Transnational Corporations (Tncs)

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1.3. Transnational corporations (TNCs) Transnational corporations (TNCs) are one of the most important actors in the global economy, occupying a more powerful position than ever before. Transnational companies are much more complex organizations. A transnational, or multinational, corporation has its headquarters in one country and operates wholly or partially owned subsidiaries in one or more other countries. The subsidiaries report to the central headquarters. Both multinational and transnational are more or less similar in meaning, and some scholars use these two terms interchangeably. Transnational corporations also operate in many countries, and there isn’t a centralized management system. These companies might start in one country,…show more content…
Many states mean that these types of companies operate in more than one country at the same time. Multinational enterprise is strongly supported by the emergence of free liberalism and free market concepts. A company may start in one country, and may spread to other foreign countries, expanding their investments. Thus, a national industry becomes a multinational company. The significance of this type of companies is that though it spreads to many other countries, there will be a centralized management system, and the main decisions will always be taken by the home company. The other foreign corporations will be subsidiaries of the home company. When we think of the business environment of a multinational company, it may engage in exporting and importing goods and services, buying and selling license in foreign markets, contract manufacturing,…show more content…
One is preventing competition. The most certain method of preventing actual or potential competition from foreign businesses is to acquire those businesses. Another motive for establishing subsidiaries in other nations is to reduce costs, mainly through the use of cheap foreign labor in developing countries. A transnational corporation can hold down costs by shifting some or all of its production facilities abroad. Transnational corporations with headquarters in the United States have played an increasingly dominant role in the world economy. This dominance is most pronounced in the developing countries that rely primarily on a narrow range of exports, usually primary goods. A transnational corporation has the ability to disrupt traditional economies, impose monopolistic practices, and assert a political and economic agenda on a country. TNCs operate in all sectors Primary- e.g. oil and gas (Shell,

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