geographical distribution of TNC(the transnational corporation) in the global economy; (2) why and how corporations engage in transnational activities; (3) the geographical embeddedness of transnational corporations; (4) the 'webs of enterprise' manifested in transnational production networks; (5) the power relationships between TNCs and other actors in the global economy.
1) In 1914, UK and some European manufacturing companies were becoming increasingly transnationalized. The most well known definition of a modern TNC is 'a firm which has the power to coordinate and control operations in more than one country, even if it does not own them'. And some global corporation called 'placeless' giants. Because they owe no allegiance to any particular country or community and have operations span the globe. But these majority TNCs still retain more than half of their activities in their home country and one or two countries outside their home base.
2) The reason can be thought market-oriented investment and asset-oriented investment. In terms of market-oriented, to increase profitability, corporation expand its market beyond its home territory. But access to the market may be restricted because of political regulatory structures like import tariffs. And in terms of asset-oriented, the main reason is the geographical unevenness of markets. And second reason is the assets that firms need to produce and sell their products and service are not enough, so firm may need to exploited new country.
Also many of the early leading TNCs were effected in the natural resource sectors. This involves human resources. The so-called 'New International-Division of Labour' was base on the claims that firms in the Western industrialized countries were fleeing the constraints of high-cost, militant labour to tap cheap in developing countries.
3) Global corporations are bearers of such characteristics, which interact with the place-specific characteristics. It appears verity 'placeless' type. This is because under specific circumstances, each society have tended to develop distinctive ways of organizing their economies, ideology of capitialism.
4) TNCs like firms in general have dense network which is both organizationally and geographically. And TNCs are far more difficult to coordinate and control whose activities are confined to a single national space. TNCs tend to develop distinctive patterns for each function. For example, TNCs labour is expressed in a distinctive external division of labour. But most the corporate headquarters remain in the firm's home country. These network engaged in processes of restructuring, reorganization and rationalization. TNC networks are always in a continuous state of flux. Some part grow rapidly, others may be stagnating, others may be in decline. Such restructuring and rationalization inevitably causes tensions between TNCs and other 'stakeholders', notably governments and labour.
5) TNCs are dependent on other firms for many of their need. This relation appears state of flux. Pressures on suppliers to deliver 'just-in-time', pressures on them to reduce prices, pressures on them to take on more responsibility and risk have come to characterize a number of global industries.
The basis of TNC's power lies in their potential ability to take advantage of teographical differences in the availability and cost of resources and in state policies and to switch and re-switch operations between locations. International regulatory bodies like WTO have significant role about geography of transnational production networks. As Harvey notes, "we need to avoid the simplistic view that TNCs always prevail. TNC's may be powerful - but they do not posses absolute power."
Interesting
I interestingly read explanation about 'New International-Division of Labour'. TNC find cheap labour in developing countries and there are high cost labour in Western society. Also, 'flex' word often watched in explanation TNCs emergence and network structure. When I read 'flex', I thoght the word 'liquid modernity' used Zygmunt Bauman. Liquid modernity is represented postmodernity.
Zygmunt Bauman's Liquid modernity is written in wikipedia. "'postmodernity' by using the metaphors of "liquid" and "solid" modernity. In his books on modern consumerism Bauman still writes of the same uncertainties that he portrayed in his writings on "solid" modernity; but in these books he writes of these fears being more diffuse and harder to pin down. Indeed, they are, to use the title of one of his books, "liquid fears"—i.e., fears about pedophilia, for instance, which are amorphous and have no easily identifiable referent."
question
In text, there are two step about New International-Division of Labour. I think south korea society has tree step Labour network after emergence of TNC. In south korea society, foreigner from the Philipines, Indonesia offers cheap labour and most korean high educated hope high cost position in global corporation. But in terms of Western society, these position also is belong to low quality position. Nevertheless High educated korean tend to prefer TNC than logical corporation. Why they prefer global corporation and How think about my opinion about three steps about Labour network in korea?
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